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VII. Land resumption

Once the development project or development scheme is launched, the URA has to repossess the land for redevelopment.

The URA first considers acquiring properties in redevelopment areas through private negotiation. If the URA fails to acquire land by private agreement for whatever reasons, such as title problems, probate cases or untraceable owners, the URA will make a request to the Government for resumption of the land pursuant to the Lands Resumption Ordinance ( Cap. 124 of the Laws of Hong Kong).

A. Application for land resumption

Under the Urban Renewal Authority Ordinance ( Cap. 563 of the Laws of Hong Kong), the URA may apply to the Secretary for Development requesting that he recommend to the Chief Executive in Council the resumption of land required for urban renewal.

If the Chief Executive in Council decides that the resumption is required for a public purpose, the Chief Executive may order the resumption.

B. Notice of approval of land resumption

If the Chief Executive approves the URA’s resumption application, a Government Notice must be published in the Gazette. Copies of the Government Notice must also be affixed in the redevelopment area and sent to the registered owners of the property, where possible.

C. Reversion of ownership to the Government

Under normal circumstances, the ownership of the properties will revert to the Government three months after the notice is published.

If there is an urgency to acquire the properties, a shorter period may be given.

Upon the date of reversion, all legal rights and interests of the owners no longer exist. Henceforth, the former owners are not entitled to collect rents or fees of any kind from their tenants or the occupants.

D. Compensation

Persons affected by land resumption will, subject to eligibility, be offered statutory compensation and an ex-gratia allowance.

Eligible persons include the former owner or persons having an interest in the land, such as the tenant.

Statutory compensation

Legal owners are entitled to the open market value of the resumed properties, assessed on a vacant possession basis or tenancy basis, as appropriate, on the date of reversion.

Ex-gratia allowance

Owner-occupiers may also receive an ex-gratia allowance, namely the Home Purchase Allowance (HPA).

The amount of HPA payable to individual owners is the difference between the value of a notional replacement flat (based on a seven-year-old flat of a size similar to the resumed flat and in the same locality) and the open market value of the resumed flat.

1. When does the Government make an offer of compensation or invite claims for compensation?

The Government will make an offer of compensation in respect of the resumption to the former owner and to any person having an estate or interest in the land immediately before reversion or invite claims for compensation from them within 28 days of the date of reversion.

When there are legal issues, such as title issues or right-of-way issues, pertaining to the resumed land, the Government invites the related parties to make claims for compensation.

Those who are invited to submit their claims for compensation must submit their claims in a form specified by the Director of Lands, setting out the amount of compensation claimed. They must also provide to the Director of Lands any accounts, documents or particulars the Director of Lands may reasonably require in support of such claims. It is common practice for the claimant to submit his claim to the Director of Lands in writing.

2. What should a person do if he is affected by land resumption but offered no compensation?

Any person who considers that he has a compensatable interest in the resumed land, and who has been neither offered compensation nor invited to claim compensation may, within one year from the date of reversion, submit a claim in writing to the Director of Lands stating the nature of his estate or interest in the land and the amount of compensation which he claims for the resumption of that estate or interest.

This situation usually occurs when it was thought that the Government and the owner or person entitled to compensation would reach an agreement and the land would be purchased rather than resumed.

E. Lands Tribunal referral and appeal mechanisms in respect of payment of the HPA

Statutory compensation

In the event that an agreement as to the amount of statutory compensation (if any) cannot be reached between the claimant and the Government, either party may submit a claim to the Lands Tribunal for a determination of the amount of the compensation. The figure awarded is then binding on both the claimant and the Government. Any previous offer from the HPA will be withdrawn upon referral of the case to the Lands Tribunal.

Ex-gratia allowance

An owner who considers himself aggrieved by the decision of the Director of Lands in respect of the payment of the HPA(on contentious issues regarding the eligibility for the HPA, the calculation of floor area for payment of the HPA, or other related matters)can, within 60 days of the decision, submit an appeal in writing to the Appeals Committee.

The Appeals Committee, after a hearing and investigation, then makes a determination on the decision of the Director of Lands, if necessary.

If the Director of Lands does not accept the determination, the case then goes to the Secretary for Development who reviews the case and makes a final decision on it.

Appeals on the unit rate (i.e. dollars per square metre) of the notional replacement flats are considered by the Director of Lands. Legal owners are required to submit an appeal in writing within two months from the date of an offer of compensation.

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