2.Mr Philip MA elaborated on the three points stated in the RMAs written submission dated 18 September 1996 (Appendix 1 to LegCo Paper No. CB(2) 37/96-97). His presentation was summarized as follows:

Clause 3 - Definition of "owner"
3. The definition of "owner" should only include "landlord" but not "tenant". It should be made clear in the Bill that landlords were to be responsible for major installations involving capital costs, such as automatic sprinkler systems, and tenants for minor items, such as portable fire extinguishers.
Schedule 1 - Prescribed commercial activities
4. The prescribed commercial activities listed in Schedule 1 of the Bill were not comprehensive. Other commercial activities which attracted significant number of customers to the premises concerned should also be included, such as drug store, fast food shop, electrical appliances shop and furniture shop.
A 3-year grace period before enforcement of the legislation
5. Major improvement works to be carried out in a retail shop would seriously affect the business of the tenant concerned. For example, the installation of an automatic sprinkler system might require the temporary closure of the shop for a certain period. This was not fair to the tenant concerned. Hence, the legislation should only be enforced after the expiry of the lease, where the tenant could take this factor into consideration on whether to renew the lease or not. A 3-year grace period should therefore be introduced to cover normal lease terms.

Discussions

Definition of "owner"

6. In response to some members enquiries, Mr Philip MA confirmed that the RMA suggested to define "owner" as "landlord" and:

to state clearly in the Bill the respective responsibilities of landlords and tenants as proposed at para. 2(a) above; or
to state clearly in the Bill that enforcement action would be taken against landlords. It would be up to the landlords to decide whether to comply with the requirements on their own or to ask the tenants to comply with the requirements, if that was provided in the tenancy agreement.

7. Mrs Miriam LAU considered the RMAs two proposals at para. 3(a) and (b) above contradictory. Mr Philip MA advised that the RMA considered those two proposals more acceptable than the original one under the Bill where fire safety directions could be served on both landlords and tenants.

8. In response to some members enquiries on the RMAs proposal at para. 3(b) above, Mr Philip MA advised that in most of the commercial leases, there were provisions under which landlords could require the tenants to carry out certain improvement works in the premises concerned. Accordingly, it was assumed that landlords could require the tenants to comply with a fire safety direction. Mrs Miriam LAU felt otherwise. She pointed out that not all commercial leases had provisions under which responsibilities of landlords and tenants in respect of improvement works were clearly defined. This was particularly so for those leases not arranged by legal professionals. If the RMAs proposal at para. 3(b) above was adopted, it might give rise to disputes between landlords and tenants as to who should carry out the required improvement works. Mr Ronald ARCULLI also pointed out that the proposal could have serious implications on individual tenants of small units in a shopping arcade as they could be required by the landlord to carry out major installation works, which could be very costly. After discussions, Mr MA confirmed that the RMA would favour its proposal at para. 3(a) but not para. 3(b) above.

Extending the scope of Schedule 1 of the Bill

9. Mr Edward HO asked whether members of the RMA supported its proposal at para. 2(b) above to extend the scope of Schedule 1 of the Bill to cover other commercial activities such as fast food shop and electrical appliances shop. Mr Philip MA advised that members of the RMA supported the Administrations proposal to require the installation of an automatic sprinkler system in commercial premises with a total floor area exceeding 230m².

10. Mrs Selina CHOW considered that for the sake of clarity and fairness, the Administration should reconsider the list of commercial activities to be included in Schedule 1. For example, under the present drafting of the Bill, enforcement action could be taken against a fast food shop operating in a shopping arcade with a total floor area exceeding 230m², but not against a stand alone fast food shop with similar customer flow. In this connection, Mr Philip MA considered that both jewellery shops and electrical appliances shops had significant customer flow. As the former was included in Schedule 1, Mr MA wondered why the latter was not so. The Chairman pointed out that these two types of businesses were not exactly comparable because jewellery shops, for security reasons, had normally installed double doors which would nevertheless hinder people from escaping in the event of fire.

Adm

III. Meeting with Representatives from Real Estate Developers Association of Hong Kong (REDA) and Hong Kong Institute of Architects (HKIA)

(LegCo Paper No. CB(2) 310/96-97)
Briefing by Mr S Y WAI

11. Mr S Y WAI briefed members on the joint submission dated 30 October 1996 from the REDA and the HKIA. The joint submission was tabled at the meeting.

[Post-meeting note: The joint submission was issued to absent members after the meeting under LegCo Paper No. CB(2) 310/96-97.]

12. As a whole, Mr S Y WAI advised that both the REDA and the HKIA supported the spirit of the Bill but were concerned about the problems that would arise from enforcing the legislation. Apart from those problems mentioned in the joint submission, Mr WAI pointed out that in para. 2 of the "Explanatory Memorandum" of the Bill, it was stated that "Prescribed commercial activities include banking, off-course betting, use as department stores, use as shopping arcades and similar kinds of activities that are undertaken on premises frequently visited by members of the public". The phrase "similar kinds of activities" was so broad that it could mean various kinds of activities which were not included in Schedule 1 of the Bill. This would cause ambiguities on the scope of the Bill. For example, it was not clear whether "similar kinds of activities" included those activities in market complexes of the two municipal councils and, government offices/shroffs frequently visited by members of the public.

Discussions

Paragraph 9 of the joint submission - Implications of the Bill on long-term tenancies and foreign investors

13. In response to the Chairmans enquiry on para. 9 of the joint submission, Mr S Y WAI advised that the actual implications of the Bill on long-term tenancies and foreign investors would depend on how frequent and extensive the Codes of Practice would be revised in future. Nevertheless, compliance with a revised Code of Practice would require certain improvement works to be carried out in the premises concerned. If the landlord was responsible for that, he might ask the tenant to close his shop temporarily until completion of the improvement works. If the tenant was responsible for that, he had to bear the costs of the improvement works. In either one of these situations, the tenant would suffer an increase in business costs. In the circumstances, foreign investors would be discouraged from leasing commercial premises in Hong Kong. Mr C K LAU also pointed out that after passage of the Bill, substantial improvement works would be required for some of the American supermarkets in Hong Kong. If enforcement action was to be taken within the 8-year or 10-year lease period, it would give rise to the question as to who should compensate the tenant for his loss.

Paragraphs 14, 16 and 17 of the joint submission - Grace period for existing non-sprinklered premises, buildings under construction and newly completed buildings

14. Mr Ronald ARCULLI asked for clarification on the meaning of "grace period" in paras. 14, 16 and 17 of the joint submission. He queried whether the REDA and the HKIA were seeking permanent exemption from the Bill, but not a grace period, for non-sprinklered premises, buildings under construction and newly completed buildings. Mr Paul DOUGLAS confirmed that they were seeking a grace period. In response to Mrs Selina CHOWs enquiry, Mr S Y WAI advised that for non-sprinklered premises, it was difficult for the REDA and the HKIA to tell how long the grace period should be because most of these premises were not owned by members of the REDA and the HKIA. For newly completed buildings, the REDA and the HKIA recommended a grace period of 5 to 10 years as these buildings should have no great deficiencies.

15. Mr Ronald ARCULLI pointed out that in some cases, it might be impossible to carry out the required improvement works. However, any owner of prescribed commercial premises who failed to comply with a fire safety direction was guilty of an offence. Mr C K LAU advised that this was also a concern of the REDA and the HKIA. While they believed that the enforcement authorities would be as pragmatic and reasonable as possible when enforcing the legislation, they were concerned that owners of commercial premises would be subject to criminal sanction if they were unable to comply with a fire safety direction. In this connection, they noted that the Administration had identified 500 buildings, mostly constructed before 1973, each of which had a total floor area exceeding 230m² and did not have a sprinkler system, as the focus of enforcement action to be taken in the first phrase. The REDA and the HKIA therefore suggested the Administration:

in the first instance, to target its enforcement action against these 500 non-sprinklered buildings and another 500 buildings of the same nature of the Housing Authority; and
after enforcement action against these 1000 buildings had been completed, to conduct a review to see if there were any enforcement difficulties involved and whether enforcement action should be extended to existing sprinklered buildings.

16. Mr Ronald ARCULLI considered that apart from the installation of an automatic sprinkler system, the provision of adequate means of escape in the event of fire was also very important from the fire safety point of view. As such, attention should not only be focused on those non-sprinklered buildings, but also on those sprinklered buildings which did not have adequate means of escape in the event of fire. Mr C W TONG shared this view. However, he pointed out that as it was impossible for the Administration to take enforcement action against all prescribed commercial premises at the same time, it had to set a priority. As the lack of an automatic sprinkler system was considered to be the most serious problem, enforcement action should be taken against the non-sprinklered buildings first. Those buildings which had inadequate means of escape in the event of fire or other deficiencies should be tackled at a later stage.

17. Mr Ronald ARCULLI suggested and members agreed to seek the views of the REDA and the HKIA on the analysis and layout plans of those 22 commercial buildings surveyed by the Buildings Department.

[Post-meeting note: The Administrations letter dated 11 October 1996 (Appendix to LegCo Paper No. CB(2) 124/96-97) and the relevant layout plans (LegCo Paper No. CB(2) 154/96-97) were issued to the REDA and the HKIA for comments on 1 November 1996.]

Paragraph 14 of the joint submission - A schedule of enforcement

18. The REDA and the HKIA considered that the Administration should set up a schedule of enforcement which should be made known to all affected owners and tenants following the enactment of the Bill. The Chairman held similar views. He considered that the Administration should publish the names of those premises to be affected by the legislation. However, Mrs Selina CHOW considered it unfair to do so if the owners/tenants concerned had not been provided with an opportunity to rectify the situation.

19. In view of the limited time available, the Chairman remarked that this subject would be discussed at subsequent meetings.

IV. Date of Next Meeting

20. The next meeting would be held on Monday, 4 November 1996 at 4:30 p.m. in Conference Room B of the Legislative Council Building.

V. Close of Meeting

21. The meeting ended at 10:05 a.m.
LegCo Secretariat
21 November 1996

*-- other commitments

Last Updated on 14 December 1998