Reply to questions raised by the Democratic Party

Before the owners of an Home Ownership Scheme (HOS) estate set up its owners' corporation, the Housing Authority (HA) will exercise the powers and duties conferred to it according to the deed of mutual covenant of the estate and supervise the performance of the property management agents (PMAs) on behalf of the owners. The HA will collect from the owners the expense incurred, which is known as the supervision cost.

2. The supervision cost levied covers the recurrent operating costs of Housing Department (HD) staff's daily work in estate management and administration, such as attending meetings, supervision, assigning contracts, repairs and maintenance, litigation, auditing and fixing management fees.

3. While HA collects the supervision cost which is based on the staff establishment of the HD, the PMAs collect remuneration for their management work as well as fees to cover their administration cost. As the HA and the PMAs are different in terms of establishment, system and functions, a direct comparison of their remuneration can hardly be drawn.

4. As early as before 1997, HD has been improving its productivity through business process re-engineering, management reforms and the adoption of the customer-oriented principle. As far as the supervision cost is concerned, HD has successfully maintained this year's (1998/99) cost at last year's level of $30.30. Subject to the approval of the HA Home Ownership Committee, the cost for the next year (1999/2000) will be frozen at the same level.

5. It has always been HA's policy to encourage HOS flat owners to set up owners' corporations and take up the management of their properties so that the supervision cost charged by the HA can be saved.

Reply to questions raised by Hon Albert HO Chun-yan

6. As mentioned earlier, if there is no owners' corporation in an HOS estate, the HA will exercise the powers and duties conferred to it according to the deed of mutual covenant of the estate and supervise the performance of the property management agents on behalf of the owners. HA will be held ultimately responsible for the management of an estate until an owners' corporation has been set up. There is, therefore, no existing mechanism under which residents of HOS estates can discharge the HA from carrying out its supervisory duties. If the residents have set up their owners' corporation, they can act as a body corporate in accordance with the Building Management Ordinance and, with the consent of more than 50% of the undivided share of the owners, discharge the HA from being the estate manager and take up the management of their properties.


Housing Department
January 1999