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  Public consultation on review of Building Management Ordinance launched (with photos)

The Home Affairs Department (HAD) today (November 11) launched a public consultation exercise on the "Review of the Building Management Ordinance". The consultation period will last for 12 weeks until February 2, 2015.

The Building Management Ordinance (BMO) provides a legal framework for owners to organise themselves to discharge their building management responsibilities. To cope with the changing needs and circumstances of building management, the Government has established the Review Committee on Building Management Ordinance (the Review Committee) to conduct a comprehensive review of the BMO.

At today's press conference, the Permanent Secretary for Home Affairs, Mrs Betty Fung, said that taking into account the recommendations of the Review Committee, a consultation document setting out the legislative and administrative proposals which may help address the main building management concerns raised by the public in recent years was issued to kick-start the consultation exercise. The main concerns include disputes arising from large-scale maintenance projects, use of proxies at owners' corporation (OC) meetings, appointment and remuneration of deed of mutual covenant (DMC) managers, etc.

"With more aged buildings in Hong Kong that need to undergo major maintenance or renovation, there is an increasing number of disputes among owners relating to large-scale maintenance projects. To ensure that there has been thorough discussion and wide participation by owners before a decision on such projects is made, the consultation document invites members of the public to offer views on two possible options, namely, raising the quorum of the OC meeting from 10% to, say 20%, of the total number of owners, or raising the required percentage of shares of votes for the passage of the resolution from 50% to, say 75%, of the shares of votes at the meeting," Mrs Fung said.

For owners who are unable to attend OC meetings to cast their votes in person, the BMO allows them to appoint proxies. There are allegations about improper practices adopted by chairmen and secretaries of the management committees (MC) or the convenors of owners' meetings in the collection and verification of proxy instruments and the use of counterfeit proxy instruments. To address such concerns, the consultation document proposes a package of legislative and administrative measures to improve the arrangements.

The proposed measures include, for example, stating clearly in the notice of meeting as to the exact location of the proxy collection boxes and the timing for opening the boxes and counting the proxies, accepting only the original copy of the proxy instruments, and displaying the list of flats with proxy instruments lodged in a prominent place of the building at least 24 hours before the meeting.

Under the existing BMO, a resolution to appoint an MC and to form an OC shall be passed by a majority of votes at the meeting, and be supported by the owners of not less than 30% of shares in aggregate. Very often large housing estates where a large number of owners are involved or where the developer holds a large share of ownership have difficulty in gathering a sufficient percentage of shares in aggregate to form an OC. As such, the consultation document seeks public views on the suggestion of lowering the threshold for OC formation from 30% to 20% of shares in aggregate.

On the appointment of DMC managers, the consultation document seeks public views on the options of lowering the threshold for terminating the appointment of DMC managers from 50% to 30% of shares in aggregate, or limiting the term of appointment of DMC managers, say to five years.

On the remuneration of DMC managers, the consultation document invites public views on possible ways to reduce the remuneration rate of DMC managers of large-scale developments and to improve the transparency of calculating remuneration. These include, for example, reducing the ceiling on the remuneration rate of DMC managers by a specified percentage each year, or setting lower ceilings on the remuneration rates of DMC managers of large-scale developments.

"In addition to the review of the BMO, HAD has introduced a number of new measures in recent years to provide targeted assistance to owners, including the 'AP Easy' Building Maintenance Advisory Service Scheme, the Building Management Professional Advisory Service Scheme and the Panel of Advisors on Building Management Disputes. "We understand that many of the proposals put forward in this consultation document have significant implications on the management of private properties, their owners and the relevant industries. Members of the public, in particular property owners, are encouraged to offer comments and suggestions on the above and other issues during the public consultation period," Mrs Fung said.

The consultation document is available at the Public Enquiry Service Centres of District Offices, or at the HAD's Building Management Website (www.buildingmgt.gov.hk). Comments can be sent in writing to the HAD on or before February 2, 2015, by email (bm_consultation@had.gov.hk), mail (Division V, Home Affairs Department, 31/F, Southorn Centre, 130 Hennessy Road, Wan Chai) or facsimile (2575 1009).

Ends/Tuesday, November 11, 2014
Issued at HKT 19:26

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