Protecting Rights in Forced Building Sales

Mrs. Cheung bought a tenement building unit in Hung Hom from 1968 three years ago. This year, she received a notice from the Lands Tribunal: the developer has acquired 72% of the ownership and applied for forced sale. With the threshold lowered by the new amendments, can she save herself? The following explains in detail how to protect oneself during acquisition.

1. New Threshold Quick Read (Effective from 2024‑12‑30)

• General residential buildings aged 50‑59 years, located in government-designated redevelopment areas → 70 % ownership can force a sale
• General residential buildings aged 60‑69 years, also located in designated areas → 65 % ownership
• Other plots aged ≥ 50 years → still 80 % ownership
• Industrial buildings aged ≥ 30 years and located in non-industrial zones → 70 % ownership
• Allows the merging of adjacent plots into a single forced sale application (to expedite acquisition)

2. Compulsory Sale Process (Overview)

• Developer meets the threshold → submits application to the Lands Tribunal
• The Tribunal issues a Compulsory Sale Notice to the remaining owners and publishes it in the Gazette
• Small owners can submit an "Objection Notice" within 28 days
• Hearing at the Tribunal (approximately 6‑12 months) → determines the reserve price and whether to grant the compulsory sale order
• Public auction, mostly the developer bids and purchases by themselves

3. Three Steps for Small Property Owners to Protect Themselves

• Negotiate the Base Price
  • Submit a notice of objection within 28 days
  • Prepare two professional reports: market valuation + analysis of salable floor area upon redevelopment
  • Goal: Prove that the base price is low and strive for an increase
• Privately Increase the Acquisition Price
  • Form a "Small Owners' Group" with the remaining units
  • Negotiate with the developer for the market value plus 5-10%, and request relocation allowance
• Apply for Extension for Owner-Occupiers
  • Apply to the tribunal for a delay of up to 12 months in handing over the property to secure a relocation buffer period

4. Risk Checks Before Buying Old Buildings

• Check at the Land Registry: If a single company already holds more than 60%, the acquisition process is fast
• Review the building's age and plot ratio: Buildings over 50 years old with low development density have a high incentive for redevelopment
• Confirm if it is part of a "designated redevelopment area": The threshold has been lowered to 65-70%
• Search the address on the Tribunal's website to see if there is any record of a compulsory sale application
• Pay attention to whether acquisition notices or uniform offer letters are posted in the lobby

5. The Example of Thirteen Streets in To Kwa Wan (2024)

• The consortium's acquisition reached 69%, as it is a designated area with buildings over 60 years old → meeting the 65% threshold
• Small owners formed a group to oppose and submitted valuations, successfully increasing the auction reserve price by 10%
• Both parties eventually reached a private agreement: market value of the property + an additional one-time relocation subsidy, with vacant possession within six months

Although small owners find it difficult to stop redevelopment, they can still strive for a higher reserve price and compensation through professional valuation and group negotiations to minimize losses; before investing in old buildings, it is essential to check the building's age, plot ratio, and whether it is located in a designated redevelopment area, assessing the risks before placing a deposit.