Fair Play in Building Rehabilitation Projects
By the end of 2025, there were over 20,000 buildings in Hong Kong aged 30 years or above that are under the coverage of the Mandatory Building Inspection Scheme[1] to carry out the prescribed inspection, and the repair if found necessary. Out of which, about 9,000 buildings have been issued with MBIS notice[2].
Against the background of an increasing number of aged buildings in need of rehabilitation, owners are increasingly concerned about how decisions on major building rehabilitation are made by the incorporated owners. Besides, there has been a strong plea from the community to tackle abuse of the tendering process such as tender manipulation and more importantly bid-rigging.
This article reviews how these public concerns have been addressed by the present legal framework, specifically, the Building Management Ordinance (Cap. 344) (“the BMO”) and the Competition Ordinance (Cap. 619) (“the CO”).
The Building Management Ordinance as recently amended
Under the BMO, it is the owners’ corporation (“OC”) which is conferred with the power to maintain and carry out work in respect of the common parts of the buildings for all owners. Recent amendments, which came into operation on 13 July 2025, have been made to the BMO to require a broader involvement of owners in large-scale maintenance projects in order to improve transparency and accountability in this regard.
First, a new category of “large-scale maintenance procurement” was introduced[3]. It covers the supplies, goods or services so required for repairing, replacing, maintaining or improving any of the common parts of the building if the average cost per flat[4] exceeds or is likely to exceed $30,000.
Second, to draw the attention of owners to the resolution of large-scale maintenance procurement to be proposed at the owners’ meetings, the following measures are put in place:
a. The notice of the meeting must be titled “Important Reminder” in English and “重要提示” in Chinese[5];
b. If the resolution concerns the question as to whether a tender is to be accepted, the estimated amount to be contributed by each owner is required to be set out in the notice[6];
Third, given the high stakes involved in the large-scale maintenance procurement, a higher level of “personal” involvement by owners is required. Owners are always entitled to appoint proxies to attend owners’ meetings. But sometimes, the undesirable situation that resolutions for procurement are passed with the presence of only a few owners may still occur. As such, it is now required that a resolution for large-scale maintenance procurement can only be passed if at least 5% of the owners or 100 owners (whichever is the less) have voted in person[7].
Fourth, to enhance transparency in particular to those who had not attended the meeting in person, copies of the meeting minutes in which a proposed large-scale maintenance procurement resolution is considered must be supplied to all owners within 28 days after the date of the meeting. The minutes must record the number of owners voting in person and by proxy respectively[8].
Fifth, the procurement of large-scale maintenance must be conducted by an invitation to tender[9]. The specific tendering requirements must be followed[10]. For example, an invitation to tender has to be issued to at least 3 potential suppliers (or 5 as the case may be) to ensure broader participation, a copy of invitation to tender must be displayed in a prominent place in the building and tenders submitted after the deadline must not be accepted.
Finally, to enhance the integrity and transparency of the conduct of tender, the members of the management committee of the OC and any other persons responsible for conducting the procurement have to declare any pecuniary or personal interests in the tender submitted, or connections with a person who has submitted a tender. Where a declaration is made, a notice of declaration will need to be displayed in a prominent place in the building to inform owners and certain restrictions (e.g. prohibition from attending meetings and participating in procurement activities) will apply[11].
Of note, failure to follow the above measures does not automatically render the contract for the procurement void[12]. The court however has the power to make any orders (including an order that the contract is void or voidable) and give any directions in respect of the rights and obligations of the contractual parties as the court thinks fit having regard to a range of factors[13].
The BMO is a cure to increase awareness and participation of the property owners on the demand side. The market however may sometimes be manipulated on the supply side and it is not as competitive as one might have thought. Thus, enforcement action is required to stamp out anti-competitive conduct.
Anti-competitive conduct under the First Conduct Rule of the Competition Ordinance
It is no secret that businesses entities active in building maintenance markets (such as property management companies, consultants and contractors) might enter into agreements, concerted practices and decisions that have the object or effect of preventing, restricting or distorting competition.
These malpractices may exhibit in different forms. The most well-known and notorious ones include[14]: –
a. Bid-rigging means (i) undertakings agreeing that one or more of them would not submit a bid or tender, or would withdraw an already-submitted bid, or (ii) submitting a bid which was agreed upon between two or more undertakings; both in circumstances which such agreement is not disclosed to the tenderee who called for the tender.[15] Conduct amounting to bid-rigging include:
i. Agreeing who will win the tender;
ii. Refraining from bidding to support the “designated winner”;
iii. Submitting cover bids with higher prices (“dummy” bids or “pig quotes”) designed to “lose” the bid;
iv. Coercing potential bidders not to submit a bid;
v. Exchanging or coordinating cover prices and high-price bids to manipulate tenders.
b. Price-fixing is where competitors agree to fix, maintain, increase or otherwise control prices.[16] Examples include agreeing on prices to be submitted in tender bids (which may also amount to bid-rigging), adhering to a specified price range and fixing percentage of price increase.
c. Market-sharing agreements which seek to allocate customers, sales or markets for production or supply of particular products is also prohibited under the First Conduct Rule.[17] This would happen for example where contractors agree to divide up a market so they would be “sheltered” from competition in their allotted portion of the market.
Competitors exchanging competitively sensitive information (such as planned prices, pricing strategy, and quantities) with the expectation that the recipient will act on the information, and the recipient intends or does act on the information,[18] also constitutes a type of “concerted practice”.
The above conduct all fall within the First Conduct Rule under s.6 of the CO, which prohibits undertakings from making agreements, engaging in concerted practices, or acting on association decisions that restrict competition.
In procurement for building major renovation projects, such conduct typically inflates prices, reduces quality or choice, and undermines the integrity of tender processes run by OCs or property management companies. It is a serious concern for property owners and the Competition Commission of Hong Kong treats building-related bid-rigging as a significant enforcement priority.
Public enforcement by the Commission is the primary mechanism through which the CO is implemented and upheld. The Commission is conferred with a wide range of powers to tackle contraventions of competition law, including in particular:-
a. Conducing search warrants;[19]
b. Using compulsory powers during investigations such as requiring production of information and requiring individuals to attend interviews[20];
c. Issuing warning notices to an undertaking requiring it to cease its contravening conduct and not to repeat the same;[21]
d. Commencing proceedings against persons suspected of infringement of competition law in the Competition Tribunal, which may result in, among others, fines which can reach a significant percentage of Hong Kong turnover of the undertaking for each year of infringement[22] and director disqualification orders[23].
The Commission’s early enforcement included bringing proceedings against a cartel concerning renovation services in public housing estates, resulting in six contractors being found to have engaged in market-sharing and price-fixing by allocating customers and coordinating pricing in relation to renovation works provided at On Tai Estate, Kwun Tong, and hit with heavy fines.[24] More recently, the Commission has conducted raids in August 2025,[25] September 2025,[26] and January 2026.[27]
Conclusion
For property management companies and OCs, the amended BMO requires a more stringent thresholds and procedure in procurement and more owner involvement and transparency. The CO requires that they avoid entering into or facilitating arrangements between contractors that could amount to bid-rigging or other forms of collusion. This means, for example, avoiding any practice of pre-screening or coordinating bidders, sharing confidential cost estimates with particular contractors, or allowing consultants to steer invitations in favour of associated firms. For contractors and consultants, coordination of bids, allocation of projects, or exchange of confidential tender information with competitors in building management projects carries a significant risk of First Conduct Rule infringement and exposure to proceedings before the Competition Tribunal.
[1] Pursuant to Part 2A of the Buildings Ordinance (Cap. 123) and the Building (Inspection and Repair) Regulation (Cap. 123P)
[2] See the written reply by the Secretary for Development in the Legislative Council on February 2026 at https://www.info.gov.hk/gia/general/202602/04/P2026020400386.htm
[3] Section 2E of the BMO
[4] “Flat” does not include any garage, carpark or carport unless every flat in the building concerned is, or is part of, a garage, carpark or carport, see Section 2E(2) of the BMO
[5] Schedule 6C of the BMO, paragraph 3(1)
[6] Schedule 6C of the BMO, paragraph 3(2)
[7] Schedule 6C of the BMO, paragraph 4
[8] Schedule 6C of the BMO, paragraph 6
[9] Section 28F(1) of the BMO
[10] Section 28F(2)(a) and Schedule 6A of the BMO
[11] Section 28F(2)(b) and Schedule 6B of the BMO
[12] Section 28I of the BMO
[13] Section 28J of the BMO
[14] Price-fixing, market sharing, bid-rigging as well as output restriction are all categorised as “serious anti-competitive conduct” under s.2(1) of the CO
[15] Section 2(2) of the CO
[16] The Competition Commission’s Guideline to the First Conduct Rule (27 July 2015), paragraph 6.10
[17] The Competition Commission’s Guideline to the First Conduct Rule (27 July 2015), paragraph 6.17
[18] The Competition Commission’s Guideline to the First Conduct Rule (27 July 2015), paragraph 2.28
[19] Sections 48-50 of the CO
[20] Sections 41 and 42 of the CO
[21] Section 82 of the CO
[22] Section 93 of the CO
[23] Sections 101-103 of the CO
[24] Competition Commission v W. Hing Construction Company Limited (CTEA 2/2017)
[25] Competition Commission’s press release “Competition Commission conducts search in case relating to bid-rigging over building maintenance”, 5 August 2025, https://www.compcomm.hk/en/media/press/files/building_maintenance_search_PR_EN.pdf
[26] Competition Commission’s press release “Competition Commission conducts search in bid-rigging case involving 25 building maintenance projects across multiple districts in Hong Kong”, 10 September 2025, https://www.compcomm.hk/en/media/press/files/Janus_PR_EN.pdf
[27] Competition Commission’s press release “Competition Commission carries out new round of enforcement actions against anti-competitive practices in building maintenance sector”, 29 January 2026, https://www.compcomm.hk/en/media/press/files/Hunter_PR_EN.pdf
Authors: Ross Yuen, Emily Ting
Ross Yuen
Ross has his practice mainly in property law (including Chancery, Trust and Probate) and commercial law. He is recently appointed as Member of the Panel of the Board of Review (Inland Revenue Ordinance).
Visit Ross’s profile for more details.
Emily Ting
“Emily is a top-class junior barrister with an amazing ability to process masses of information and documents quickly. and extract the key points. She is also able to leverage her skills across a range of commercial litigation to great effect in competition law cases.”
Legal 500 Asia-Pacific 2026, Competition, Rising Star
Emily is a Charles Ching Scholar and has been recognised by Legal 500 Asia-Pacific 2025 and 2026 as a Rising Star in Competition.
Since joining Chambers in 2020, Emily has maintained a broad civil practice. She has significant experience in land law and handles a growing number of competition matters. Emily also advises and acts in a diverse range of matters, including commercial disputes, trusts and probate, family, tax, and judicial review.
Prior to commencing her practice, Emily served as a Judicial Assistant to the Court of Final Appeal between 2019 and 2020.
More details can be found in Emily’s profile.
This article was first published on 13 February 2026.
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.