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The following is the question raised by Hon Chan Kam-lam and the reply given by the Secretary for Planning, Environment and Lands, Mr Gordon Siu, in the Legislative Council today (Wednesday):

Question:

At the end of last year, the Court of Final Appeal ruled, in respect of a case of conveyancing dispute, that the purchaser had the right to rescind the agreement as the vendor had failed to produce the Certificate of Compliance issued by the relevant authorities upon the request of the purchaser. In this connection, will the Government inform this Council of:

(a) the criteria for issuing a Certificate of Compliance;

(b) the respective numbers of residential buildings and estates which are already completed and occupied but have not been issued with Certificates of Compliance by the relevant authorities; the names of these buildings and estates; and

(c) the actions to be taken by the relevant authorities against the buildings and estates which are completed and occupied but have not yet been able to meet the requirements for the issuance of the Certificate of Compliance?

Madam President :

(a) A Certificate of Compliance (CC) is issued if the Government is satisfied that all the positive obligations imposed in Conditions of Grant for a lot have been complied with. The usual positive obligations include the following -

(i) completion of the development itself and an occupation permit has been issued for the development; and

(ii) completion of the works as required by Conditions of Grant, such as formation of pavements or landscaping or construction of facilities like clubhouses for the benefit of residents;

(b) the Conveyancing and Property Ordinance (Cap 219) specifies that developments for which Conditions of Grant were issued before January 1, 1970 shall be deemed to have complied with the Conditions and no issuance of CC is required. For the period between January 1, 1970 and March 31, 1982 (before the setting up of the Lands Department on April 1, 1982), based on the records readily available to the Lands Department, five private residential developments have been completed and occupied but have not been issued CCs. Since April 1, 1982, the Lands Department's records show that 28 private residential developments have been completed and occupied but have not been issued CCs. A list of the names of these private residential developments is at Annex; and

(c) the Lands Department monitors the compliance of outstanding obligations under Conditions of Grant which are yet to be fulfilled by the developers before they are in a position to apply for the issuance of CCs.

In some cases, developers are required to give an undertaking and a bank bond to ensure compliance with Conditions of Grant. The Lands Department will, in the event of a breach of the undertaking, take action against the developer under the undertaking. Where a bank bond has been given, the Lands Department will call upon the bank to honour the bond to meet the cost of fulfilling any outstanding obligation under the undertaking.

For cases without an undertaking or a bank bond, the Lands Department will look into each case with a view to deciding on what can be done to facilitate the issuance of CCs. If it is an outstanding obligation which prevents the issuance of a CC, the Lands Department may decide to issue legal proceedings by way of specific performance. Also, where the outstanding obligation under the Conditions relates to the provision of say pavements on Government land outside the lot, the Lands Department may claim damages from the developer, such damages being the cost of completing the works (e.g. the pavement) not completed by the developer.

The absence of CCs will not prevent the sale and purchase of residential units. This is because the Director of Lands can, upon application by a developer, give consent to assignment before the issue of a CC. Buyers and sellers of units then take a conveyance of title on the basis of an equitable interest. This said, I have asked for a review of the existing arrangements for the issue of CCs to examine how they can be improved to ensure that flats owners can obtain the legal estate of their flats.

End/Wednesday, April 21, 1999

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