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The Housing Department will not spare any efforts in assisting displaced tenants affected by the scheduled clearance of Tai Wo Hau Factory Estate in October this year to re-establish their business, the Deputy Director of Housing (Estate Management), Mr Lau Kai-hung, said today (April 19).
"We fully understand the difficulties facing tenants, especially those operating unpopular trade or trades requiring high ceiling height to accommodate heavy plants and machineries, in relocating to factory units in newer Housing Authority (HA) factories or in the private sector," Mr Lau said.
"We will try to do as much as we can to assist them," he said after a meeting with tenants' representatives and Legislative Councillor, Mr. Lee Wing-tat.
Another restricted tender exercise will be conducted next month for vacancies in HA factory estates where 1 050 square metres are currently available. Record of the Rating and Valuation Department also shows that there is around 1.3 million square metres factory space vacant in the private sector.
Mr Lau stressed that the levels of ex-gratia allowances (EGAs) at $2,717 to $5,070 per square metre amounting to $56,000 to $1.7 million payable to the affected tenants, representing seven to ten years'rent for tenants paying scheduled rent with assignment rights and 15 months¡¦rent exclusive of rates for tenants with no such rights, were sufficient for the displaced tenants to re-establish business should they so wish.
"The EGAs granted was intended to reflect the benefits attached to the tenancies, which vary depending upon the date the tenancy was acquired and the means of acquisition," he added.
Mr Lau explained that both the tenancy agreement and the Housing Ordinance entitled the HA to terminate factory tenancies on giving due notice of three months or less.
"Whilst tenants might rely on assurances made by the former Resettlement Department on security of tenure, our legal advice is that notwithstanding arrangements for assignment having been acceded to by the HA, any rights held by tenants do not survive upon the termination of the tenancy" he said.
"Although displaced tenants are not legally or contractually entitled to any form of compensation, as a responsible and reasonable landlord the HA offered EGAs to assist their relocation," he added.
The EGAs have taken into account the dual elements of disturbance including removal cost, rental during fitting-out of new premises and fitting-out costs; and an amount to buy-out the tenant's assignment right.
It is the HA's established practice to give an 18-month notice to vacate and to suspend rent increases from the date of announcement. An advance payment of 70 per cent of the proposed EGAs will be paid on approval, with the balance to be paid upon clearance of rent arrears and delivery of vacant possession.
A three-month rent-free period or a cash sum of $4,700 in lieu will also be offered to tenants leasing HA factory units elsewhere, otherwise they can choose to obtain a cash sum of $4,700 per unit.
Built in 1961¡V1966, Tai Wo Hau Factory Estate comprises one four-storey block, one five-storey block and one seven-storey block without lift service with 1035.5 units in standard sizes of 18 square metres or 24 square metres.
There are now 158 remaining tenancies occupying 387.5 units, out of which about 50 per cent are in active use. Under an Early Surrender Scheme, 214 tenants holding 526 units had actually surrendered their premises.
"The EGAs granted under the Early Surrender Scheme were equivalent to 75 per cent of the EGA for clearance calculated in November 2000 when the scheme was first introduced," Mr Lau said.
Ends/Wednesday, April 19, 2006
Issued at HKT 19:17
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