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These articles below can also be found in the 1 - 15 July 2009 issue of Square Foot magazine:

Market Watch

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Balcony blues

 

Illegal structures are two-a-penny in Hong Kong, and for many residents they provide essential living space. But safety concerns are causing the Buildings Department to be more rigorous about their removal. Alex Frew McMillan reports

 


 

Many residents of Scenic Villas, a luxury apartment complex along Sha Wan Drive in Pokfulam, were surprised to get letters on behalf of the Buildings Department early this year. Anyone who had enclosed or even altered their balcony was ordered to restore it to its original condition, at their own cost, or risk being taken to court. They had 60 days to comply.

The letters were in fact sent by the brokerage CB Richard Ellis (CBRE), acting as a consultant for the government. Some owners got angry. Others fretted about the cost. People who bought apartments with beautiful clear-glass balconies looking out towards Lamma Island were shocked – they hadn’t even done the work, but were now responsible, personally and financially, for setting the balconies back.


Such sagas are increasingly common in Hong Kong. The surprised residents at Scenic Villas only had to talk to their near-neighbours at Baguio Villa, the 19-tower development behind Cyberport, to hear that that complex had been targeted a few months earlier. Baguio residents got their letters and building orders last August.

Both Baguio and Scenic villas have organised their residents to try to negotiate with the Buildings Department. The management of each building is helping the owners hire an outside ‘authorised person’, or ‘AP’, to assess the renovations and get a plan approved for permissible balcony renovations. A structural engineer will also have to come in.

There will definitely be a cost to pay. Each owner at Baguio Villa will likely have to pay around HK$30,000 to have their balcony restored to its original condition – which no one really wants to do – or to repair the existing renovation to make it legal.

“There are three choices for the owners: they can reinstate the original balcony, and the second option is to use another material, like stainless steel, and the third choice is to use glass panel instead,” says Dickens Tang, the senior property manager at Baguio Villa. “Most of the owners will probably choose the glass panel so that it is more beautiful.”

At Scenic Villas, the owners will have to pay HK$3,000 to HK$5,000 to bring in the necessary professionals, plus any construction costs if strengthening is necessary.

It’s understandable that owners of apartments in these complexes, which look southwest from Hong Kong Island out towards the Lamma Channel, and were built in the mid-70s, have changed the appearance of their balconies.

“They didn’t like the old concrete railing,” says Francis Lee, who runs the building management at Scenic Villas. “It’s sort of an ugly concrete beam, and a steel railing, which is really an obstruction to the view if you sit on the balcony.”

One Scenic Villa resident agrees. He now faces the prospect of having to undo some costly renovations. “The old balcony railings were really ugly,” says the resident, who asked to remain anonymous because he does not want to be targeted by the Buildings Department. “We replaced the balcony doors with folding ones. The total renovation was about HK$1.2 million, all up. It’s one of those things where we took a chance, and now we’ve got to pay the price.”

In all, 144 out of 210 apartments in Scenic Villas got the orders. But that includes almost all the individual owners. The developer of the complex, Pokfulam Development Co., still owns one-and-a-half blocks in the seven-block estate. When it renovated the exterior in 2004, it appointed an AP and got permission from the Buildings Department to turn the balconies in the apartments it still owns to glass.

“They made a formal submission to the Buildings Department to change the railing to a glass railing, and that was all approved, so they are out of trouble,” Lee says.

Most private owners, when they move in, hire a designer to renovate their property. They may also bring in an architect. But very few hire the AP required to approve any structural renovations.

Unfortunately, such renovations are as illegal as they are common. Anyone buying an apartment with such modifications runs the risk of being ordered to restore the flat to its original state. The risk is especially great with balconies, which are typically clearly visible from the street. After an accident in Causeway Bay earlier this decade, the government has become more serious about cracking down on such illegal renovations.

“Any change to the external wall, the Buildings Department will take a very serious view on,” explains James Law, the senior director of building consultancy services at CBRE. “Any construction, any aluminium or metal, even flower planters or a flower box, the Buildings Department requires us to sort it out, and in most cases they will serve orders.”

Law is in charge of the department that supervises the work for the Buildings Department. He explains that since 2001, the department has been contracting out around 30 packages of 35 to 50 buildings each, each year. Consultants slowly work their way around the city, focusing on one neighbourhood at a time.

Owners “have to reconstruct according to the AP and a registered structural engineer”, Law says. “If the construction is already very strong, it may be possible to get it approved. But in most cases the owners will need to reconstruct the enclosure.”

The AP is personally responsible for any work he or she approves. It is a criminal offence to misrepresent an approval to the Buildings Department, so APs are leery of signing off on renovations they did not personally oversee – they risk jail time if they do.

The Buildings Department is understandably concerned that features, such as glass balconies, although pretty, may not have been properly installed. Contractors in a rush to finish a renovation, or forced to cut costs to stay within a budget, can make too many compromises. And no one wants to see glass panes go flying out onto the street in a typhoon.

The department used to turn a blind eye to minor changes to balconies. But it has become stricter over the last two to three years. It has not changed the rules regarding balconies but is enforcing them more stringently.

That doesn’t make many people happy. “No one likes to get an order from the Buildings Department, but if they do, it is because they are law breakers,” Law explains.

The Buildings Department has been willing to negotiate with the owners at Baguio and Scenic villas, and has extended the deadline for its building orders to be completed. But once an apartment has an order on it, it can’t be sold without the new buyer being informed of the order. They may want to negotiate with the seller to put money into an escrow account to pay for the order to be completed.

If people disregard the order, they will typically be slapped with a fine of around HK$20,000, plus an additional penalty of HK$5,000 for each day they have ignored the order. In the most recent case, at the Fairview Park complex in Tai Sang Wai in Yuen Long, the owner was given a fine of HK$10,000 for one order. Then he still has to do the work.

Owners also have to make sure they comply with the Deed of Mutual Covenant (DMC), the legal document that lays out what they can or cannot do to their apartment. But at Scenic and Baguio villas, the DMC didn’t really specify whether owners were allowed to renovate their balcony or not.

At Baguio Villa, the management company, International Property Management, a subsidiary of the developer, New World Development, is helping the affected owners to negotiate collectively with an AP, a structural engineer and a contractor. Some 110 owners are taking part in the collective scheme, while another 40 are going it alone, either appointing their own AP or trying to negotiate with the Buildings Department to get their balconies approved.

“We have already submitted the approved plan to the Buildings Department, and maybe it will be approved in the coming months. And then the contractor can start the work,” says Tang.



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