Members present :

Hon LEE Wing-tat (Chairman)
Hon Edward HO Sing-tin, JP
Hon LEE Cheuk-yan
Hon Fred LI Wah-ming
Hon NG Leung-sing
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon James TO Kun-sun
Hon CHAN Yuen-han
Hon CHAN Kam-lam
Hon LEUNG Yiu-chung
Dr Hon YEUNG Sum
Hon LAU Kong-wah
Hon Andrew CHENG Kar-foo
Hon Timothy FOK Tsun-ting, JP

Members absent :

Hon Gary CHENG Kai-nam (Deputy Chairman)
Hon David CHU Yu-lin
Hon HO Sai-chu, JP
Hon Albert HO Chun-yan
Hon Ronald ARCULLI, JP
Hon Andrew WONG Wang-fat, JP
Hon SZETO Wah
Hon TAM Yiu-chung, JP

Public officers attending :

For item IV

Housing Bureau

Miss Sandy CHAN, Principal Assistant Secretary (2)

Housing Department

Mr Chris GABRIEL, Chief Architect/Design & Standard

Buildings Department

Mr K M MO, Assistant Director/Development

For item V

Housing Bureau

Ms Eva TO, Principal Assistant Secretary (1)

For item VI

Housing Bureau

Mr C M LEUNG, JP, Deputy Secretary for Housing (1)

Ms Eva TO, Principal Assistant Secretary (1)

Attendance by invitation :

For item V

Estate Agents Authority

Mrs Grace CHOW, Chief Executive Officer
Ms Ariel YEUNG, Legal Advisor
Mr Tommy CHO, Manager
Mr Frank LI, Manager

Clerk in attendance :

Ms LEUNG Siu-kum, Chief Assistant Secretary (1)2

Staff in attendance :

Miss Becky YU, Senior Assistant Secretary (1)3

I Confirmation of minutes of previous meetings
(LC Paper Nos. CB(1) 1415 and 1416/98-99)

The minutes of the meetings held on 1 March and 19 April 1999 were confirmed.

II Information paper issued since last meeting

2. Members noted that the following information papers had been issued since last meeting:

III Date of next meeting and items for discussion

3. Members agreed that the subjects of "Sandwich Class Housing Scheme" and "Bedspace apartments" be discussed at the next regular meeting on Monday, 5 July 1999, at 4:30 pm.

4. Members also agreed to hold a special meeting on Monday, 12 July 1999, at 4:30 pm to discuss the following issues:

- Use of recreational areas for construction of public housing blocks;

- Affordability of tenants in public rental housing estates; and

- Cessation of "tenants to pay repair services" scheme provided by the Housing Department.

IV Removal of fixtures in Home Ownership Scheme flats
(LC Paper No. CB(1) 1421/98-99(01) and (02))

5. Mr Fred LI noted that many owners of Home Ownership Scheme (HOS) flats had demolished fixtures such as metal gates, bathtubs, wash basins, wall tiles and flooring provided by the Housing Authority (HA) before moving into the new flats. He expressed concern about the wastage and environment problem caused by the removal of such fixtures. Messrs CHAN Kam-lam and LEUNG Yiu-chung held the view that owners demolished their fixtures because they were not satisfied with the design and quality of fittings provided by HA. Mr LEUNG urged HA to consult HOS owners with a view to improving the flat design to meet their varied expectations and to minimize the wastage as a result of the demolition.

6. The Chief Architect/Design & Standard (CA/D&S) explained that at present, there were three types of HOS design, namely, Concord Blocks, New Cruciform Block and Harmony Block, offering different standards of finishes and fittings to suit customers' needs. He agreed that consultation was necessary. He advised that opinion surveys had been conducted regularly to determine the customers' expectation and changes such as layout of bathrooms and kitchens had been made in the light of the survey findings. Apart from opinion surveys, mock up flats in respect of new designs and major changes to standard designs had been provided by HA in the past ten years to facilitate public consultation before the respective designs were endorsed by the Building Committee of HA. The final designs of the new fully-fitted Concord Blocks reflecting the public views collected during the consultation conducted in 1995 was a case in point. Further opinion surveys on the satisfaction level of the Concord Blocks would be conducted after in-take of the two blocks in Tin Shui Wai in October 1999. CA/D&S added that consideration was being given to assign a venue close to HA's Headquarters for displaying mock up flats to facilitate public consultation.

7. As to whether HA had compared the seriousness of demolition problem in new private flats with that in HOS flats, CA/D&S considered a direct comparison between the two types of flats inappropriate having regard to their distinct differences in size of developments and sale strategies. He stressed that the size of HOS developments was much larger than that of any private development. Moreover, private flats usually had a longer sale period where problem of wastage resulting from demolition of fixtures was not noticeable.

8. To minimize possible wastage, Mr LI opined that HA should consider providing just a basic shell for HOS flats with only essential fittings to comply with the statutory requirements. The provision of basic shell could also help reduce the sale prices of HOS flats. CA/D&S advised that although HA was exempt from the statutory requirements of the Building Ordinance, including the provisions of wash basins and floor tiles in kitchens as well as toilets and bathtubs/sprinklers in bathrooms, this exemption did not apply to flats for sale and HA did not intend to provide sub-standard buildings. The exact range of fittings to be provided in a basic shell to comply with the regulation had to be considered carefully, since HA had to consider the public acceptability of such a scheme and that there was also a large proportion of HOS purchasers who did not make major alterations to their flats. Mr CHAN also expressed reservations at the "Basic Shell" concept since many HOS buyers would prefer to move into the flats as soon as possible without spending too much time and money on decoration.

9. Given that 3,000 out of 4,000 owners of Hiu Lai Court had discarded the original metal gates, toilets and bathtubs before occupation, Mr LI remained of the view that HA should seriously consider the "Basic Shell" concept with a view to minimizing wastage. CA/D&S replied that HA was aware that many HOS owners, in particular those of Harmony Blocks, had removed their original metal gates. Proposals on the provision of metal gates in Harmony Blocks would therefore be submitted to the Rental Housing Committee for consideration in due course. As regards the metal gates in Concord Blocks, CA/D&S advised that these were made of stainless steel and more compatible with those in the private sector. Nevertheless, HA would review the need for the metal gates in the context of the satisfaction survey on Concord Blocks in October 1999.

10. Noting that buyers of HOS Phase 19C were given the option to choose colours of cabinets and worktops in kitchens and bathrooms, Mrs Selina CHOW asked if the same option could be offered to allow buyers to choose whether or not their flats should be provided with fittings. CA/D&S advised that although it was HA's intention to provide wider choice to HOS buyers, the proposal put forward by Mrs CHOW would inevitably affect the construction and sales programmes of HOS. He pointed out that if options were to be offered to buyers, HA would have to review the pre-sale period for HOS flats from the current 18 months to 24 months before completion in order to facilitate buyers to exercise their options at an early stage and to allow sufficient time for the building contractors to achieve the completion targets. The Chairman could not accept the requirement of such a long pre-sale period. He considered that a pre-sale period of 12 months was more reasonable. Mrs CHOW remarked that the pre-sale period could be reduced if arrangement could be made for the buyers to exercise their choice at an appropriate time.

Admin 11. Mrs CHOW and Mr LEUNG Yiu-chung opined that HA should conduct a comprehensive review to ascertain the reasons of the owners for demolishing original fixtures in new HOS flats in order to devise mitigation measures or systemic changes, if necessary, to reduce wastage. To follow-up the issue, the Chairman requested that half-yearly reporting on the problem of demolition of fixtures should be provided after the in-take of the Concord Blocks.

V Work plan for the Estate Agents Authority
(LC Paper NO. CB(1) 1421/98-99(03))

12. Dr YEUNG Sum expressed concern about the delay in the implementation of both the proposed Practice Regulation and the proposed Determination Regulation until November 1999. He asked whether relief measures were in place to protect consumer interest during the interim period. In reply, the Principal Assistant Secretary for Housing (1) (PAS for H (1)) attributed the deferment of the implementation date to the time required for drafting the complicated Practice Regulation. Nevertheless, the Administration had tabled both Regulations at the Legislative Council in end May 1999. In order to allow sufficient time for the Estate Agents Authority (EAA) to promote public awareness of the Regulations and for the trade to adapt to the new practices after they were passed by the Legislature, the Administration decided to defer the implementation of the Regulations to November 1999. On relief measures, the Chief Executive Officer/EAA (CEO/EAA) advised that most of the complaint cases received by EAA were about commission disputes. As the financial jurisdictional limit of the Small Claims Tribunal had been proposed to increase up to $50,000, it could provide an avenue through which disputes over commission could be resolved after the relevant Bill was enacted.

13. On provision of property information, PAS for H (1) advised that under the proposed Practice Regulation, estate agents would be required to furnish prospective purchasers with a prescribed property information form which contained particulars of current ownership and subsisting encumbrances, saleable floor area, year of completion, user restrictions, unexpired term of lease and right of renewal as well as lease term of properties. The required information could be obtained expeditiously through the following channels:

- the Land Registry (LR) where particulars of current ownership, subsisting encumbrances, year of completion and user restrictions in the occupation permit (OP) could be obtained. Estate agents could conduct searches at LR in person or subscribe to the Direct Access Service in order to have access to the land register through electronic means in their offices. Other searching services such as bulk-request counter, all-service counter and self-service terminals for placing orders were also available;

- the Rating and Valuation Department (RVD) where quick reference on saleable area and age of properties could be obtained through a new 24-hour Info-Hotline Service. A compact disc of rates account numbers of all properties under the Info-Hotline System was being prepared and would be sold to estate agents at cost to facilitate retrieval of information; and

- the Buildings Department (BD) where certified copies of OP could be obtained. The retrieval time for OP had recently been reduced from 14 to about three days after BD had streamlined its information access system.

14. Mr Andrew CHENG recalled that when the Estate Agents Bill was examined by the then Bills Committee, the Administration was requested to set up a centralized databank for all properties in Hong Kong. He enquired about the progress of such a databank. PAS for H (1) replied that although the setting up of a territory-wide databank was worth pursuing, it would take a long period of preparatory time as it would involve manipulation of a huge volume of land and building data as well as extensive integration of incompatible data now stored in different forms in different departments. Given that the Administration had already taken steps to facilitate the accessibility to property information from various sources, PAS for H (1) held the view that there was no need to defer the implementation of a regulatory system for estate agents until the setting up of the centralized property databank. Mr CHENG was not convinced of the Administration's explanation. He pointed out that estate agents would have to conduct searches at different departments in the absence of a centralized property databank. Mrs Selina CHOW however took a different view. She remarked that with the advancement in technology to facilitate accessibility to property information, the lack of a central databank should not pose a significant problem.

15. As to why information on unauthorized building works (UBWs) within properties, which was one of the major concerns of the then Bills Committee on Estate Agents Bill, was not included in the prescribed information, PAS for H (1) clarified that estate agents were not required to check building plans to identify UBWs under the Estate Agents Ordinance (the Ordinance) since interpretation of technical documents and plans to ascertain the presence of UBWs was beyond the knowledge and expertise of estate agents. In order to reduce possible disputes arising from UBWs, under section 36 of the Ordinance, vendors were required to provide a statement on any structural alterations, additions, repairs or improvements of the property within his knowledge at an early stage of property transaction. The Chairman however opined that the vendor statement might arouse disputes between estate agents and prospective purchasers. As a member of the Subcommittee on Estate Agents Practice (General Duties and Hong Kong Residential Properties) Regulation and Estate Agents (Determination of Commission Disputes) Regulation, Mr Edward HO said that the Subcommittee was also doubtful about the effectiveness of the vendor statement since vendors concerned could choose not to disclose the required information in order to avoid any responsibility of false declaration. PAS for H (1) responded that buyers would become more cautious about whether or not they should proceed the property transaction if vendors refused to disclose the information. Members were not satisfied with the Administration's explanation. They considered that there was a need for the Subcommittee to follow up the issue.

16. On the cost for obtaining the prescribed types of information, PAS for H (1) advised that LR would charge $15 for each search regarding particulars of current ownership, subsisting encumbrances and right of renewal and $30 for past information. Downloading of information on saleable floor area and age of properties from the Info-Hotline Service of RVD using a fax machine would cost about $20. Although BD would charge $190 for each certified copy of OP, it should be noted that OPs were issued for the whole development or building and thus there was no need for estate agents to obtain OP for each and every property unit within the same development or building.

17. On handling of complaints, the Chairman expressed concern over the high number of 351 complaints received by EAA during the period from January 1999 to May 1999. He opined that EAA should analyze the causes of these complaints and introduce mitigation measures to reduce them. Otherwise, tremendous resources would have to be deployed to handle complaints. CEO/EAA replied that EAA was equally concerned about the high number of complaints which was anticipated to surge further after the passage of the proposed Regulations. She also agreed to the need to find out the causes of complaints. According to EAA's analysis, the 351 complaint cases could be broadly classified under the categories of commission disputes, misrepresentation, poor standard of service and breach of the Estate Agents Ordinance and related regulations. Of the 166 concluded complaint cases, penalties ranging from the issue of warning letters, admonition, reprimand to fines had been imposed as appropriate. Letters of advice had also been issued for non-established cases with a view to avoiding recurrence of similar incidents.

18. On publicity and community education, CEO/EAA took note of Dr YEUNG Sum's view on the need to promote greater public awareness of the Ordinance and its benefits to the consumers. She advised that EAA had regularly disseminated these messages through EAA's newsletters, pamphlets for distribution at service centres of various utility companies, posters, handbooks, radio and television Announcement in the Public Interest as well as feature articles in newspapers and magazines. As a step forward, a new Resource Centre located at the same premises of EAA would be open in July 1999. It would be a one-stop service centre for trade practitioners and consumers and would maintain a collection of publications on the estate agency trade, a computerized licence register for public inspection and other relevant materials/documents in electronic format for public access. There would also be materials for members of the trade to facilitate self-learning. The centre would be operated by EAA staff who would answer questions on estate agency practice from both the trade and the community.

19. As regards the EAA Outreach Team, CEO/EAA advised that it consisted of trained EAA staff tasked to promote new regulations, answer questions pertaining to property agency and transaction and facilitate public access to information relating to the new regulatory system. They would take turn to visit all the District Offices (DOs) and the advisory centres of the Consumer Council (CC). Mr CHENG Kai-nam opined that EAA should also consider deploying a member of the Outreach Team to station in every DO and advisory centre of CC to facilitate enquiries from the trade and the public.

VI Housing Managers Registration Bill
(LC Paper No. CB(1) 1232/98-99)

20. At the invitation of the Chairman, the Deputy Secretary for Housing (1) (DS for H (1)) briefed members on the Housing Managers Registration Bill. He said that the Bill provided for the registration and disciplinary control of professional housing managers. It aimed to assure the public that those who claimed to be qualified professionals had indeed received proper training and obtained relevant qualifications. The proposed registration system would serve to enhance and maintain professional standards as well as to ensure self-regulation by the profession.

21. While the majority of members were in support of the Bill as this would help promote better property management and raise the professional standards and performance of housing managers, Mr Fred LI expressed reservations at the effectiveness of the proposed registration system. He pointed out that unlike social workers who had to be registered before practising, housing managers were not required to be registered in order to undertake property management work. DS for H (1) advised that reference had been made to similar legislation for other professions, including that for social workers, in drawing up the Bill. The objective of the Bill was to control the use of the title of "registered professional housing managers" instead of preventing persons who were not registered from entering the trade. He cautioned about the adverse impact on employment of housing managers if registration was made mandatory for employment. Mr Edward HO remarked that the proposed registration system was consistent with that in other professions such as engineers, architects and surveyors. The intention was to enhance the professional standards of housing managers without creating an entry barrier for new entrants.

22. On the structure of the registration board for "registered professional housing managers", DS for H (1) advised that it would be modelled after that of the Hong Kong Institute of Architects. The registration system would be funded solely by the Hong Kong Institute of Housing and would not incur public resources.

23. Dr YEUNG Sum asked if the Administration would require the mandatory formation of Owners' Incorporations (OIs) with a view to enhancing better building management. DS for H (1) said that he was not in a position to comment on the subject as this fell under the purview of the Home Affairs Bureau. He nevertheless assured members that the Housing Bureau would continue to encourage owners of subsidized home ownership flats to establish OIs to take care of the management of their own properties.

VII Any other business

Draft report of the Panel for submission to the Council
(LC Paper No. CB(1) 1421/98-99(04))

24. Members took note of the draft report of the Panel which would be tabled at the Council meeting on 30 June 1999 in accordance with Rule 77(14) of the Rules of Procedure. They also authorized the Clerk to make necessary modifications to the report taking into account issues discussed at the current meeting.

25. There being no other business, the meeting ended at 6:40 pm.

Legislative Council Secretariat
28 September 1999