When it comes to single private residential buildings in Hong Kong, property management has always been a challenge for owners as it encompasses diverse aspects, including handling administration, operations, and management such as cleansing, security, maintenance and repairs, and regulatory compliance. According to the Building Management Ordinance (Cap. 344) (BMO), the Owner’s Corporation (OC) of a single private residential building, if any, is a legal entity responsible for the control, management and administration of the common parts of the building — it has the rights to decide whether to engage any paid staff member, property management company or other professional trades to assist in carrying out its duties, responsibilities and powers.
In addition, considering building management covers a myriad of matters, an OC shall appoint a management committee (MC) to handle the day-to-day business for the OC — promptly and effectively. Under normal circumstances, the powers and duties conferred or imposed by the BMO shall be performed and exercised on behalf of the OC by the MC. In the event of a single private residential building lacking an owners’ corporation or an owners’ organization, a manager, i.e., a property management company engaged by the owners, will take responsibilities in regard to building management.
However, in Hong Kong, there are some “three nil” and aged buildings that may not be able to establish owners’ corporations or any form of residents’ organizations, or to engage property management companies due to various reasons. According to the Government, it was reported that as of December 2023, there were around 3,100 “three nil” buildings across different districts in Hong Kong, including Sham Shui Po, Tsuen Wan, Central and Western District, Eastern District, Wan Chai, Yau Tsim Mong, North District, Tai Po and Kowloon City.
In light of “three nil” buildings, the Government has been implementing a pilot scheme on “joint property management” in selected areas to provide various support to the owners of “three nil” buildings in terms of property management.
What is Joint Property Management?
Joint Property Management (JPM) is a new and innovative property management model that aims to coordinate single-block residential buildings that may not be able to establish any form of owners’ organizations or engage any property management services to co-appoint a property management company. Given most owners of “three-nil” and aged buildings lack experience and knowledge in managing property and appointing property management companies, the JPM model can assist them in acquiring quality and professional property management services at more affordable rates, thereby enhancing the living environment.
Trial of Joint Property Management in Hong Kong
The Urban Renewal Authority (URA) has partnered with The Hong Kong Institute of Housing (HKIH) to trial the joint property management model under the “District-based Building Rehabilitation Pilot Scheme” in the “Lung Shing” area in Kowloon City. The team formed by the URA and HKIH assisted two nearby “three-nil” buildings, namely Dragon Mansion and Kwok Ping House, to form OCs, then appointed a property management company through a tendering process.
Benefits of Joint Property Management
Building Management is undoubtedly complicated and tedious — it involves multiple stakeholders, policies and regulations. By consolidating property administration functions, here are some benefits it can bring:
1. Effective Cost Reduction
Consolidating the property management of nearby buildings enables the owners to share expenses for maintenance, security, and other services, resulting in a significant reduction in building management costs.
2. Professional and Systematic Management
A licensed property management company can provide professional and comprehensive property management services to owners, including cleansing and security services, maintenance, financial management and community building.
3. Improved Communication
Proper property management can foster better communication and coordination between owners, leading to a faster and more efficient decision-making process.
4. Regulatory Compliance
Appointed property management companies can stay updated on and ensure compliance with regulations governing real estate and property management, such as conducting regular property inspections and obtaining necessary permits and licenses for property operations.
PropTech: The Backbone of Consolidated Property Management
The property management industry is keeping pace with technological advancements. To enable an efficient and cost-effective management service, property management can leverage Property Technology (PropTech) like Property Management Software to facilitate business planning, monitor service delivery and enhance communications. In terms of joint property management, property managers can oversee and manage multiple single-block buildings efficiently via a centralized property management platform.
Reference:
A Guide on Building Management Ordinance (Cap.344)
https://www.ura.org.hk/en/news-centre/managing-director-s-blog/mdblog_20241006
