Development Control of Development Control of Development Control of Development Control of Buildings in Hong KongBuildings in Hong KongBuildings in Hong KongBuildings in Hong Kong

ecyY 2012 - 2013

BRE 336PolyTechnic University of

Hong Kong

Ch. Ch. Ch. Ch. 3333 Land Lease AdministrationLand Lease AdministrationLand Lease AdministrationLand Lease Administration

What is Land?What is Land?What is Land?What is Land?• s.2 of CPO (CAP 219), land is defined as follows:• "land" (土地) includes-

(a) land covered by water;

(b) any estate, right, interest or easement in or over any land;

(bb) the whole or part of an undivided share in land and any estate, right, interest or easement in or over the whole or part of an undivided share in land; and (Added 31 of 1988 s. 2)

(c) things attached to land or permanently fastened to anything attached to land;

• In general, land refers to everything in, on and over the area bound by the land boundary.

• However, there may be exceptions:– utilities (such as pipes, wires, etc.) below ground; or – a land grant for a particular stratum only.

Boundary of A Lot?Boundary of A Lot?Boundary of A Lot?Boundary of A Lot?• In 1800s, no plan was attached to a lease

document;– The boundary dimensions and area of the lot were

described in the text of the Lease (i.e. Indenture).• Since early 1900s, lease document has a

grant plan;– The parcel description states the address and

area, whereas the plan contains dimension, size and shape of the land parcel;

– However, dimensions and areas shown on plans were imprecise, especially on steep slope.

Sub-division of Land LotSub-division of Land LotSub-division of Land LotSub-division of Land Lot• An assignment plan was attached to the Deed of

Assignment, showing the dimensions and area of the carved out portion of land;

• RP plan might not be prepared (until it is assigned);

• Defects of Old Assignment Plans:– Not checked;– No surveys;– Incompatible to the original Grant Plan;– Total area of the divided lots not equal to the original

area of the parent lot;– Inconsistency of dimensions among different versions;– Integrity to adjoining lots not verified.

Lot No. 123 s.A, Lot No. 123 s.A, Lot No. 123 s.A, Lot No. 123 s.A, s.B, RPs.B, RPs.B, RPs.B, RP

Freehold vs LeaseholdFreehold vs LeaseholdFreehold vs LeaseholdFreehold vs Leasehold• Government has no continuous income if freehold

interests are sold.• A free-tax port would expect to generate very few tax

income.

• Then Governor Sir Henry Pottinger in 1844 re-granted the land at a term of 75 years75 years75 years75 years only,

• but under the pressure of the landlords, Governor Sir George Bohem, on 3 March 1849 issued a Gazette Notification (GN) to announce that all Crown Leases granted for a term of 75 years may be extended for a further term of 924 years (i.e. 999-year999-year999-year999-year tenure).

What is aWhat is aWhat is aWhat is a LeaseLeaseLeaseLease????

• An indenture (front page) of a piece of land in Victoria Road;

• Signed in 1927

No No No No """"LeaseLeaseLeaseLease"""" after 1986? after 1986? after 1986? after 1986?• With the enactment of Conveyancing and

Property Ordinance (Cap. 219) on Nov 1, 1984• No lease would be issued• A Certificate of Compliance (CC) is deemed to

be the issuance of the lease for all CoS after Jan 1, 1970;

• The lease conditions and the boundary information rely on the land sale agreement.

• Conditions Conditions Conditions Conditions of Saleof Saleof Saleof Sale

Who owns the land before CC?Who owns the land before CC?Who owns the land before CC?Who owns the land before CC?• Government -> Developer -> Presale -> Resell -

> Mortgage -> Securitized and sell to the HKMC• Who is the owner?

– Government = Legal owner– Developer = Equitable owner– Buyers = Equitable owners– Mortgagor = Charger (see CPO)

GOVT.GOVT.GOVT.GOVT. DEVELOPERDEVELOPERDEVELOPERDEVELOPER

PRESALE PRESALE PRESALE PRESALE BUYER 1BUYER 1BUYER 1BUYER 1

RESALE RESALE RESALE RESALE BUYER 2BUYER 2BUYER 2BUYER 2

MORTGAGORMORTGAGORMORTGAGORMORTGAGOR

HKMCHKMCHKMCHKMC

2nd MORTGAGE2nd MORTGAGE2nd MORTGAGE2nd MORTGAGE

FORMALITY AND PRIORITYFORMALITY AND PRIORITYFORMALITY AND PRIORITYFORMALITY AND PRIORITY

• Can a lease be formed by an oral agreement?

• Does it need to be signed?• How about a lease without consideration?• Why it has to be registered?• What are the consequences if not

registered?• How about equitable interests?

FormalitiesFormalitiesFormalitiesFormalities• CPO: Land contracts to be in writing • s.2(1) Subject to s.6(2), no action shall be brought upon

any contract for the sale or other disposition of land unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and in writing and in writing and in writing and signedsignedsignedsigned by the party to be charged or by some other person lawfully authorized by him for that purpose.

• S.3(1) A legal estate in land may be created, extinguished or disposed of only by deedonly by deedonly by deedonly by deed.

• S.4(a) no equitable interest in land can be created or disposed of except by writing signedby writing signedby writing signedby writing signed by the person creating or disposing of the same, or by his agent thereunto lawfully authorized in writing, or by will, or by operation of law;

PrioritiesPrioritiesPrioritiesPriorities• Doctrine of Notice:

– Legal estates and interests bind the whole world;– Equitable estates and interests bind everybody except the bona fide

purchaser for value of the legal estate without notice of the equitable estate or interest.

– See Wong Chim-ying v. Cheng Kam-wing [1990] 2 HKLR 111; and the Land Title Ordinance enacted in 2004 (see http://hk.myblog.yahoo.com/ecyyiu/article?mid=1159)

• Land Registration:– Land Registration Ordinance, Cap. 128– Land search: 2-part: (1) details of the registered owners and the land;

and (2) the encumbrances affecting the lot, section, or undivided share.– Leases <= 3 years need not be registered (by s.3(2) of LRO)– All such deeds, conveyances, and other instruments in writing, and

judgments, as last aforesaid, which are not registered shall, as against any subsequent bona fide purchaser or mortgagee for valuable consideration of the same parcels of ground, tenements, or premises, be absolutely null and void to all intents and purposes: Provided that Provided that Provided that Provided that nothing herein contained shall extend to bona fide leases at rack nothing herein contained shall extend to bona fide leases at rack nothing herein contained shall extend to bona fide leases at rack nothing herein contained shall extend to bona fide leases at rack rent for any term not exceeding 3 yearsrent for any term not exceeding 3 yearsrent for any term not exceeding 3 yearsrent for any term not exceeding 3 years.

Priorities by RegistrationPriorities by RegistrationPriorities by RegistrationPriorities by Registration• S.3 of Land Registration Ordinance: Priority S.3 of Land Registration Ordinance: Priority S.3 of Land Registration Ordinance: Priority S.3 of Land Registration Ordinance: Priority

of registered instruments; effect of non-of registered instruments; effect of non-of registered instruments; effect of non-of registered instruments; effect of non-registrationregistrationregistrationregistration – (1) Subject to this Ordinance, all such deeds,

conveyances, and other instruments in writing, and judgments, made, executed, or obtained, and registered in pursuance hereof, shall have priority shall have priority shall have priority shall have priority one over the otherone over the otherone over the otherone over the other according to the priority of their respective dates of registration, which dates shall be determined in accordance with regulations made under this Ordinance.

WHAT IS A LEASE?WHAT IS A LEASE?WHAT IS A LEASE?WHAT IS A LEASE? Part 2 Part 2 Part 2 Part 2

• What constitute a lease?• Lease = Tenancy?• Lease vs Licence• Lease vs Easement• Lease is a contract?• Lease is a covenant?• Privity of Estate vs Privity of Contract

Lease vs TenancyLease vs TenancyLease vs TenancyLease vs Tenancy• Tenancy = Lease? (Short-term Tenancy)

• Leases in Hong Kong are in general of 999-, 99-, 75-, 75+75-, and 50-year tenures;

• Shorter tenures such as 2-year or 5-year are coined as short-term tenancies. They are the same as leases, except the period of tenure (and expectation of renewal).

Lease vs LicenceLease vs LicenceLease vs LicenceLease vs Licence• Waiver / Licence = Lease? (Short-term Waiver)• 4Ps of a lease:

– Certainty of Person– Certainty of Place– Certainty of Period– Certainty of Exclusive Possession– Certainty of Price (Rent)? NO

• Hotels / Guesthouses – Licence (Lam Man-yuen v. Luck Apartment [1964] HKLR 689)

• Lodgers w/ DMC – Lease (May King Dev. Co. v. Young Ching-huo Ltd. [1981] HKLR 280)

• Services Apartment – a Lease? a Licence? Or none of the above???

Government Land LicenceGovernment Land LicenceGovernment Land LicenceGovernment Land Licence• Mostly for temporary use, examples:

– Government Property Agency had granted licences of the old Kai Tak Airport for public entertainment.

– during the negotiation for the grant of lease of land at Sassoon Road, Pokfulam with the University of Hong Kong, Lands Department has granted licence for the purpose of carrying out demolition works.

• There is always a clause in licence saying that– ‘This Licence does not confer on you any right of exclusive

possession of the Licence Area. Possession is given on a temporary basis only and the Government reserves the right at all times, …to enter on the Licence Area for any purpose …This Licence is not intended by the parties to amount to a lease and that no relationship of landlord and tenant is created between the parties. This Licence does not imply and shall not be construed as implying any commitment on the part of the Government for the grant or lease of any interest in the Licence Area to you.’

EasementsEasementsEasementsEasements• An easement is a right enjoyed over the land of

another person;• Examples:

– Public space in private developments;– Rights of way;– Rights of water and drainage; and– Rights of support of buildings; etc.

• i.e. Liabilities to neighbouring sites/buildings;• i.e. Liabilities to passers-by (if allowed to get

through);

Dual Nature of a LeaseDual Nature of a LeaseDual Nature of a LeaseDual Nature of a Lease• Lease is one kind of covenants, which is both:

– A grant of an estate in the land to the tenant – Privity of Estate; and

– A contract between the original landlord and tenant – Privity of Contract.

• Privity of Contract – binds the parties only;• Privity of Estate – binds all the successors.

• i.e. Liabilities to both the contract party and all successors.

Privity of EstatePrivity of EstatePrivity of EstatePrivity of Estate• Are all covenants enjoy the privity of estate? • NO! It has to fulfill s.41 of CPO: Enforcement of Enforcement of Enforcement of Enforcement of

covenantscovenantscovenantscovenants – …(3) … subject to ss(5), a covenant shall run with the landa covenant shall run with the landa covenant shall run with the landa covenant shall run with the land

and, in addition to being enforceable between the parties, shall be enforceable against the occupiers of the land and the covenantor and his successors in title and persons deriving title under or through him or them by the covenantee and his successors in title and persons deriving title under or through him or them.

– …(10) This section shall apply to covenants whether entered into before or after the commencement of the Conveyancing and Property (Amendment) Ordinance 1988 (31 of 1988).

Not all conditions of a lease bind Not all conditions of a lease bind Not all conditions of a lease bind Not all conditions of a lease bind successorssuccessorssuccessorssuccessors

• P&A Swift Investment v Combined English Stores Group PLC [1989] 1 AC 633

• Supreme Honour Development Ltd v Lamaya Limited (1990) HCt HCA No. A2477/1989, [1990] 2 HKLR 294, [1991] 1 HKC 198.

• held that the covenant to be enforceable must affect the value of covenantee’s land or the mode of its use or enjoyment.

• Naming right of the building was held not to be a covenant which sufficiently relates to the land.

• Incorporated Owners of Nine Queen’s Road Central and JLW Management Services Ltd v Minkind Development Ltd (1996) HCMP 3979/1996

• Yazhou Travel Investment Company Ltd v David Geofrey Allan Bateson and Paul Anthony Starr (2000) HCA 6888/2000.

Ch.2 GOVERNMENT LEASE Ch.2 GOVERNMENT LEASE Ch.2 GOVERNMENT LEASE Ch.2 GOVERNMENT LEASE CONDITIONSCONDITIONSCONDITIONSCONDITIONS

• Conditions of Sale (of a piece of land)– Particulars of the lot (location, site area, rent)– General Conditions (adm., payment, setting out,

encroachment, boundary stones, breaches, etc.)– Special Conditions (possession, BC, user, trees,

landscaping, gfa, DDH, provisions of public facilities, access, car-park, alienation before compliance, DMC, slopes, dumping, utilities, drains and sewers, fire safety, etc.)

– Memorandum of Agreement (for signatures)– A back cover of the Agreement (dated)– A Location Plan – Information Note and Explanatory Note (if necessary)

Government Lease - Special Government Lease - Special Government Lease - Special Government Lease - Special ConditionsConditionsConditionsConditions

• Building Covenants • User clause

– Offensive Trades in old leases • Landscape and Tree

Preservation clause• GFA clause• DDH clause• Provision of Public Space in

Private Development clause• Restriction on alienation before

compliance• DMC

Building CovenantsBuilding CovenantsBuilding CovenantsBuilding Covenants• A control on the time that a landlord shall develop his/her

land;• There is no such control in Buildings Ordinance and

Town Planning Ordinance. • However, there are almost always a Building Covenant

(BC) in the land lease, • which is to ensure that the site is developed with an

acceptable amount of floor space (generally 60%) within a reasonable period of time (generally 48 months):– the purchaser shall develop the lot by erection of building(s)

complying with the conditions in the lease and any other relevant ordinances and regulations. Such building(s) must be completed or made fit for occupation on or before a (stipulated date in the future).

• In case that there is no progress at the end of BC period, the government can exercise its rights of re-entry without compensation.

• Yet, extension to BC period is possible subject to payment of premium.

• LAO PN 5/03 specified 2% of the assessed land value as the premium for 1 year extension, 4% for 2nd year and 8% for 3rd year (but a concessionary rates are applied in BC expired in 11/03 – 10/04).

• If the AP is able to certify that there is a reasonable expectation of an Occupation Permit (OP) to be issued within 3 months, a 3-month BC extension may be granted with deposit which is refundable without interest when OP is actually issued within the 3-month period.

• But there may have no BC clause in old leases, thus sites kept vacant (or as temporary car-park) for years can be found.

• BC in Modification/LE cases, see LAO 5/2008 at http://www.landsd.gov.hk/en/images/doc/2008-5.pdf?

User ClauseUser ClauseUser ClauseUser Clause• In very old leases, only offensive trades clause

is included;• And there is no restriction on land use.• In some old leases, a user clause is merely a

simple description of the building style, such as “a detached or semi-detached European house”;

• Then in modern land leases, user clause is almost always included;

• Use designations are: industrial, non-industrial (excluding office, godown, petrol filling station and hotel), residential, car parking, etc.

Offensive Trades Clause in Old Offensive Trades Clause in Old Offensive Trades Clause in Old Offensive Trades Clause in Old LeasesLeasesLeasesLeases

• ‘And that the said Lessees … shall not nor will during the continuance of this demise use exercise or follow in … any trade or business of a Brazier, Slaughterman, Soap-maker, Sugar-baker, Fellmonger, Melter of tallow, Oilman, Butcher, Distiller, Victualler or Tavern-keeper, Blacksmith, Nightman, Scavenger or any other noisy noisome or offensive trade or business whatever without the previous licence of His said Majesty signified in writing by the Governor …’

• Do they have any effects on current land use?

• A Fellmonger is someone who removes hair from animal hides in preparation for tanning;

• A victualler is a person supplying food and drinks; • A tavern keeper is a trade to operate a "hotel

/guesthouse“;

• Generally, land held under government lease subject to offensive trade clause cannot be used for hotel, restaurant and shops selling alcohol, without approval or a technical modification.

• Practice note (LAO PN 6/2007) has been issued in August 2007 clarifying the granting of licence for five offensive trades, viz. (1) suger-baker, (2) oilman, (3) butcher, (4) victualler, and (5) tavern-keeper

What is a House?What is a House?What is a House?What is a House?• Wah Yick case (Wah Yick Enterprises Co Ltd v. Building

Authority FACL 12/1998, [1999] 1 HKLRD 849). • A land owner in the New Territories, owned a piece of land

zoned for 'village type development' at the OZP, he submitted to the BA for a development of a 33 storey 33 storey 33 storey 33 storey block of residential flatsblock of residential flatsblock of residential flatsblock of residential flats on the land.

• It was rejected but the owner appealed by arguing that "house" use is allowed in the 1st column of the OZP, and in ordinary and legal meaning, there were no height restrictions to 'house' use.

• Is a 33-storey block of flats a "HOUSE"?• Each house should permit one main entrance and one

secondary entrance. A 33-storey building requires at least 2 exits under BO.

Interpretations of Special Terms Interpretations of Special Terms Interpretations of Special Terms Interpretations of Special Terms in Old Leasesin Old Leasesin Old Leasesin Old Leases

Distinguish houses in European style from those in traditional Chinese style

European

Permit the building to be used for the occupation of 1 family for residential use. (see Loi Po Investment Co. Ltd v Real Reach Co. Loi Po Investment Co. Ltd v Real Reach Co. Loi Po Investment Co. Ltd v Real Reach Co. Loi Po Investment Co. Ltd v Real Reach Co. LtdLtdLtdLtd [1986] HKLR 643)

Residence

Precludes multi-storey buildings (see T.S. Cheng & Sons Ltd v AGT.S. Cheng & Sons Ltd v AGT.S. Cheng & Sons Ltd v AGT.S. Cheng & Sons Ltd v AG [1986] HKC 607)

Villa(s)

No building or user restrictionMessuage(s) & Tenements

A single private house and precludes flatted development(see Wong Bei-nei v AG Wong Bei-nei v AG Wong Bei-nei v AG Wong Bei-nei v AG [1973] HKLR 582)

A private dwelling house

House of residential use onlyDwelling house

only one main entrance, or a secondary entrance not intended to provide normal access. (see Wah Yick Enterprise Co. Ltd v BAWah Yick Enterprise Co. Ltd v BAWah Yick Enterprise Co. Ltd v BAWah Yick Enterprise Co. Ltd v BA [1997] HKLRD 1177)

House

can mean multi-storey development for non-industrial useHouses

InterpretationInterpretationInterpretationInterpretationSpecial TermSpecial TermSpecial TermSpecial Term

• "if the block of flats has more than one main entranceone main entranceone main entranceone main entrance it would not qualify as a house,

• see Wong Bei Nei and Anoother v. AG [1973] HKLR 582 at p.593, and Kimber v. Adams [1900] 1 Ch. 412",

• This is currently the definition of a "house" adopted by the Lands Department (to differentiate with houses).

• In Real Honest Investment Ltd v. AG [1997] 2 HKC 182 • an apartment block of seven storeys, with one common main

entrance, (85 ft in height with 14 flats) was regarded as a house.• i.e. no restriction on height of a house.

• However, the court held that "in the notes from the Planning Information and Technical Administration unit of the Planning Department",

• a house is defined as a "dwelling house for residential occupation", • "usually of one to three storeys with separate rooms and full

services with ancillary car park and garden." • Furthermore, in the Yuen Long OZP, in the remarks in the notes for

house use, it is clear that any such house cannot exceed a height of three storeys or the height of the existing buildings.

• This low-rise idea of a house was upheld in this Wah Yick case.

What is an industrial use?What is an industrial use?What is an industrial use?What is an industrial use?• Cavendish Property Development Ltd. v. AG

[1987] CPR 212-220, HCMP 762/1987. • What is an industrial use?• A building in Aberdeen which provides

pantry and bathroom in each unit, so that "workers" can live there. Is it an industrial use?

• The special condition (8)(a) of the lease - type of building to be erected and (9)(a) - user clause: industrial purposes.

• Similar argument has also been raised in another well known case: Mexx Consolidated (Far East) v. AG [1987] HKLR 1210-1220, HCMP 2421/1986 before;

• In the Mexx case: "industrial purposes" involves a manufacturing processmanufacturing processmanufacturing processmanufacturing process. The main test for considering whether the building was an industrial was whether there was any process carried on therein for or incidental to the making of any article or part of an article."

• "Research, design, testing, making, inspection, packing and despatch" could be regarded as ancillary uses to an industrial use.

• Raider Ltd. v. Secretary for Justice [1999] 2 HKC 198-204, MP 2523/1998 (Paging Service case)

• "industrial use" was held to cover “a whole range of a whole range of a whole range of a whole range of human activities aimed at making moneyhuman activities aimed at making moneyhuman activities aimed at making moneyhuman activities aimed at making money."

• i.e., any economic behavior can be regarded as industrial use, including tuition class, retail shops, or even night clubs.

• Yet, the Raider case was appealed to the Court of Appeal in 1999 and finally to the Final Court of Appeal, and was held in 2000.

• In the Court of Appeal, the government's appeal was allowed, i.e. paging service is not an industrial use.

• "Raider has paid $4,454,659.10 to the Government for the period 6 February 1996 to 14 June 1999 in consideration of the Government waiving or purporting to waive its right to take action based on Raider's breach or alleged breach of special condition 2(a)."

• Raider Ltd v. Secretary for Justice (2000) 3 HKCFAR 309, [2000] 3 HKLRD 300, CFA .

• Final Court of Appeal, referred to the definition of a factory in the Factories and Industrial Undertakings Ordinance, Cap. 59:

• a 'factory means any premises or place, (other than a mine or quarry), in which articles are manufactured, manufactured, manufactured, manufactured, altered, cleansed, repaired, ornamented, finished, altered, cleansed, repaired, ornamented, finished, altered, cleansed, repaired, ornamented, finished, altered, cleansed, repaired, ornamented, finished, adapted for sale, broken up or demolished or in adapted for sale, broken up or demolished or in adapted for sale, broken up or demolished or in adapted for sale, broken up or demolished or in which materials are transformedwhich materials are transformedwhich materials are transformedwhich materials are transformed, and …

Canteens in Industrial BuildingsCanteens in Industrial BuildingsCanteens in Industrial BuildingsCanteens in Industrial Buildings• LACO 4/2005 and 2/2003 addresses that "Commercial

use in industrial building will be in breach of lease conditions if the user clause of the lease is restricted to industrial purpose and will be liable to lease enforcement action by the Lands Department."

• Whether a factory canteen is an ancilliary facility to a factory, or another commercial use?

• LandsD has prepared a standard template for the waiver letter, where it states that – (2)The canteen shall be used exclusively by the people

employed on the Lot; – (3)The canteen shall have no independent or direct exit to or

entrance from any public road, street, land or any other area whatsoever except such as may be required by the Building Authority for the purposes of escape in the event of fire or other emergency;

• These clauses make the existing canteens operating in a conspiracy way.

If there is no user clauseIf there is no user clauseIf there is no user clauseIf there is no user clause…………????• Many old leases do not

have user clause: – If there is no user clause,

then …– If there is no restrictions on

the maximum gfa, then …

– 市區大型地皮難求，西環山道一幢具重建為商業或住宅用途的巨型工廈昨日截標，由於物業佔地逾一萬三千方呎，加上屬於舊契，重建毋須補地價 ，重建潛力高，故受發展商青睞。

Maximum Permissible GFAMaximum Permissible GFAMaximum Permissible GFAMaximum Permissible GFA • In old leases, there is no max gfa clause;• In modern leases, almost all include detailed gfa clauses:• GFA clause: “the total gross floor area of any building or buildings

erected or to be erected on the lot shall not be less than xxxxx square metres and shall not exceed xxxxxx square metres.”

• Pre-empt liability clause: The Government does not guarantee that the building or buildings erected or to be erected on the lot can attain the maximum…

• GFA exemption clause: The Public Car-park … shall be taken into account for the purpose of calculating the total gfa …

• Definition of gfa clause: “gfa means the area contained within the external faces of the external walls of any building or buildings erected or to be erected on the lot measured at each floor level, together with the area of each balcony in such building or buildings, which shall be calculated from the overall dimensions of the balcony.” [curtain wall exemption is separately defined]

If there is no max. gfa clauseIf there is no max. gfa clauseIf there is no max. gfa clauseIf there is no max. gfa clause…………????• There have been cases in modern

leases that did not have max gfa clause, such as Island Resort case

• Why? What are the consequences?• The GFA of the site increased from

226,918 sm by 41,985 sm to 268,903 sm., which the AV estimated to be valued at $1,018 million.

• See http://hk.myblog.yahoo.com/ecyyiu/article?mid=574

Tree Preservation ClauseTree Preservation ClauseTree Preservation ClauseTree Preservation Clause• "No tree growing on the lot or adjacent

thereto shall be interfered with without the prior written consent of the Director who may, in granting consent, impose such conditions as to transplanting, compensatory landscaping or replanting as he may deem appropriate."

• A plant is a tree if its trunk diameter measures 95mm or more at a height of 1.3m above the ground level.

• Upon completion of the Tree Works, appoint a Registered Landscape Architect to sumbit a SCC (Self-Certificate of Compliance) to certify the completion and compliance.

• See LAO 7/2007 at http://www.landsd.gov.hk/en/images/doc/2007-7.pdf?

DDH ClauseDDH ClauseDDH ClauseDDH Clause• DDH (Design, Disposition and Height)

clause: – “The design, disposition and height of any

building or buildings erected or to be erected on the lot shall be subject to the prior written approval of the Director and no building works (other than site formation works) shall be commenced on the lot until such approval shall have been obtained.”

– Or a Rate and Range clause: ‘the buildings to be erected shall be of the same rate of building, elevation, character and description, and shall front & range in an uniform manner with the messuages or tenements in the same street’.

• It is seldom enforced as it affects building designs, but

• In Ying Ho Co. Ltd. & Ors v. Secretary for Justice [2005] 1 HKLRD 135, FACV 17/2003, CACV 291/2002 (Nina Tower case)

• Chinachem group acquired a lot in Tsuen Wan in 1991;• Planned to construct the tallest building of the world in 1994.• Although there is no statutory or contractual height restriction

affected the lot when the lot was tendered, the lease requires an approval of a master layout plan (MLP) before commencement of works;

• The DDH clause was specified. • Fourteen Master Layout Plans had been submitted but all were

rejected;• The proposed height of the tower might affect the flight paths for

aircrafts (in future). • Developers had paid waiver premia and liquidated damages due

breaching of the building covenants. • The court held that “no height restriction now does not mean no

height restriction in future, DDH clause requires approval of height.” • Yet, the court set out the limitation of government’s discretion under

DDH clause, i.e. no derogation from grant. • In the Nina Tower case, as the full plot ratio and GFA of the lot could

be utilized despite that the building might not be the tallest, there was no derogation from grant.

• As a result, we do not have the tallest tower in Tsuen Wan now.

• Crozet Ltd v. AG [1973-76] HKC 97 at p.101G;• Briggs CJ, sitting at first instance and dealing with a

DDH clause,• “saw no reason why a lease condition cannot be used to

enforce Government policy, provided that the policy was within the law.”

• As noted in Roger Bristow: Land-use and Planning in Hong Kong (1984) at pp 26, 154, 161 and 195,

• the beginnings of our system of town planning through lease conditions as well as statute can be traced back to the middle of the 19th century.

• Within limits the Government is entitled to use a DDH clause to achieve its lawful town planning objectives including the restriction of building height in the interest of safe and efficient aviation.

• It implies that a DDH clause empowers the landlord (Government) an extremely powerful control in the design, disposition and height of a development.

DMC clauseDMC clauseDMC clauseDMC clause• “assign, mortgage, charge or part with the

possession…by way of an assignment or other disposal of undivided shares in the whole of the lot together with the right to the exclusive use and occupation of individual floors and units in any building …subject to … a DMC,…”

• New Clause on the requirement of a Maintenance Manual since April 2006;

• The LACO (2006) is available at http://www.landsd.gov.hk/en/images/doc/56.pdf, which is the LACO Circular Memo No. 56 on Revised Guidelines for DMC.

• Requires developers to compile a maintenance manual for the Works and Installations for the reference of future building owners and manager.

• See HKIS (2010) A Guide to Prepare a Building Maintenance Manual, prepared by Edward Yiu

Provision of Public SpaceProvision of Public SpaceProvision of Public SpaceProvision of Public Space • Special Conditions (SC) in the

Conditions of Sale of the land I.L. 8941 at the Central Market, Jubilee Street, Central, Hong Kong.

• for commercial use, site area 0.4153 ha.

• SC: Open Space of 1,500 sm is required and the word PUBLIC Open Space (POS) is explicitly specified.

• A detailed Technical Schedule for the POS is also provided at the back of the SC.

• Who owns the public space?• What are the legal estates of the

public space in a private development?

• Who bears the maintenance and management costs?

Alienation ClauseAlienation ClauseAlienation ClauseAlienation Clause• for a consent scheme, a restriction on alienation before

compliance clause is provided similar to the following:• “…prior to compliance with these Conditions in all

respects to the satisfaction of the Director and in conformity with any conditions imposed by him (including the payment of such fees as may be required by him):-

• (a) assign, underlet or part with possession of or otherwise dispose of the lot or any part thereof or any interest therein or any building or part of any building thereon (whether by way of direct or indirect reservation, the grant of any right of first refusal, option or power of attorney, or any other method, arrangement or document of any description) or enter into any agreement so to do;…”

How about a clause not enforced?How about a clause not enforced?How about a clause not enforced?How about a clause not enforced?• whether a lack of enforcement

action renders a waiver / estoppel is determined by the length of time.

• In Citiword Ltd v Tai Ping Wing Citiword Ltd v Tai Ping Wing Citiword Ltd v Tai Ping Wing Citiword Ltd v Tai Ping Wing [1995] 2 HKC 181, the court held that government’s lack of enforcement action for 5 years did not amount to estoppel,

• but in A.G. v Fairfax LtdA.G. v Fairfax LtdA.G. v Fairfax LtdA.G. v Fairfax Ltd [1997] HKLRD 243, it was held that government had abandoned a covenant restricting building on a Mid-levels plot to villas by waiving her right over 40 years.

Ch. 3 LEASE VARIATIONSCh. 3 LEASE VARIATIONSCh. 3 LEASE VARIATIONSCh. 3 LEASE VARIATIONS

• Lease Exchanges• Lease Modifications• Is it subject to judicial review?

– Reasonableness – Permanent or Transient?

Land Land Land Land ExchangeExchangeExchangeExchange

• Surrender and regrant– For road

straightening;– For marriage value

(URA);– For preservation of

heritage (AMO);– For town planning

(Swire Primary School case)

Lease ModificationsLease ModificationsLease ModificationsLease Modifications• Any modifications of lease conditions require approval;• All modifications require land premium;• Administrative or technical modifications are still required to pay a

nominal land premium for administrative costs. (because it is contended that no owners would ask for a modification if it does not provide him benefits)

• Many routine modifications have been standardized as technical modifications.

• Premium payable = land value after – land value before (at a designated date)

• It takes at least 15 weeks (to several years) to assess the premium, and it is subject to review and appeals.

• See LAO 1/2006 at http://www.landsd.gov.hk/en/images/doc/2006-1e.pdf? And LAO 4/2009.

• Shall owners start construction before an agreement on premium? (Dragon Centre case)

Technical ModificationsTechnical ModificationsTechnical ModificationsTechnical Modifications• Examples of Technical Modifications:

– (a) To extinguish rights-of-way reserved to Government over common staircases, landings, etc., within buildings.

– (b) To permit only a part of a building on a lot with "a building or buildings" restriction.

– (c) To remove specified trades from the "Offensive Trade" clause. – (d) To permit caretakers' offices which comply with the GFA limit

specified in the lease condition exempting that office area from GFA and site coverage calculations.

– (e) From "Industrial" to "Industrial/Godown". – (f) For dedication of corner splay. – (g) To exempt from site coverage calculations the architectural features

(other than structural beams and columns) not accountable forand air-conditioner hoods, boxes and platforms. (h) Required by Government to revise the vehicular access points or to provide additional access points."

• They would be in general approved, with a nominal premium.

ReasonablenessReasonablenessReasonablenessReasonableness• Generally speaking, government decisions have to be

reasonable as they are governed by the Administrative Laws.

• Otherwise, people may seek judicial review on them. However, as discussed previously on judicial review.

• But, LandsD decisions on land matters are held to be exempted from this requirement of reasonableness.

• It is because each lease executed is a private transaction with appropriate contractual rights and that such transactions cannot be considered as performing an executive function.

• They are not susceptible to judicial review. • There is no requirement of reasonableness in the exercise

of its discretion as landlord whether to grant modification or not, what level of premium to be charged and any conditions included.

• In the Nina Tower case, if it is the DDH clause that matters, can it be modified with premium?

• Is the Director of Lands Department empowered to exercise discretion to approve or disapprove the Master Layout Plan?

• The answer is YES, as the court referred to the decisions in "Hang Wah Chong Investment Co. Ltd v. AG [1981] HKLR 336,

• the effect of that decision was summarised by this Court in Raider Ltd v. Secretary for Justice (2000) 3 HKCFAR 309 atpp 313J-314A and Director of Lands v. Yin Shuen Enterprises Ltd (2003) 6 HKCFAR 1 atp.14D-F.

• Shortly stated “it is that qua landlord the Government is as free as it is that qua landlord the Government is as free as it is that qua landlord the Government is as free as it is that qua landlord the Government is as free as a private landlord to refuse to modify a lease condition or to name a private landlord to refuse to modify a lease condition or to name a private landlord to refuse to modify a lease condition or to name a private landlord to refuse to modify a lease condition or to name its price for such modificationits price for such modificationits price for such modificationits price for such modification." [emphasis added]

• the only limitation in exercising the DDH clause is: • “…that its exercise must not undermine express or implied contractual

rights conferred by the Conditions on the Developers. In other words, the Government must not, by use of the DDH clause, derogate from its grant to the Developers."

• Canadian Overseas Development Co. Ltd. v. Attorney General, [1991] 1 HKC 288, CIVIL APPEAL NO 4 OF 1991.

• rejection of Master Layout Plan (MLP) on the Fairview Park Development in the New Territories, titled

• Since the MLP 7 was rejected by the government, a judicial review was raised by the developer on the Wednesbury unreasonableness in Administrative Law.

• The court held that "the Crown's right to approve or refuse the approval of a master layout plan submitted to it for its approval is governed by the law of contractlaw of contractlaw of contractlaw of contract and is not susceptible to not susceptible to not susceptible to not susceptible to judicial review"judicial review"judicial review"judicial review" [emphasis added]

• Other supporting cases: – Hang Wah Chong Investment Co. Ltd v AG Hang Wah Chong Investment Co. Ltd v AG Hang Wah Chong Investment Co. Ltd v AG Hang Wah Chong Investment Co. Ltd v AG

[1981] HKLR 336, [1981] WLR 1141 and – Secan Ltd v AGSecan Ltd v AGSecan Ltd v AGSecan Ltd v AG [1995] 2 HKLR 523 – See also Li Sui-yuet v AGLi Sui-yuet v AGLi Sui-yuet v AGLi Sui-yuet v AG [1970] HKLR 428, – Lok On Co. Ltd v AG Lok On Co. Ltd v AG Lok On Co. Ltd v AG Lok On Co. Ltd v AG [1986] HKLR 857 (CA).

• Except:– Hong Kong & China Gas Co. Ltd v Director Hong Kong & China Gas Co. Ltd v Director Hong Kong & China Gas Co. Ltd v Director Hong Kong & China Gas Co. Ltd v Director

of Lands of Lands of Lands of Lands [1997] HKLRD 1291.– Depends on whether “the making of the

decision [is] the performance of a function within the public domain"

Are Modifications Permanent or Are Modifications Permanent or Are Modifications Permanent or Are Modifications Permanent or Transient?Transient?Transient?Transient?

• The decision in the Real Honest case (Real Honest Investment Ltd v AG [1997] 2 HKC 437) held that– the waiver allowing the building height was restricted to that

building only, – it did not amount to a waiver of the restriction for all time.

• As Lord Clyde said, "If it had been the intention to grant a waiver of the restriction on height for any future building at any time during the future currency of the lease and its renewal that could have been done, but it would require clear language to express that intention."

• Expressluck Development Ltd & Another v Secretary for Justice (2007) CFI HCMP 1432/2005, 1873/2006, [2007] HKEC 1352.

• cited by the judge from Denning LJ's judgment in the case Wolfe v Hogan (1949) 2 KB 194 as follows:

• "Any acceptance of rent by the landlord, after knowledge, only waives the breaches up to the time of the acceptance of rent. It does not waive the continuance of the breach thereafter and, notwithstanding his previous acceptance of rent, the landlord can still proceed for forfeiture on that account."

• The difference between a waiver of a breach of a covenant and a waiver of the covenant itself shall be carefully distinguished.

• Gaiman Ltd v The Secretary for JusticeGaiman Ltd v The Secretary for JusticeGaiman Ltd v The Secretary for JusticeGaiman Ltd v The Secretary for Justice (1998) HCMP No. 3119/97.

• A redevelopment proposal for no. 30 Po Shan Road (I.L. 6070), Conditions of Sale dated 4.11.1940

• Special Condition (2): “The Purchaser will not be allowed to erect any building on the lot except one detached or two semi-detached residences of European type.”

• An OP was issued on 4.7.1950 for one European type house, • but on 27.11.1950, a new purchaser, British American Tobacco Ltd

(BAT), asked for permission to convert the house into three flats. • The request was permitted by an no-objection letter on 11.12.1950

in the following wordings: • “…I am now directed to inform you that in the event of the purchase

of this property by the BATby the BATby the BATby the BAT, there will be no objection to the no objection to the no objection to the no objection to the conversion of the house into three flatsconversion of the house into three flatsconversion of the house into three flatsconversion of the house into three flats and that SC(2) of the Agreement and Conditions of Sale No. 4157 under which the property is held will be deemed to be modified accordingly.” [emphasis added]

• i.e. there had been a modification of the SC(2) allowing the conversion of a house into 3 flats.

• Then, the plaintiff had purchased the lot on 10.6.1996 and submitted building plans for the redevelopment of the lot to a 19-storey apartment block19-storey apartment block19-storey apartment block19-storey apartment block, but claiming that it consists of 3 flats.

• The argument put forward in this case was – (1) whether an erection of a new building was considered as a

conversion of the house; and – (2) whether the modification was still applicable.

• The court upheld the argument put forward by the defendant that erection of a new building could NOT be regarded as conversion

• and the modification was on the condition that the purchaser was BAT,

• in other words, the previous ‘no objection’ had lapsed and the original lease conditions should apply.

• However, this case was not deciding that the word "Conversion" cannot be interpreted as "Erection",

• the decision was made by inferring to the intention of the parties.

• The court quoted Litton J.A. paragraph in Real Honest Real Honest Real Honest Real Honest Investment Ltd. v. AGInvestment Ltd. v. AGInvestment Ltd. v. AGInvestment Ltd. v. AG [1997] 2 HKC 182 that,

• "It is as well to bear this point in mind: the restrictive covenant is enshrined in a deed granting an interest in land for a long term. One would expect, in normal circumstances, that any modification of the covenants to be likewise effected by deed. The matter is, ultimately, The matter is, ultimately, The matter is, ultimately, The matter is, ultimately, one of the intention to be imputed to the parties..."one of the intention to be imputed to the parties..."one of the intention to be imputed to the parties..."one of the intention to be imputed to the parties..." [emphasis added]

WHICH ONE PREVAILS? WHICH ONE PREVAILS? WHICH ONE PREVAILS? WHICH ONE PREVAILS? STATUTE OR LEASESTATUTE OR LEASESTATUTE OR LEASESTATUTE OR LEASE

• When government’s land interests are compromised;

• When private owner’s land interests are compromised;– involve land resumption;– Does not involve land resumption.

Governance of Government Land Governance of Government Land Governance of Government Land Governance of Government Land LeasesLeasesLeasesLeases

• Common LawCommon LawCommon LawCommon Law [what is a lease, privity of estate, termination and renewal, covenants, adverse possession, …]

• StatutesStatutesStatutesStatutes:• Land (Miscellaneous Provisions) Ordinance, Cap. 28 [unlawful occupation, …]• Land Resumption Ordinance, Cap. 124 [land resumption and compensation for public

purpose]• Government Rent and Premium (Apportionment) Ordinance, Cap. 125 [authority of

the Director of Lands]• Government Rights (Re-entry and Vesting Remedies) Ordinance, Cap. 126 [re-entry

for breach of lease conditions]• Land Registration Ordinance, Cap. 128 [Register, priority]• Conveyancing and Property Ordinance, Cap. 219 [formalities, interests transfer,

mortgages, etc.]• Government Rent (Assessment and Collection) Ordinance, Cap. 515 [rent

assessment and collection]• Land (Compulsory Sale for Redevelopment) Ordinance, Cap. 545 [compulsory sale]• Land Titles Ordinance, Cap. 585 [land titles, equitable interests, …]• New Territories land has its own set of governance

• Landlord and Tenant (Consolidation) Ordinance does not apply to government leases

Statutes vs Lease Conditions 1Statutes vs Lease Conditions 1Statutes vs Lease Conditions 1Statutes vs Lease Conditions 1

• Statutes do not reduce the governmentStatutes do not reduce the governmentStatutes do not reduce the governmentStatutes do not reduce the government’’’’s rights:s rights:s rights:s rights:• In Mexx Consolidated (Far East) Ltd v AG Mexx Consolidated (Far East) Ltd v AG Mexx Consolidated (Far East) Ltd v AG Mexx Consolidated (Far East) Ltd v AG [1987]

HKLR 121 – “no matter what approval the TPB may have given, that would

not have affected or reduced the Crown’s contractual powers under the Crown lease.”

• BO s.14(2): – “neither the approval of any plans nor the consent to the

commencement of any building works shall be deemed … to act as a waiver of any term in any lease or licence.”

• Any concessions by statutes may not be granted by LandsD, or may have to pay land premium.

Statutes vs Lease Conditions 2Statutes vs Lease Conditions 2Statutes vs Lease Conditions 2Statutes vs Lease Conditions 2• Statutes override Lease Conditions (without Statutes override Lease Conditions (without Statutes override Lease Conditions (without Statutes override Lease Conditions (without

compensations):compensations):compensations):compensations):• Zoning and plot ratio control override lease conditions

without compensation;• The prevalence of statutory plot ratio controls under TPO

(Cap. 131) was upheld in Crozet Ltd v AG Crozet Ltd v AG Crozet Ltd v AG Crozet Ltd v AG [MP No. 409/1973] and AG v C C Tse (Estate) LtdAG v C C Tse (Estate) LtdAG v C C Tse (Estate) LtdAG v C C Tse (Estate) Ltd [1982] HKLR 7 (CA).

• In Lam Kwok Leung v AGLam Kwok Leung v AGLam Kwok Leung v AGLam Kwok Leung v AG [1979] HKLR 145, it was held that planning or other statutory powers adversely affecting a lessees’ rights do not amount to any derogation of grant.

• Others:– Land (Miscellaneous Provision) Ordinance, Cap. 28– Government Rights (Re-entry and Vesting Remedies) Ordinance,

Cap. 126

Statutes vs Lease Conditions 3Statutes vs Lease Conditions 3Statutes vs Lease Conditions 3Statutes vs Lease Conditions 3• Statutes override Lease Conditions (with compensations):Statutes override Lease Conditions (with compensations):Statutes override Lease Conditions (with compensations):Statutes override Lease Conditions (with compensations): • Land Resumption Ordinance, Cap. 124• Other land acquisition for public purposes:

– Foreshore and Sea-Bed (Reclamations) Ordinance, Cap. 127– Mass Transit Railway (Land Resumption and Related Provisions)

Ordinance, Cap. 276– Roads (Works, Use and Compensation) Ordinance, Cap. 370– Land Drainage Ordinance, Cap. 446– Railways Ordinance, Cap. 519– Land Acquisition (Possessory Title) Ordinance, Cap. 130– Town Planning Ordinance, Cap. 131– Land (Compulsory Sale for Redevelopment) Ordinance, Cap.

545– Urban Renewal Authority Ordinance, Cap. 563

Compensation without Hope ValueCompensation without Hope ValueCompensation without Hope ValueCompensation without Hope Value

• S.12(c) Land Resumption Ordinance, Cap. 124• “no compensation shall be given in respect of

any expectancy or probability of the grant or renewal or continuance, by the Government or by any person, of any licence, permission, lease or permit whatsoever.”

• There have been several big cases, but all failed:– Yin Shuen case;– Dragon House case;– Penny’s Bay case.

• For more details, see http://hk.myblog.yahoo.com/ecyyiu/article?mid=2859

LEASE TERMINATION AND LEASE TERMINATION AND LEASE TERMINATION AND LEASE TERMINATION AND RENEWALRENEWALRENEWALRENEWAL

• What would happen when a lease expires?– Termination of Land Lease upon Expiry– Renewal of Renewable Lease upon Expiry– Regrant of Non-Renewable Lease upon

Expiry (Pokfulam Garden case)– Automatic Extension of Non-Renewable

Lease (HK & China Gas case, Kam Lan Koon case, Home Restaurant case)

Termination of Land Lease upon Termination of Land Lease upon Termination of Land Lease upon Termination of Land Lease upon ExpiryExpiryExpiryExpiry

• Very rare, except for public purposes;• E.g. Hong Kong & China Gas Co. Ltd v. Director of

Lands HCAL50/1997;• Special policies on lease termination:

– leases for recreational purposes may not be extended beyond a term of 15 years;

– leases of land covered by franchises or operating licences will normally be extended co-terminous with the franchise or licence;

– leases for petrol filling stations will not be extended upon expiry of existing leases, petrol filling station sites will be re-tendered on the open market; and

– leases for kerosene stores will not be extended; however, short term tenancies at full market rental may be offered to existing lessees for an initial term of three years.

– (see LandsD land policy statement)

HK & China Gas caseHK & China Gas caseHK & China Gas caseHK & China Gas case• (HK & China Gas case [1997] 1 HKLRD 1291, [1997] 3 HKC 520;• A land lot in Tsuen Wan to be expired in June 1997;• LandsD decided not to extend, and "the reason given was that the

land was not being used for the purpose for which the lease had not being used for the purpose for which the lease had not being used for the purpose for which the lease had not being used for the purpose for which the lease had originally been grantedoriginally been grantedoriginally been grantedoriginally been granted."

• user clause: the lot shall be used for the production and storage of gas and for commercial purposes specifically associated with selling gas and providing gas services only;

• But since 1979, the site has been used by the Company as an emergency and maintenance depot.

• A government (1987) phamplet said, "In general, leases for special purposes will be extended unless the land is required for a public purpose or is no longer being used for the purpose for which it was originally granted. Most extensions will be to 30 June 2047; some might be for a shorter period if the land is likely to be required for a public purpose before that date or is unlikely to be needed for its original purpose for the full period."

Ocean Terminal caseOcean Terminal caseOcean Terminal caseOcean Terminal case• Lease of the Ocean Terminal started on

June 17, 1966, for 25-year renewable for 21-year; i.e. to be expired in 2012;

• In 2004, LandsD said, “The land lease of the permanent pier of Ocean Terminal would not be renewed upon its expiry in 2012, The lease will be disposed of by open competition in due course.”;

• Wharf applied for a judicial review; • In 2007, LandsD said, “the only decision

made in 2004 was to refuse a suggestion that Wharf surrender the site and be regranted a new lease of 21 years. It had yet to make a final decision on the site’s future when the lease expires in 2012.”

•see http://www.thestandard.com.hk/stdn/std/Business/GB21Ae05.html.

Renewal of Renewable Lease Renewal of Renewable Lease Renewal of Renewable Lease Renewal of Renewable Lease upon Expiryupon Expiryupon Expiryupon Expiry

• 75+75 years, i.e. an optional renewable term in the original lease for another 75 years when the first 75-year lease expired.

• E.g. Chi Fu Fa Yuen • Any land premium required to exercise the option?• Precedent case: all land leases in the NT renewed in

1973 for the 75+24-3 option: The owners did not have to pay land premium for these renewals, but just the annual land rent. (s.4 of NT (Renewable Crown Leases) Ord.);

• Statute: Government Leases Ordinance (Cap. 40) enacted in 1973: no premium for renewal, but land rent at 3% of the rateable value p.a.;

• But in 1969, a LOCM 34 spelt out the requirement of paying full premium for lease renewals.

Regrant of Non-Renewable Regrant of Non-Renewable Regrant of Non-Renewable Regrant of Non-Renewable Lease upon ExpiryLease upon ExpiryLease upon ExpiryLease upon Expiry

• How about regrant of non-renewable leases?• E.g. Pokfulam Garden

– A. Yes, full premium is payable– B. No, automatic extension of the lease to 2047 with 3% annual land rent– C. No, automatic extension of the lease for 50 years with 3% annual land

rent– D. Unknown

• Land Policy Statement: http://www.landsd.gov.hk/en/service/landpolicy.htm

• “Non-renewable leases, MAYMAYMAYMAY, upon expiry, be extended for a term of 50 years50 years50 years50 years without payment of an additional premium but subject to payment of an annual rent from the date of extension at 3% rateable value as for new leases in (i) above. The extension of such leases is wholly at the discretion of the HKSARG; for instance, if the land is required for a public purpose or is no longer being used for the purpose for which it was originally granted, then the lease is unlikely to be extended.”

Pokfulam Garden casePokfulam Garden casePokfulam Garden casePokfulam Garden case• The site was originally Swire House (a printing company) Village;• The lease was granted in Nov. 1956 as a non-renewable 50-year tenure, i.e.

to be expired in Nov. 2006;• The Pokfulam Garden was completed in 1979;• In 2000, the estate was just 20 years old, but leases would be expired in less

than 6-year time, would you buy a flat there?

• Until April 2005, 18-month before the expiry,..., all existing owners at that time of Pokfulam Garden received a noticing letter from Lands Department announcing an offer to the owners to regrant the land lease;

• The condition of land lease renewal offered by the Lands Department was summarized as follows:

• Re-grant for 50-year;• No premium is required;• But 3% of rateable value payable as annual rent.

Automatic Extension of Non-Automatic Extension of Non-Automatic Extension of Non-Automatic Extension of Non-Renewable LeaseRenewable LeaseRenewable LeaseRenewable Lease

• Kam Lan Koon case, Home Restaurant case(1986) HCMP 2135/1986

• The lease where the restaurant was located had expired in 1978;

• The government offered the applicant to grant a new lease in 1986;

• But, the grant required the payment of a substantial premium as well as annual rent!

• The Sino-British Joint Declaration (Annex III, on 27 May 1985), all leases to be expired before 30 June 1997 shall automatically be renewed to 30 June 2047 subject to just 3% annual land rent, why not on this restaurant?

• The court held that “a treaty is not justiciable in municipal courts unless it has been incorporated into the law.”

• After the enactment of the Basic Laws, what are the stipulations?