URA raises compensation for tenanted flats
The Urban Renewal Authority (URA) has amended its compensation
policy in favour of tenanted domestic properties in an effort to
promote better landlord-tenant relationship in projects targeted
for acquisition and redevelopment.
Previously, the assessment of the open market value of tenanted flats has been fixed at six per cent lower than that of a vacant flat in order to reflect generally the market difference between the two. However, this difference is expected to gradually disappear as the security of tenancy has been removed since July 9 this year when the Landlord and Tenant (Consolidated) Ordinance came into effect.
The URA has therefore decided to remove the six per cent difference correspondingly and treat the valuation of tenanted flats and vacant flats on an equal footing. The revised policy will apply to all new redevelopment projects.
It is estimated that the change will cost the URA about $27 million in additional compensation for tenanted properties within the remaining nine projects announced by the former Land Development Corporation in 1998 for which acquisition has yet to commence, including the Staunton Street/Wing Lee Street project in Sheung Wan and two projects in Tai Kok Tsui which were announced on Tuesday last week (December 14).
"We think this will give landlords an incentive to preserve existing tenancies with their tenants because the landlords will stand to benefit more by continuing to collect rental income while enjoying the same valuation as a vacant flat under the URA's compensation policy," a URA spokesman said.
"The new measure is designed to help alleviate the worries of some tenants that their tenancies may be terminated by landlords who can now repossess their flats more easily under the amended ordinance," he said
"Of course, no one, including the URA, can stop a landlord from exercising his legal right to terminate a domestic tenancy under the amended ordinance but, in the interest of tenants living in old buildings destined for redevelopment, we will do what we can to help make it a positive relationship and win-win situation between the landlords and the tenants," the spokesman added.
He said the URA has decided on this new arrangement after listening to the worries of some tenants and the views of a number of community groups concerned about urban renewal.
The spokesman, however, pointed out that the current policy of offering a supplementary allowance equivalent to 50 per cent of the Home Purchase Allowance for both vacant and tenanted domestic flats will remain unchanged.
Members of the public who wish to know more details about the new arrangement may call the URA hotline 2588 2333.