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Posts Tagged ‘kimberly road’

Lowering compulsory sale threshold from 90% to 80%

Thursday, April 1st, 2010

Coming into effect today (1st April, 2010) is the new legislation that allows developers to force small owners to sell their flats within a building after it has acquired 80 per cent of the property interests in the building. This affects residential buildings older than 50 years.

Carrie Lam (林鄭月娥) mentioned on the radio the day before Legco voted on the notion saying that this new law was in the interest of the Hong Kong public and revitalisation of Hong Kong but in reality the law lowers the leverage and bargaining power of small flat owners agains developers.

A seven-storey tenement block on Kimberley Road, Tsim Sha Tsui (55 years old) along with three neighbouring blocks, has been an acquisition target. Richfield Realty which is helping Henderson Land to acquire this block stopped negotiating with one of the owners since January because they suspected that the law to lower the threshold would be passed and said the owner that they will talk contact him again in April.  Now the owner is worried that the developer will offer him an even lower offer than the one he had rejected before.

The original offer made by Richfield was ~HK$ 4 million or HK$ 5,700 /sq.ft. for the owner’s 700 sq. ft. flat which measures 1,200 sq. ft. if his share of common areas is included. A new flat developed in same spot would sell for ~3 times that; so effectively once the owner is compelled to sell he would need to move elsewhere.

A similar incident happened to an owner (Victor Sin Ho-yuen) who had a shop on Haven Street (希雲街) , in causeway bay who had to sell his shop on ground floor for ~HK$ 2 million. The court case cost him HK$ 4 million in legal fees. He laments that he would probably lose his second shop too in a similar way. Sin said that the supplementary measures and the mediation system were useless, because the developed showed no intention to mediate last time.

It is appalling that this is happening in Hong Kong. Individual rights are being eroded and it is sad to see Hong Kong heading down this route.

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