Conveyancing Lawyers Beware: Unpacking the Hidden Risks in the Proposed Amendments to the Buildings Ordinance (Cap 123)
Land Law
Introduction
On 13 December 2024, the Development Bureau issued a Legislative Council paper on proposed amendments to the Buildings Ordinance, Cap. 123 (“the BO”). The proposed amendments are currently in a two-month public consultation until 28 February 2025.
This would be an overhaul of the BO, which first took effect back in 1955 and was only amended once in 2012, introducing the Mandatory Building Inspection Scheme (MBIS) and Mandatory Window Inspection Scheme (MWIS).
The Proposed Amendments
The proposed amendments are anchored in three aspects: (1) speeding up building inspection and repair, (2) reforming the policy on unauthorized building works (“UBWs”), and (3) enhancing building safety. Across the board of these 3 aspects, the amendments involve raising existing penalties and introducing new fixed penalties.
In respect of UBWs, a risk-based approach is proposed to combat the currently low enforcement efficiency. They would be divided into (1) minor[1] and (2) serious[2] UBWs. For minor UBWs, the existing ones would be treated sympathetically while a new integrated scheme would be introduced for future works to be conducted. The aim is to focus enforcement resources on combating serious UBWs.
While the above amendments are more of a political or social issue rather than a legal one, the proposed additional enforcement tools against serious UBWs may have a wider legal implication in particular to conveyancing lawyers.
A new offence is introduced so that an owner commits an offence if a serious UBW is found in a property purchased after a certain specified period after the commencement of the amendment ordinance (“the New Offence”). The rationale is to prevent situations where “some owners could evade liability by arguing that the UBWs were already in existence when they purchased the property”. It appears that the New Offence comprises of the following features: –
1.1 Irrespective of whether the UBW was erected by the owner, the owner has to bear the legal responsibilities for allowing the serious UBW to exist; and
1.2 The owners may rely on the defence that they have taken all reasonable steps, including appointing a building professional to confirm that there were no UBWs in the property, before purchasing the property.
Further, an ancillary offence would also be introduced so that a person who knowingly assists an owner in committing the New Offence above will be deemed guilty of the same offence (“the Aiding Offence”). They include solicitors and estate agents involved in the transaction.
Comments on the New Offence and the Aiding Offence
The New Offence
First, it is unclear what exactly the actus reus of the New Offence is — whether it is the act of purchase itself, or it is the act of purchasing the property and not removing the serious UBWs subsequently. If the actus reus is the act of purchase per se, then the New Offence would indirectly encourage the vendors to remove serious UBWs prior to completion. But a question arises if it is permissible for the purchasers to complete the transaction first with the intention, say and to remove the serious UBWs post-completion. It is also relevant to the Aiding Offence to be discussed below.
Secondly, the defence suggested in the Consultation Paper implies that purchasers would have to appoint building surveyors for inspection before entering into any form of agreement. It may increase transaction costs and time.
The Aiding Offence
As for solicitors, it is an offence, in the example given in the Consultation Paper, if the property is encumbered due to non-compliance with removal orders, and the solicitor has failed to exercise due diligence in advising the purchaser of the existence of serious UBWs which he knew of at the time of land search and assisted in the completion of the property transaction. Any conveyancing lawyer may ponder the following questions:-
(1) Is it a complete defence so long as the solicitor has warned the purchaser of the existence of the UBWs?
(2) Does the solicitor have to take the extra step to cease to act in order to err on the side of caution?
(3) Alternatively, depending on the actus reus of the New Offence, is the solicitor entitled to accept a written confirmation from the purchaser that he would in due course after completion remove the serious UBWs?
(4) Further, would the vendor or even the solicitor representing the vendor be caught by the Aiding Offence as well?
For estate agents, in the example provided, they may commit the offence if the provisional sales and purchase agreement stated that there are serious UBWs in the property, but the estate agent failed to advise the purchaser of the existence of the same. Implications arising from this mainly revolve around the role which the estate agent should take in such circumstances:-
(1) Is it a complete defence if the estate agent simply warns the purchaser in advance?
(2) Further or alternatively, is a duty imposed upon estate agents to report the matter to the Buildings Department, and/or withdraw from acting as an agent?
It is understood that the Government will discuss with the Hong Kong Institute of Surveyors, the Law Society of Hong Kong and the Estate Agents Authority, etc to formulate relevant professional or code of conduct. One must await the results of the public consultation and subsequently the amendment bill to see what lies ahead for the regulatory regime of UBWs in Hong Kong.
The Consultation paper can be found here:
https://www.devb.gov.hk/filemanager/en/content_2419/Consultation%20Paper%20on%20BO%20Review.pdf
The Legislative Council Paper can be found here:
https://www.legco.gov.hk/yr2024/english/panels/dev/papers/dev20241218cb1-1681-1-e.pdf
The Government’s Press Release on the proposed amendments can be found here:
https://www.info.gov.hk/gia/general/202412/13/P2024121300735.htm
[1] Including those related to people’s daily lives such as drying racks, canopies, supporting frames for air-conditioners, enclosed balconies, etc.
[2] Serious UBWs refer to works for which prior approval or consent of the Buildings Department should have been obtained in accordance with the BO, and have contravened the BO.
Ross Yuen
Ross has an active practice in land law. He is recently appointed Chairman of the Appeal Tribunal Panel (Building).
Visit Ross’s profile for more details.
Eunice Lui
Eunice was called to the Bar in 2024. Eunice joined Chambers in the same year upon completion of her pupillage with Mr. Hectar Pun SC, Ms. Priscilia Lam, Mr. Ross Yuen and Dr. Benny Lo.
Eunice is developing a broad mixed practice, spanning over land, commercial, arbitration and public law matters, and accepts instructions in all areas of Chambers’ work. She is fluent in English, Cantonese and Putonghua (Mandarin).
During her studies at the University of Hong Kong, Eunice served as part of the Law Association, representing law students of her cohort. Eunice was also an enthusiastic mooter, as she represented the University of Hong Kong at the Twenty Second Annual International Maritime Law Arbitration Moot as oralist, in which her team was a quarter finalist. Prior to commencing pupillage, Eunice served as a Marshal to the Honourable Madam Justice Carlye Chu, Vice-Preseident of the Court of Appeal.
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This article was first published on 24 February 2025.
Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case. The photographs which appear in this article are included for decorative purposes only and should not be taken as a depiction of any matter to which the case is related. The views and opinions expressed in this article/material are solely those of the members authoring it and do not necessarily reflect the official policy or position of Denis Chang’s Chambers, or of any other member or members of Denis Chang’s Chambers.