2014-01-28
Re: DB Crime Rates

Dear DB residents,

Re: Review of the Building Management Ordinance (Cap.344)

The Hong Kong Government recognizes that ownership of private properties comes with both rights and responsibilities. The Home Affairs Department is presently conducting a consultation on the next revision to the Building Management Ordinance (BMO), with a view to improving the application of the Ordinance and enhancing the protection provided to residential owners. I can’t emphasize more the importance of this revised legislation to DB residents and owners. To find out details of the consultation, please go to the following website:

http://www.buildingmgt.gov.hk/en/whats_new/2_12.htm

The deadline for submission of your comments and views is 2 February 2015.

The following are some important areas that the consultation paper highlights and my observations, specifically applied to Discovery Bay:

1.      Formation of Owners’ Corporation (OC):

The BMO aims to help owners to form OCs, enabling owners to manage their buildings according to the provisions of the Ordinance. However, it is difficult, if not impossible, for DB owners to form an OC. Our Principal Deed of Mutual Covenant (PDMC), which was signed in 1982, contains unfair terms that allocate more than 70% of the undivided shares in the Lot to Hong Kong Resort Co Ltd (HKR) and its subsidiaries, even though they pay less than 10% of the total management fees. As such, HKR can block any effort to form an OC.

My recommendation is to limit voting rights for formation of an OC to those undivided shares that are liable to pay management fees.

2.      Termination of the Appointment of Deed of Mutual Covenant (DMC) Manager

Due to the disproportionate allocation of undivided shares as mentioned above, it is also very difficult for the residential owners to introduce competition to the appointment of the building manager, both in quality and price.

In this respect, I agree with the proposal in the Consultation Paper to limit the term of appointment of a DMC Manager to 5 years.

The Consultation Paper also asks whether the term limit should be applied to all developments, or to new developments only. I recommend that Discovery Bay residents support the term limit and the application of this limit to all existing developments in Hong Kong.

The proposal will ensure that owners are able to appoint a building manager that is independent of the developer through competitive tender, and that the appointment of the manager is in compliance with the new Competition Ordinance.

3.      Disputes Relating to Large-scale Maintenance Projects

According to our PDMC, a building survey must be conducted every 7 years, and a record of the survey kept at the building manager’s office for inspection by any owner or tenant. In order to maintain the safety of the buildings and our property values, regular maintenance work is recommended. However, there have been disputes over the amount and quality of renovation projects in various villages in the past.

I agree with the proposal in the Consultation Paper that the quorum for a meeting to approve any renovation project be maintained at 20% of the total number of owners affected. However, I disagree with Government’s suggestion that the required percentage of votes for passage of a resolution be raised from 50% to 75%, as the 75% threshold is very high and is not easily achievable.

4.      Counterfeit Proxy Instruments and Improper Practices

To minimize improper or abusive use of proxies at owners’ meetings, I concur with the Government’s recommendations to improve the practices governing notice of meetings, proxy collection and custody, and transparency in proxy verification.

A transparent process will ensure that proxies are vetted to prevent forgery of proxy documents. It is very important that owners DO NOT sign any blank proxies. Proxies should only be given to those who can faithfully represent owners’ rights and interests.

5.      Application of the BMO Provisions in Sub-DMCs

The BMO includes two schedules that are of particular relevance to finances and elections, Schedules 7 and 8. Since 1993, these have been incorporated into all DMCs in Hong Kong. The Government took the unusual decision to make application of these schedules retrospective in order to guard against misappropriation of owners’ funds by management companies, clarify the procedures for elections and specify the conduct of owners’ meetings.

Unfortunately, the Government has decided that Schedules 7 and 8 of the BMO apply to a DMC only, and not to sub-DMCs. As all residential areas in DB are governed by sub-DMCs, DB owners do not enjoy the protection of Schedules 7 and 8.

However, from 2000, Government itself recognized that the two schedules should apply to DB residential properties. All sub-DMCs executed since 2000 explicitly incorporate the schedules.

Significantly, if Schedule 8 is incorporated into all sub-DMCs, individual owners will enjoy the same rights to appoint a proxy as corporate owners. They or their family member will no longer be required to attend village meetings in person.

I recommend that the Government add a clause to the BMO stating that, if Schedules 7 and 8 have been incorporated into any sub-DMC in a Building (as defined in the BMO), they shall be incorporated into all sub-DMCs in that Building.

If you have any views and opinions, please make your submission to the Home Affairs Department on or before 2 February 2015:

Division V, Home Affairs Department

31/F Southorn Centre

130 Hennessy Road

Wan Chai, Hong Kong

Fax:  2575-1009

Email: bm_consultation@had.gov.hk

Or alternatively, you can send them to me via:

Email: awsyung@netvigator.com;

Fax:     2541-5660;

Post:   21/F, Fortune House, 61 Connaught Road Central, Hong Kong; or

Mailbox:  At the southern exit of DB Pier.

I will then forward them to the Home Affairs Department.

Last but not least, please visit dbConfidential.com which contains a lot of information about DB’s legal framework, including the PDMC, Sub-DMCs, Master Plans and recent audited accounts.

Yours sincerely,

Amy Yung

Islands District Council Member (Discovery Bay)