LegCo Paper No. CB(1) 59/96-97
(These minutes have been seen by the Administration)
Ref : CB1/PL/HG/1

LegCo Panel on Housing

Minutes of Meeting held
on Tuesday, 7 May 1996 at 2:30 pm
in the Chamber of the Legislative Council Building

Members present :

    Hon LEE Wing-tat (Chairman)
    Hon Frederick FUNG Kin-kee (Deputy Chairman)
    Hon Mrs Selina CHOW, OBE, JP
    Hon SZETO Wah
    Hon Edward S T HO, OBE, JP
    Hon Albert CHAN Wai-yip
    Hon CHEUNG Man-kwong
    Hon Fred LI Wah-ming
    Hon James TO Kun-sun
    Hon Zachary WONG Wai-yin
    Hon CHAN Kam-lam
    Hon CHAN Yuen-han
    Hon Andrew CHENG Kar-foo
    Hon CHEUNG Hon-chung
    Hon CHOY Kan-pui, JP
    Hon Albert HO Chun-yan
    Hon LEUNG Yiu-chung
    Hon Bruce LIU Sing-lee
    Hon SIN Chung-kai

Members absent :

    Hon Ronald ARCULLI, OBE, JP
    Dr Hon YEUNG Sum
    Hon LO Suk-ching
    Hon MOK Ying-fan

Public officers Attending :

For all Items
Mr Andrew R Wells
Deputy Secretary for Housing

For Items III & V
Mr CHAN Yui-loon
Senior Assistant Director/Housing Administration

For Item III
Mr TONG Wing-shing
Assistant Director/Maintenance
Mr FUNG Ho-tong
Assistant Director/Regional Management 1

For Item IV
Mr Trevor Keen
Principal Assistant Secretary
Planning, Environment and Lands Branch
Mr D O Kitchell
Deputy Principal Solicitor
Land Registry
Mr David Holloway
Senior Superintendent, Commercial Crime Bureau
Royal Hong Kong Police Force
Mr H P CHUNG
Senior Superintendent, Commercial Crime Bureau
Royal Hong Kong Police Force

Attendance by Invitation :

For Item IV
From the Law Society of Hong Kong
Mr Christopher CHAN
Vice President
Mr Vincent LIANG
Council Member
Mr Patrick Moss
Secretary General

Clerk in attendance :

Mrs Vivian KAM
Chief Assistant Secretary (1)2

Staff in attendance :

Miss Becky YU
Senior Assistant Secretary (1)3

I. Confirmation of Minutes of Previous Meetings

(LegCo Papers Nos. CB(1) 1311 and 1312/95-96)

The minutes of the meetings held on 5 and 16 February 1996 were confirmed.

II. Date of Next Meeting and Items for Discussion

(Appendix I to LegCo Paper No. CB(1) 1337/95-96)

2. The Chairman informed members that following the special meeting on 23 April 1996 on the Assessment on Housing Needs, the Administration had proposed to conduct a second briefing on the Aims and Achievements of the 1987 Long Term Housing Strategy (LTHS) Review. Members agreed to hold the briefing on Monday, 27 May 1996 at 4:30 pm.

3. In view of the imminent release of the consultation paper on the LTHS, the Chairman suggested setting up a working group under the Panel to be responsible for assigning research projects relating to the subject matter to the LegCo Research and Library Services Division in order to facilitate future discussion on the LTHS.

(Post-meeting note: Membership for the working group had been called for vide LegCo Paper No. CB(1) 1456/95-96; the working group was subsequently renamed as a subcommittee.)

4. The next regular meeting would be held on Monday, 3 June 1996, at 10:45 am to discuss the following items:

    - Eligibility Criteria for the Rental Assistance Scheme;

    - Follow-up on the Review on Overcrowding Relief in Public Housing Estates; and

    - Operation of the Hong Kong Housing Society (HKHS).

On the last item, Hon CHAN Wai-yip undertook to prepare a list of concerns on the operation of the HKHS for members’ reference. Members also agreed to discuss the Review of the Comprehensive Redevelopment Programme at the Panel meeting in July 1996.

III. Management and Maintenance of Public Housing Estates

Estate Management

(Appendix II to LegCo Paper No. CB(1) 1337/95-96)

5. Members sought elaboration on maintenance and improvements works which had been let out to consultants in the 1995/96 fiscal year, and on the Condition, Appraisal, Repair and Examination (CARE) programme referred to in paragraph 6 of the information paper. They also enquired about the possibility of linking the Maintenance Information System (MIS) with the CARE programme. Mr TONG Wing-shing informed that at the Housing Authority meeting in March 1996, a new and more customer-oriented approach to the CARE programme was endorsed to enhance maintenance services. The enhanced CARE programme had been implemented in 25 selected Public Rental Housing (PRH) estates where major maintenance works were required. Respective Mutual Aid Committees would be notified of the maintenance programmes in advance and a brochure outlining the works involved would be distributed to tenants concerned. Before commencement of the work processes, a number of sampled households would be selected to demonstrate the results of the improvement works. A hotline would also be installed during the programme period both to receive complaints and arrange for appointments for tenants. The performance of contractors would be assessed through satisfaction surveys to be conducted with tenants. Contractors with satisfactory performance would be encouraged to make further proposals to enhance service quality, and such proposals would be included in future maintenance contracts.

6. As regards the MIS, Mr TONG explained that this was designed to handle small scale maintenance works. Under the system, requests for repair would pass through maintenance control where a maintenance record would be completed and acknowledged by the Customer Service Assistant (CSA) in each estate office. Appointments would be arranged by the CSA with the respective contractor through the MIS. Under such arrangements, the Housing Department (HD) would be able to monitor the work progress of contractors and answer any queries on the work status instantly. Since the introduction of the system, significant improvement had been made on the day-to-day maintenance service.

Contracting Out of Management of Public Housing Estates

(Appendix III to LegCo Paper No. CB(1) 1337/95-96)

7. Mr Andrew R Wells emphasized that the objective of the privatization scheme was to improve the quality of management in PRH estates as pledged in the 1995 Policy Commitments. Mr CHAN Yui-loon supplemented that the use of property management agents (PMAs) in Home Ownership Scheme (HOS) estates had proved to be effective in achieving the aims of providing better quality services and achieving economy. According to a recent survey conducted by the HD, the residents’ satisfaction rate at agency-managed HOS estates was as high as 63%. The direct management costs of these estates were lower than those managed by the HD; this being attributed mainly to the greater flexibility in staff deployment, professional knowledge and technical knowhow, simpler command structure and lower staff on-costs of PMAs. The contracting out of management of PRH estates in areas such as cleansing and security had made possible a savings of $81 million per month and 15,000 posts over the years. A pilot scheme to contract out the management of selected rental estates had been launched in Ming Tak, Hing Tung and Ping Tin Estates since early 1996 and the response of residents as well as estate managers had so far been satisfactory. The total savings of contracting out was estimated to be over $10 million. Mr CHAN added that the scheme would be closely monitored and reviewed upon completion of the trial period taking into account the performance of PMAs, cost-effectiveness, acceptability of tenants and feedback from estate staff, etc. Subject to the outcome of the review, the use of agency managements would be extended to all new PRH estates.

8. Members expressed concern over the impact of privatization on the 1,700 estate caretaking staff in PRH estates, in particular on technicians and workers, if the scheme were to be extended to newly redeveloped estates. They sought clarification on the reaction of staff unions concerned and considered a need for a comprehensive plan to assist staff in coping with the change through re-training, re-deployment to other departments or employment with the PMAs. Mr CHAN clarified that full-scale implementation of the scheme to cover all new estates might not be possible since PMAs concerned might not have the capacity to absorb all duties currently undertaken by the HD. As regards the response of the unions on the scheme, Mr CHAN acknowledged that with the appointment of the PMAs, the role of estate staff would change from direct management to monitoring of performance and enforcement of regulations. While the Administration intended to phase out the extra manpower through natural wastage, Mr CHAN emphasized that no estate staff would be rendered jobless in the course of privatization and that the concern of staff would be of paramount concern when the scheme was evaluated. Respective Estate Assistant staff unions had been informed repeatedly of the Administration’s stance and of these, three unions had expressed their concern about the scheme. Mr CHAN added that experts from Singapore would be invited to share their experience at the next housing conference on privatization, and members who were interested were invited to attend.

9. On members’ questions concerning the evaluation criteria for PMAs under the pilot scheme and for other contractors in PRH estates, Mr CHAN advised that each PMA was required to submit a weekly management report to the HD for monitoring purpose. Regard to the experience in HOS estates and consultation with the Estate Management Advisory Committees (EMACs) would also be made when the scheme was evaluated. On the role of EMACs, Mr CHAN advised that these served as advisory bodies to the HD on estate management. Contractors with unsatisfactory performance would be liable for such penalties as fines, suspension of contract or dismissal.

10. Some members were worried that tenants in agency-managed estates would have to pay a rent higher than those in HD-managed estates as in the case of privatized carparks in PRH estates. To address the problem, members considered a need to separate the management fee from the rent. Mr CHAN clarified that management fees paid to contractors had no bearings on the level of rent since these would be borne by the HD. He emphasized that tenants’ affordability as well as comparable estate value would remain the most important factors for consideration when determining the level of rent. As regards the feasibility for the HD to resume management of all PRH estates using the customer-oriented approach adopted by the PMAs, Mr CHAN advised that the advantages of agency management had been substantiated by proven examples of better economy and quality services. Moreover, the PMAs enjoyed greater flexibility in staff deployment over the HD. Mr Wells emphasized that apart from savings in costs, the objective of contracting out was also in raising management quality. Furthermore, contracting out was only one means of improving the service quality of estate management, and there were other measures which were under consideration.

Installation of Security Facilities in Public Housing Estates

(Appendix IV to LegCo Paper No. CB(1) 1337/95-96)

11. Members enquired about the duties of security guards in PRH estates and whether log books were used to record the activities of visitors. They also enquired about those estates which had been included in the respective phases of the three-year security improvement programme. Mr FUNG Ho-tong advised that the full duties of security guards had been spelt out in the security service contracts and undertook to provide related job descriptions for members’ reference. As regards the use of log books, Mr FUNG undertook to consider members’ view but advised that the security controls in PRH estates already kept records of visitors, albeit not in as much detail as a log book.

HD

(Post-meeting note: A duty list of the tower guard in the security service contract is at the Appendix.)

IV. Fraud Cases Involving the Sale of Properties

Meeting with the Administration

(Appendix V to LegCo Paper No. CB(1) 1337/95-96)

12. At the invitation of the Chairman, Mr Trevor Keen informed members that 13 cases of property fraud had so far come to the attention of the police over the last five years. Of these, three were reported this year. Although the figure was relatively small when compared with almost 750,000 property transactions over the period, the police had stepped up publicity efforts to arouse public awareness of property fraud and the methods commonly used. Presentations on details of property fraud, in particular the use of forged Hong Kong Identity (HKID) cards, had been given to both the Law Society of Hong Kong (LSHK) and the Hong Kong Association of Banks (HKAB) to alert them to the nature of fraud. Mr Keen added that there had not been any recurrence of fraud cases since the stepping up of precautionary measures.

13. In response to members, Mr H P CHUNG advised that all the 13 reported fraud cases involved the use of forged HKID cards. Culprits in five cases obtained initial deposits from the prospective purchasers and absconded; seven applied for a re-mortgage loan from other financial institutions; and one succeeded in adding a false name to the list of directors of a company and subsequently obtained a re-mortgage loan from a financial institution. On members’ request for an information paper on these cases, Mr David Holloway advised that this might not be possible due to subjudice as some of these cases were still under investigation. On the verification of HKID cards, Mr Holloway advised that in general the authenticity of HKID cards could be checked using the telephone hotline of the Immigration Department (Imm D). However, it might take an expert to distinguish a forged HKID card if this was of excellent quality. Guidance on how to recognize forged HKID cards had been issued to the LSHK and the HKAB. Members considered it unreasonable to pass on to members of the LSHK and the HKAB responsibilities which required the knowledge of an expert. In response, Mr Holloway emphasized that assistance from the police or the Imm D was always available in case of doubt.

14. Some members considered that other identification documents apart from HKID cards should be used in property transactions to avoid possible property fraud. They enquired whether the police had detected any loopholes in the 13 fraud cases. Mr CHUNG advised that while the police was not aware of any loopholes in the existing legislation and legal procedures which enabled a person to impersonate a property owner or mastermind a fraud on the assignment of properties, they would examine ways to prevent the recurrence of similar fraud cases.

RHKPF

15. A member suggested the following additional measures:

  1. under the codes of practice in relation to the Personal Data (Privacy) Ordinance whereby persons could apply to the Government including the Imm D for release of personal data, a vendor/purchaser could request the solicitor representing himself/herself or the other party to obtain relevant data from the Imm D for verification purpose; and
  2. banking institutions should advise purchasers to exercise more care in property transactions and the Administration should request banking institutions to observe strictly the need for verification of data, particularly in cases of redemption of mortgages.

The Chairman requested the Administration to follow-up on the members’ proposal.

Adm

Meeting with the Law Society of Hong Kong

16. At the invitation of the Chairman, Mr Vincent LIANG informed members that the checking of HKID cards in property transactions was initiated in the wake of a property fraud case in 1965. The LSHK had subsequently issued circulars in 1966 and 1990 to remind its members of the need to enforce such a requirement. Since the recent recurrence of property fraud, the LSHK had been examining the feasibility of a number of precautionary measures which included: requiring additional identification documents apart from HKID cards such as passports from new clients; requesting property agencies to withhold the initial deposits to property owners until all the original title deeds had been produced and verified; and briefing by the police on how to differentiate forged HKID cards. Financial institutions would also be reminded to release the original title deeds upon production of valid identification documents, and to obtain the authorization from serving directors of a company in the event an application for re-mortgage loan was received from a new director. Mr LIANG emphasized that these measures were still under discussion with relevant property agency associations and financial institutions and a final decision had yet to be reached.

Clerk

17. Members felt that there was insufficient control under the Companies Registry on the changing of directorship of a company and considered a need to refer the subject to the LegCo Panel on Financial Affairs for necessary follow-up. Members also enquired whether lawyers could be held liable in the event of failure to check the authenticity of identification documents. Mr Keen advised that customers concerned could take civil proceedings against the lawyers for negligence. Mr LIANG supplemented that the judgement of a pending related court case would serve as a useful future reference in this respect. On the possibility of an insurance scheme to protect the loss of customers in property fraud, Mr LIANG undertook to consider members’ views. At members’ request, Mr LIANG agreed to provide a copy of the proposal after it had been finalized.

LSHK

18. Members generally supported the proposals of the LSHK to combat property fraud but considered that concerted efforts from all parties concerned including the HKAB and the Administration was necessary to prevent the recurrence of similar property fraud. In addition, financial institutions should be more prudent in ascertaining the ownership of properties for disposal.

V. Consultation Paper on Safeguarding Rational Allocation of Public Housing Resources - Income and Asset Assessments

(Appendix VI to LegCo Paper No. CB(1) 1337/95-96)

19. Mr Wells informed members that the Ad Hoc Committee on Private Domestic Property Ownership by Public Rental Housing Tenants had examined the views of the Legislative Council and public opinions expressed during the consultation exercise on "Safeguarding Rational Allocation of Public Housing Resources" and had made a number of modifications to its original recommendations in respect of the requirement of asset declaration. These recommendations had been endorsed by the Housing Authority for submission to the Executive Council for approval shortly.

20. Members urged the Administration to include in the submission details of the LegCo Motion Debate as well as public opinions collated.

21. There being no other business, the meeting closed at 4:40 pm.

Legislative Council Secretariat
7 October 1996

Last Updated on 20 Aug, 1998