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Following is a question by the Hon Michael Tien and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (February 27):
Question:
Blocks K and L of Tin Chung Court (the two blocks), a Home Ownership Scheme estate built and completed in 1999 by the Hong Kong Housing Authority (HA), had subsequently been found to have piling problems and restoration works for which have now been completed. HA will put up the remaining flats (including those of the two blocks) of Tin Chung Court for sale in the near future. Yet, some members of the public are sceptical about the quality of the two blocks, and the owners' corporation of the estate is still in dispute with HA over who should be responsible for paying the management fees of the two blocks between the years 1999 and 2008. In this connection, will the Government inform this Council:
(a) as some owners from the estate claim that the developer as stipulated in the Deed of Mutual Covenant shall bear the management fees of the unoccupied flats in the estate, but the Secretary for Transport and Housing (STH) stated on August 30 last year that HA had sufficient justifications for not accepting the claims of the owners' corporation, of STH's justifications;
(b) as it is learnt that HA provides a 20-year structural safety guarantee for the two blocks and has indicated in a reply to the enquiries of owners of the estate that HA will not extend the guarantee period, of the justifications for that; whether HA can make public the survey data of the two blocks to prove that the blocks after restoration works have met the safety requirements concerned; if it cannot, of the reasons; and
(c) given that STH has said that, "[we] shall add a clause in the Agreement for Sale and Purchase stating that if any claim, demand or legal action has been made by anyone against the buyer in connection with the current dispute over management fees, HA is entitled to handle in the name of the buyer......HA will bear the legal responsibilities and consequences concerned", of the way in which HA will shoulder the legal responsibilities; whether it will consider providing financial assistance and free legal advice to new owners, as well as reimbursing the costs incurred by those new owners who need to hire their own lawyers?
Reply:
President,
To address the home ownership aspiration of the community, the Subsidized Housing Committee (SHC) of the Hong Kong Housing Authority (HA) endorsed the sale of the remaining 832 surplus Home Ownership Scheme (HOS) flats at its meeting on September 12, 2012. At its meeting on February 7, 2013, the SHC also endorsed the detailed sale arrangements including the average selling prices, quota for allocation between Green Form (GF) and White Form (WF) applicants and the income and asset limits for WF applicants. It is anticipated that the application period will commence in end-March 2013. Among the 832 surplus HOS flats to be sold, most of them are in Tin Chung Court, Tin Shui Wai, including all of the flats in Block K and Block L.
My reply to the Hon Michael Tien's three-part question is as follows -
(a) There are 15 residential blocks in Tin Chung Court. The Deed of Mutual Covenant (DMC) of Tin Chung Court took effect on December 28, 1999 when the first batch of nine blocks was completed. The Completion Certificate for four other blocks (Blocks F, G, H and J) was issued on April 23, 2001. Due to foundation problem found prior to the completion of Blocks K and L, foundation remedial works and internal reinstatement works were carried out. The Completion Certificate of these two blocks was subsequently issued on November 24, 2008. The HA started to pay the management fees for the flats in the respective blocks since the issue date of their respective Completion Certificates.
The Owners' Committee of Tin Chung Court (OC) considers that the HA should start paying the management fees of the above six blocks from the effective date of the DMC (i.e. December 28, 1999) even though they were not completed at the time, and asks the HA for payment of about $71 million, being the total of the alleged management fees in arrears, the accrued compound interests and collection charge.
In fact, prior to the completion of construction, Blocks F, G, H, J, K and L were still development sites. Outgoings arising from cleaning, security, maintenance and management were solely borne by the HA. The Court's common resources and facilities, including cleaning, security, maintenance and management, etc were shared only after the completion of the respective blocks. The HA therefore considers that payment of the management fees of the respective blocks starting on the date of issue of the Completion Certificates is fair and reasonable, and does not agree with the payment of some $70 million claimed by the OC.
(b) In general, all flats for sale by the HA are provided with a 10-year Structural Safety Guarantee from certified date of completion. However, exceptionally, in respect of Tin Shui Wai area, the HA provides a special 20-year Structural Safety Guarantee for all those flats sold in that area, in order to strengthen confidence of potential buyers. After completion of foundation remedial works, Blocks K and L are as structurally safe as any other ordinary buildings. The HA will not further extend the special 20-year Structural Safety Guarantee period for these two blocks. However, the period of the 20-year Structural Safety Guarantee will be counted from the commencement date of "Flat Selection Period" of the first sale phase of these two blocks.
Settlement survey data are technical in nature and require proper interpretation by trained engineering professionals. Interested owners can view the data with engineering professionals at the office of the Housing Department, in the presence of Housing Department staff, who will be in a position to elaborate on the data and to answer any questions which might be raised.
(c) Pursuant to the indemnity clause provided by the HA under the Agreement for Sale and Purchase, in the event of any claim or proceedings arising in relation to the Tin Chung Court management fee disputes, the HA shall be entitled to take over and conduct the defence or settlement of the claim in the name of the purchasers and handle all matters and proceedings thereof. Under these circumstances, the purchasers do not need to instruct their own solicitors to handle such claims. The HA will assume responsibility for any sum of money the court may order the purchasers to pay or agreed to be paid by HA in settlement of the claim, and will not pass on any responsibility arising from such action to the purchasers.
Ends/Wednesday, February 27, 2013
Issued at HKT 13:49
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