Bid to turn 14 subsidised Hong Kong sale flats into subdivided homes raises abuse concerns

The owners of 14 subsidised sale flats have applied for a grace period to comply with Hong Kong’s new regulatory regime for subdivided homes, the housing minister has revealed, raising concerns that public resources were being abused.

The cases were disclosed on Monday at a Legislative Council housing panel meeting when lawmaker Mark Chong Ho-fung asked Secretary for Housing Winnie Ho Wing-yin about the use of subsidised sale flats as subdivided units for renting.

Chong said flats sold under the government-subsidised Home Ownership Scheme were deemed a form of social welfare and should not be used for profiteering.

Ho said that it was against the law for an owner to lease a subsidised sale flat without having paid the premium.

“The penalty is severe, with a maximum fine of HK$500,000 and one-year imprisonment [under the Housing Ordinance],” she said.

“If the owner has paid the premium and wishes to renovate it into a basic housing unit, as Chong has said, there are still some technical considerations … There are some structural restrictions.”

Under the Basic Housing Units Ordinance, subdivided flats must fulfil a set of minimum standards to be recognised as a “basic housing unit” that can be leased legally on the market from March next year.

Existing landlords can apply for a three-year grace period to carry out alterations, with registrations open between March this year and next February.

Ho said landlords of about 73,600 subdivided units had registered for the grace period, involving more than 20,000 complete flats.

She described grace-period applications from owners of subsidised sale flats as “rare”, involving 14 cases, or 0.07 per cent of the 20,000 homes.

However, she stressed that the government would monitor the situation closely.

While leasing subsidised sale flats with the premium unpaid was illegal, Ho said there were structural constraints and that some structures could not be removed easily.

She said creating a window in an exterior wall for lighting or ventilation would be subject to building-plan restrictions.

She added that estates had different designs and the exact structural restrictions would depend on the building plans of individual estates.

Chong urged the government to clearly state whether the 14 properties could be rectified without contravening the Deed of Mutual Covenant, a legally binding document covering all flat owners of a building and governing its management and regulations.

He also suggested that the authorities should consider explicitly banning owners of future subsidised sale homes from turning their properties into basic housing units.

Separately, Ho said the authorities had so far received recognition applications from landlords of 184 subdivided homes and certified 42 of them as basic housing units.

Ho said the applications were coming quicker than she expected, and foresaw that more properties would apply for accreditation.

Under the regime, a basic housing unit should have an area of at least 86 square feet and a 2.3-metre ceiling height, a separate waterproofed toilet and an operable window.

The requirements also cover fire safety, hygiene and other standards.

Landlords must hire specified professionals to confirm their properties comply with the minimum standards.