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Following is a question by the Hon Mrs Regina Ip and a written reply by the Secretary for the Civil Service, Mr Paul Tang, in the Legislative Council today (January 23):
Question:
In the 1950s, the Government launched a civil servant housing scheme to enable civil servants to set up civil servants' co-operative building societies (co-operative societies) under the Co-operative Societies Ordinance (Cap. 33) and apply for land grants and low-interest loans from the Government for building homes for civil servants (civil servants' quarters). As the titles to such quarters belong to the co-operative societies concerned, owners of individual flats who wish to sell their flats have to first obtain consent of 75% of the members to dissolve the co-operative society concerned to enable each individual flat to have its own sub-deed, and then apply to the Lands Department for revocation of the restriction on the transfer of title (transfer restriction) and pay for the premium concerned before they may sell their flats freely. On the other hand, as quite a number of owners of civil servants' quarters are old and their children are living separately, they prefer to move to accommodation that better suits their needs and requires less housekeeping efforts, and therefore, they wish to sell their flats or apply for reverse mortgage, but they are unable to do so due to failure in obtaining consent of 75% of the members of the co-operative societies concerned to dissolve the societies. Moreover, it takes quite a long time to complete the procedures for drawing up sub-deeds and applying for revocation of transfer restriction. In this connection, will the Government inform this Council:
(a) of the number and respective names of the existing civil servants' quarters and the total number of flats therein; the number of co-operative societies dissolved so far, together with a breakdown by year of dissolution of such societies;
(b) given the shortage of land supply in the urban areas in Hong Kong and the need to put resources to optimal use, whether the authorities will consider amending the outdated legal provisions relating to civil servants' quarters, so as to enable owners of civil servants' quarters to sell their flats more easily, in order to release the relevant land lots for other uses; and
(c) given that some owners of civil servants' quarters have indicated that the existing procedures for drawing up sub-deeds and applying for revocation of transfer restriction are complicated and time-consuming, whether the authorities will review the existing policy to assist the owners of civil servants¡¦ quarters who wish to draw up sub-deeds to expedite the completion of the procedures for revocation of transfer restriction, in order to enable them to find a more suitable home early?
Reply:
President,
(a) A total of 238 Civil Servants' Co-operative Building Societies (CBSs) have been formed in Hong Kong. Of these, 177 have been dissolved. The names of the dissolved CBSs and the number of flats involved in each CBS are listed in Appendix I according to their year of dissolution. Corresponding information on the remaining 61 CBSs not yet dissolved is at Appendix II.
(b) and (c) In response to requests from CBS members, the Government introduced in 1987 a mechanism (Note 1) which allows the dissolution of CBSs and the transfer of legal titles of CBS premises to individual CBS members. At present, a CBS may, after obtaining the consent of not less than 75% of its members, apply for dissolution in accordance with established procedures (Note 2).
Upon acquisition of the legal titles of CBS premises by former members of a dissolved CBS, a legal charge in favour of the Financial Secretary Incorporated (FSI) will be executed, with the title deeds of the flats kept by the Government and the flats subject to alienation restrictions, meaning that the owners are not permitted to assign, mortgage, let, part with possession of, or otherwise dispose of their flats, or enter into any agreement for such purposes. To remove the alienation restrictions, former CBS members may apply to the Lands Department (LandsD). Upon their payment of a land premium as determined by the LandsD in accordance with the terms of the land lease, the Government may allow the removal of the alienation restrictions and the release of the legal charge. The title deeds will be returned to the flat owners, who may then dispose of their flats as they wish.
In order that CBSs can complete the dissolution process as early as possible, and the former CBS members can acquire the sub-deeds and have the alienation restrictions of their flats removed, concerned bureaux/departments (B/Ds) have kept the relevant procedures under regular review and have implemented the following revised/streamlined arrangements:
(i) under the mechanism introduced in 1987, consent of all members was required for a dissolution application. In view of the considerable difficulties involved in obtaining such consent, the Government, after consulting members of all CBSs, put in place the existing mechanism (Note 3) in 1993, under which a CBS, upon obtaining the consent of 75% of its members, may apply for dissolution in accordance with established procedures;
(ii) from 2001 onwards, individual former CBS members may apply to the Civil Service Bureau (CSB) for a short-term waiver of alienation restrictions for their flats, which will allow them to enter into a sale and purchase agreement with a purchaser before their payment of land premium; and
(iii) since 2012, the CSB has streamlined the steps for verifying the eligibility of members and the concerned underleases under the existing procedures for dissolution cases. Under the streamlined steps, the CBS concerned is only required to confirm the number of categories of underleases, and the CSB will only examine one underlease from each category, thus shortening the processing time for the verification process.
The Government has no plan at present to revise the requirement of 75% of CBS members' consent for a dissolution application, having regard to the fact that members of all CBSs were fully consulted before the introduction of the existing mechanism, which has served to protect and balance the interests of all stakeholders (including members supporting the dissolution as well as those opposing it). That said, all concerned B/Ds will keep the relevant procedures under review from time to time. As far as statutory requirements are met, the aim is to facilitate the early completion of the formalities by the members who wish to have their CBS dissolved and sell their flats.
Note 1: The Government introduced in 1987 a Surrender and Regrant Approach (SRA) for the dissolution of CBSs and transfer of titles of flats from CBSs to individual members.
Note 2: The established procedures include (i) dissolving the CBS; (ii) completing the modification of Crown lease and vetting the relevant deed of mutual covenant (DMC); (iii) liquidator of the CBS entering into DMC and assigning the flats to former members by executing relevant deeds in respect of the flats; (iv) individual former members executing legal charge in favour of Financial Secretary Incorporated; and (v) consenting former members forming an owners¡¦ corporation.
Note 3: The Surrender and Regrant Approach (SRA) was replaced by the Modification of Lease Approach (MLA) in 1993.
Ends/Wednesday, January 23, 2013
Issued at HKT 16:29
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