New rules to govern land leases

All 63 consulates that include American and Japanese missions and eight foreign clubs and offices in Hong Kong will need to apply for the renewal of their land leases 60 days before expiring after acquiring approval from the foreign ministry's commissioner, the Development Bureau has announced.

The bureau will gazette a bill today to fast-track processing the government's land leases in an attempt to allay owners' fears they might lose their property after their lease expires.

In the latest official documents, land plots or properties owned by consulates and international organizations will not only have to gain approval from the Lands Department, but also from the foreign ministry's commissioner before applying for extension.

It includes the offices and residences of their delegation in Hong Kong, and their application for lease extension should be submitted more than 60 days prior to expiry.

If the application is denied, even if the Lands Department decides to renew their lease, the agreement will not be extended and the rights will revert to the Financial Secretary Incorporation upon expiry.

A spokesman for the bureau said the law amendment involves less than 10 land lots and around 100 flats, adding it is a diplomatic matter, which is not under Hong Kong's jurisdiction.

The proposed bill came as around 300,000 land leases involving 1.5 million owners will expire between 2025 and 2047 - known as a cliff marking the end of the 50-year extension since 1997.

It said renewing leases with each of the owners after undergoing title checks is not feasible, while the uncertainty may spark fears in the market and land owners over worries that they might lose their property.

The government rolled out the Extension of Government Leases Bill, which will simplify the procedure of lease extension, and release a non-extension list of repeat offenders at least six years before the leases' expiry.

"The new legislation will not change the backbone of the 1997 land policy, and what is changed is the means through which leases will be extended, to ensure that the large number of leases will be dealt with in an efficient and orderly manner," the spokesman said. The bill aims to enhance the confidence of owners and investors in the renewal arrangements.

The bill will have its first and second reading at the Legislative Council on Wednesday.

It is expected to be enacted in the middle of next year, and land leases expiring between 2025 and 2030 will be published after its passage.

The first batch of land leases expiring in June 2025 involves 50 tenement buildings in Yau Tsim Mong.

Most of the leases will be extended, the spokesman said, unless significant public interest or national security matters are involved.

If national security issues arise after the granting of lease extensions, the Lands Department will not reverse its decision on renewal.

"It would then be more effective for law enforcement agencies to handle the matter in accordance with the national security law," the spokesman said.

The Hong Kong General Chamber of Commerce welcomed the bill, saying it "increases clarity and certainty, as well as reduces costs and encourages investment."

stacy.shi@singtaonewscorp.com