Hong Kong mulls legislation to extend land leases by 50 years without owner execution
Hong Kong Free Press
The Development Bureau has suggested legislation to allow the government to extend expiring general purpose land leases for 50 years under a new statutory mechanism that will not require execution by the owners, according to a paper submitted to the Legislative Council.
By law, all land owners in Hong Kong – aside from the owners of Central’s St John’s Church – lease the land from the government. Under the current policy, the Land Department (LandsD) has to execute a new land lease with owners, if an extension is required. However, hundreds of thousands of leases are set to expire in, or before, 2047.
Prior to the execution of any extension, owners have to produce proof of titles to demonstrate that they are the true leaseholder. They also need to declare liabilities, like undischarged mortgages, under the renewed land lease. Key conditions of the original lease are maintained, whilst the LandsD may add new standard clauses for the owners to consider.
For land with multiple owners, such as multi-storey residential buildings, the government will first grant the new lease to the Financial Secretary Incorporated (FSI) company, before assigning the undivided shares of the individual properties to the original owners. The procedure means individuals owners are protected, if others do not extend the lease.
Thousands of lots to expire
Between June 2025 and June 29, 2047, there will be 2,400 general purpose leases expiring. On June 30, 2047, around 300,000 such lots will expire simultaneously.
“[S]uch arrangement of executing the land lease with each and every owner is a cumbersome process… With many of such leases being multi-owned and involving a vast number of owners, it would be infeasible to follow the conventional mechanism to conduct title checking and execute the new land lease with each and every owner,” the bureau said in the paper.
Gazette notices
Under the new plan, the government will declare and effect the extension of land leases by publishing gazette notices without requiring the owners to sign a new land lease.
Regarding the format of publication, the government plans to adopt a “negative listing” approach, which means only land leases which will not be extended shall be publicised. The gazette notice will be published three years before an expiry date. In other words, if the land leases are not listed until the expiry date, they will have been extended. Owners can also opt-out from lease extensions.
Under the new mechanism, liabilities and rights under the original lease will be carried forward automatically. The government proposes preserving the conditions of the original leases as well as incorporating additional clauses that are confined to the most essential terms concerning enforcement rights of the government.
Currently, such clauses allow the government to inspect lots for any lack of compliance with lease conditions, allowing them to re-enter the lot if there are serious lease breaches. It also requires that owners comply with the ordinance and agree to allow the authorities to take enforcement action in cases of non-compliance.
Land leases extended under the new mechanism will be extended for a term of 50 years, without the payment of any additional premium. However, an annual rent equivalent to three per cent of the rateable value of the property will be charged – similar to current policies.
The bill will be introduced into the Legislative Council in the second half of this year.
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