Motion on “Property Management Services Bill” (2016.05.26)

MR CHAN KIN-POR (in Cantonese): Deputy President, first of all, I have to declare my interest as the chairperson of an owners’ committee of a large housing estate on Hong Kong Island with over 2 700 residential units.

I support the Property Management Services Bill (the Bill) proposed by the Government and am glad that the Government has accepted my suggestion by introducing an amendment to stipulate that owners’ organizations or owners cannot self-manage a property with 1 500 residential units or more. I also support other amendments put forward by the Government, especially the one stipulating that if an owners’ organization decides to self-manage their property instead of engaging a property management company (PMC), such a decision must be supported by the passage of a resolution at a general meeting of the owners’ organization.

In recent years, numerous problems and disputes over property management have arisen, causing considerable controversies in society and a lot of troubles to property owners. The major cause of this social malaise lies in the enormous resources involved in property management, coupled with the fact that some of the existing laws are either outdated or too lax. As a result, people with nefarious intentions are drawn to this much coveted “piece of fat pork” and try to get a share of it. In response to the uproar in society, the Government is determined to plug the legislative loopholes. It has reviewed the Building Management Ordinance earlier and is about to introduce tighter regulation on owners’ corporations (OCs) and the awarding of renovation and maintenance contracts. The Bill proposed at present formally places PMCs and property management practitioners (PMPs) under regulatory control.

In fact, the performance of a PMC has a significant impact on the management of a building and the quality of the living environment. Also at stake is the safety of the building. So we cannot afford to treat it lightly. I would not have become so familiar with the problems of building management if I had not been involved in estate management work for many years. With so many loopholes in our property management system, it is no exaggeration to say that it is in tatters. I also know very well that a good PMC is crucial to the management of a building. If a company fails to carry out its duties properly, no matter whether they are about incomes and expenditures, cleaning and maintenance, security, or services of its management team, the daily lives of the owners or residents will be greatly affected, and the appreciation potential of the property will be affected too.

Without formal regulation, the quality of PMCs on market now varies greatly. Many of them lack sufficient experience and expertise, which inevitably leads to chaotic management. Some of them even lock horns with owners over the management of finances. The enactment of the Bill will promote greater transparency in the property management industry. The licensing regime to be introduced will increase the quality of services of PMCs and PMPs by putting them under effective regulation. In the future, disputes between PMCs and property owners can be referred to the new regulatory body for investigation. Small owners will no longer lament the lack of a proper channel for them to air their grievances.

However, the Bill has a big loophole, which is the exemption of OCs and other forms of owners’ organizations that choose to self-manage their properties from regulation of the licensing regime. That means owners’ organizations can self-manage their buildings without having to obtain licences. The Government argues that there are about 40 000 private buildings in Hong Kong, out of which, around 8 500 are managed by OCs or other forms of owners’ organizations. Among these buildings, close to 70% are single-block buildings. During the public consultation exercise, many respondents advised against subjecting these self-managed properties to regulation so as to prevent unfairness to these properties.

Such an arrangement seems reasonable but it actually bears a big loophole. First of all, I do not oppose to the idea that single-block buildings or buildings with fewer household units can be self-managed and are granted exemption from the new regulatory framework. But I worry that such exemption will create loopholes for circumventing statutory regulation. If large housing estates are also entitled to such exemption, they will be given an opportunity to sidestep regulation. In that case, the regulatory body may be rendered useless and cannot solve the above-mentioned problems.

The solution is in fact very simple. I have repeatedly put forward at the Bills Committee meetings my suggestion. I suggest to set a maximum number of property units that can be managed by an exempted owners’ organization. Moreover, a Member has proposed that the decision of self-management of property should be supported by the passage of a resolution at a general meeting of the owners’ organization. These suggestions were turned down by the Government at first. But many Members have fought for their inclusion in the Bill. I have made it clear that if the Government did not include them in the Bill, I would propose my own amendments. Finally, the Government was convinced and put forward relevant amendments. So I support the Bill and hope that it will be enacted and take effect as soon as possible.

I so submit.

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