Illegal Structures in Hong Kong - Research Paper Example

Introduction The Building Ordinance requires that prior ization of the building department is mandatory for all construction works unless the works are exempted by the Ordinance. Nevertheless, several buildings in Hong Kong have illegal structures which pose fire and structural safety risks. These unauthorized structures also have implications on the title of the property. Economic incentive for the construction of illegal structures The need to construct illegal structures to enhance facilities in private property in urban areas is mainly brought about by the mismatch between the actual needs and preferences of the inhabitants and the approved architectural design. The incentive to construct these structures is mainly based on economic consideration. This proliferation of these illegal structures portrays the scarcity of urban space in Hong Kong and the desire of the inhabitants for more space. The attraction to urban areas is because of the availability of employment in urban areas. With the increase in population, the building structures have also increased both in number and size. These housing units are owned under strata titles as assignees of leasehold shares. The management of residential blocks is conducted depending on whether they are managed by management companies or governed under the Deeds of Mutual Covenant. The issue as to the management of illegal structures arises in the control of common areas such as rooftops, canopies and podium decks. Because space is valuable in Hong Kong, private owners have an incentive to enclose common areas and construct unauthorized structures for their own use or to lease them to squatters (Lai and Daniel 115). Illegal structures Illegal structures which are also referred to as unauthorized building works are regarded as a housing problem. The term illegal structures are not contained in the Buildings ordinance, but instead it is comparable to unauthorized structures in the ordinance. The Building Ordinance defines buildings to include any type of building construction, repairs, alterations, demolition, addition and any kind of building operation. For most of these buildings, government approval is mandatory before the construction is done. The building department defines unauthorized buildings as building works that are constructed outside the building, as well as modifications and alterations done inside the building and involve the structure of the building. These structures are considered unauthorized as they are built without the prior authorization of the Building Authority. Additions that are constructed inside the building, but do not comply with building standards are also referred to as an unauthorized building works (Tanasescu, Ernest and Alan 480). Section 14 (1) of the Building Ordinance requires that all building works must not be commenced before the approval of the Building Authority. This, therefore, implies that it is the responsibility of all property owners to ensure that unauthorized buildings are not constructed on the building. Section 24 of the Building Ordinance authorizes the Building Authority to issue orders to the property owner. These orders may either require the property owner to demolish the unauthorized building works or force the construction work to comply with the building regulations. Where such an order is issued the same is registered with the Land Registry against the property and as such imposes an encumbrance on the property. Registration of the statutory order can only be vacated when the property owner complies with the requirements of the Building Authority. This encumbrance affects the transfer of the title where the property owner intends to sell the property. Where the required compliance is trivial the buyer of the property may require the seller to meet the costs of compliance, but where the requirements are material it may result in a defect of the title (Wong and Leo 28). In Spark Rich v Valrose [1999] HKCA 457, it was held that it is impossible to formulate a test to ascertain real risk from risk that is not real. Therefore, it is more prudent to determine whether the illegal structure will pose a risk to the purchaser of the property of a successful action by the building authority. Where there is no risk of a successful claim by the Building Authority then the title of the property is deemed a good title. The burden of demonstrating that the title is good falls on the vendor of the property and in cases of illegal structures the vendor must assure the purchaser that the risk can be disregarded. Luk Kwan Hung v Victory Mark Investment Ltd [2003] HKCFI 1213 established that where there is an encumbrance on property such as a possible enforcement by the building authority because of breach of regulations, then he title of the property is held to be defective. The vendor of the property has a duty to disclose any material circumstances that may affect the property. The vendor, therefore, has a duty to disclose such an encumbrance to the purchaser and failure to do so will warrant the purchaser to rescind the purchase contract. Giant River Limited v Asie Marketing Limited [1988] HKCFI 372 stated that a good title is e that can be forced on unwilling purchaser where an action for specific performance. The court held that it cannot force a defective title on a purchaser. The purchaser, on the other hand, ought not to accept a defective title. The question asked in the current case was whether the purchasers were not at risk of an assertion of reentry by the Crown. The case clearly set out the principle that purchasers are only bound by their acceptance of the title provided they are made aware of it and where anything is not disclosed by the vendor then they will not be bound by the acceptance of the title. Section 40 of the Building Ordinance provides that anyone who contravenes the provisions in section 14 (1) regarding unauthorized structures shall be guilty of an offense. The punishment for this offense upon conviction is a fine of HK$400, 000 and an imprisonment for 2 years. The enforcement of this provision is the mandate of the Buildings Department. Illegal structures are demolished to protect the inhabitants of the building from harm. Implications of illegal structures Whereas these illegal structures serve some needs, their presence is problematic, especially in regard to property management. Some of the implications of illegal structures include the risk of fire, structural loading, ventilation, visual and aesthetics, conveyance and duty. Illegal structures add to the load of the building which may result in the failure and collapse of the building structures. These illegal alterations and additions are particularly hazardous in high density and high rise environments. The additional load on the structure makes these entire building unstable because the load of the structures exceeded. There is also the risk of fire since illegal structures create unnecessary fire loads or obstructs means of escaping fire incidents. The Building ordinance provides that illegal structures create fire hazards for the users of the property and make firefighting more cumbersome where there are incidences of fire. Since the structures are unauthorized and are visually obstructive they block the users of the building or neighboring buildings. These individuals have an incentive to report such structures to the Building Authority. Illegal structures, especially canopies obstruct natural light and ventilation. This affects some type of buildings which have windows aimed at providing habitable rooms. Some rooms have windows that face into uncovered and unprotected space to provide sufficient lighting. The construction of illegal structures tends to limit the use of these windows and therefore obstruct both lighting and ventilation (Chan et al 28). In the case of Ringo Chung v Leung Chi-Shing [1996] HKCFI 264, the court observed that building works cannot be conducted without the approval of the Building Authority unless the works are exempted under section 41 of the Building ordinance. These exemptions should not affect the structure of the building. The vendor of the property has an obligation to show and prove good title. In Mariner International Hotels Ltd v Atlas Ltd [2007], HKCFA 5 provides that the first requirement for a construction work to come within the exemptions of Section 41 (3) of the Building Ordinance is that the work must not involve the structure of the building. The second requirement for an exemption is that it must be in the building. Construction on a building affects its structure if they serve a structural function or can affect the integrity of the structure. Contractual and legislative rules Illegal structures on a building, irrespective of their type may render the title of the property defective. This consideration may not be important when the prices are rising, however, when the prices fall after a sale and purchase agreement is made then the buyer might seek to rescind the purchase contract. The most often sought grounds for such options are the presence of unauthorized structures. Moreover, unauthorized structures also affect the estate duty. Although the structures are unauthorized they are considered property in respect to taxes and as such they are subject to estate duty as provided for by the Stamp duty Ordinance as held in Man Kam-hung v. Commissioner of Estate Duty [1965] HKLR407. The relevance of these issues must be put into consideration by property owners, but the most important factors that affect the obligations duties and authority of property owners with unauthorized structures include the terms of the government lease, the terms of the Deed of Mutual Covenant, the Building Ordinance and policies established by the Building Authority. The government lease on the land is a civil contract between the lessee and the government through the lands Authority. This contract regulates the use of the land and the forms of structures developed on the land. The terms of these contracts are often subject to legislative rules. Where the lease do not specify that the works on the land need approval, then enforcement against illegal structures can only be brought by orders of the Building Authority as authorized by the Building ordinance. On the other hand, where the lease specifies that the approval is required to construct structures on the land, then action against illegal structures can be brought by the Building Authority or contractually by the Lands Authority (Lai Daniel and Hing-fung 96). The construction of illegal structures is generally against the Deed of Mutual Covenant because they are alterations of the physical appearance of the building or block. In The Incorporated Owners of Mei Foo Sun Chuen Stage VI v, Grandyield Knitters Limited [LDBM 110/2011] the court held that even though the building department does not require elimination of air conditioners on the exterior of buildings, these air conditioners breached the provision of the Deeds of Mutual Covenant and therefore had to be removed. Breach of the Deed of Mutual Covenant brings civil liability, but where there are unauthorized building works criminal liability may arise. Enforcement against unauthorized structures on private property in urban areas, as well as towns in new territories, is governed by the building ordinance. Section 24 of the Building Ordinance requires that buildings which are constructed in contravention of the provision of the ordinance be classified as illegal structures. The building Authority is authorized to initiate enforcement against illegal structures by serving an order to the owner to remove the structures. These orders require the property owner to demolish the illegal structures and reinstate work in compliance with the approved plans. Such orders are registered in the Land Registry as encumbrances on the property. Where an order is made on an illegal structure on a common area of a building then the titles of all units within the building are affected. A property owner issued with such an order can appeal to the Building Appeal tribunal who can either allow or dismiss the appeal. Conclusion The authorities have taken up measures against illegal structures. The cost involved in enforcement against illegal structures can be considerably reduced if the property owners understood the provisions in the Deed of Mutual Covenant, the procedures involved in alterations and modifications as well as the consequences of illegal structures this will not only assist the property owners, but also the Building Authority as the instances requiring enforcement will reduce. Works cited Chan, Daniel WM, et al. "Overview of the development and implementation of the mandatory building inspection scheme (MBIS) in Hong Kong." Built Environment Project and Asset Management 4.1 (2014): 71-89. Lai, Lawrence Wai-chung, Daniel Chi-wing Ho, and Hing-fung Leung. Change in Use of Land: A Practical Guide to Development in Hong Kong. Vol. 2. Hong Kong University Press, 2010. Lai, Lawrence WC, and Daniel CW Ho. "Unauthorised structures in a high-rise high-density environment-The case of Hong Kong." Property Management 19.2 (2001): 112-123. Tanasescu, Alina, Ernest Chui Wing-tak, and Alan Smart. "Tops and bottoms: State tolerance of illegal housing in Hong Kong and Calgary." Habitat International 34.4 (2010): 478-484. Wong, Johnny Kwok Wai, and Leo Siu-Kit Lau. "From the ‘urban heat island’to the ‘green island’? A preliminary investigation into the potential of retrofitting green roofs in Mongkok district of Hong Kong." Habitat International 39 (2013): 25-35. Read More