Insurance Subsidy for URA's Rehabilitated Buildings
The Urban Renewal Authority (URA) today introduced a new subsidy
to owners of buildings that have completed comprehensive
rehabilitation works under URA's voluntary schemes to help them
secure public liability insurance (PLI) for their buildings.
Announcing the subsidy as the latest in a series of initiatives to promote building rehabilitation, the Chairman of the URA's Planning, Development and Conservation Committee, Professor David Lung, said today (Saturday) that there has been widespread concern among property owners about their liability for neglecting building management and maintenance following a recent court case involving the Albert House in Aberdeen, in which all the building owners had to jointly shoulder the burden of a $25 million compensation in a fatal building accident.
In order to gauge the needs of old multi-storey buildings, Professor Lung said that the URA has conducted a public opinion survey on their views and attitudes towards public liability insurance. The findings strongly indicated that building owners have been shocked by the Albert House case and would like to either take out insurance cover or raise their existing insurance amounts.
The survey, which covered the owners' corporations of 144 buildings, showed that about 21 per cent of them have not yet acquired the protection of PLI while 62 per cent of the already insured would wish to raise their coverage after learning about the painful situation of the owners in the Albert House case.
"We think we should do something to help them. My committee has therefore obtained the URA Board's approval to introduce a new subsidy, on top of the existing material incentives, interest-free loans and grants of our rehabilitation schemes, to help them acquire PLI or raise their existing cover to a sufficient level,' Professor Lung said.
The survey indicated that all owners' corporations that have not yet acquired PLI said that they would do so if subsidised by the URA. Among those that have already been insured, 90 per cent said they would want to raise their coverage if assisted by a URA subsidy.
Apart from protection from public liability claims, Professor Lung said, an adequate PLI cover would also have the benefit of encouraging the banks to approve more confidently home mortgage loans for the owners or potential buyers of flats in rehabilitated buildings.
Mr Stephen Lam, District Development Director of the URA said any owners' corporation that has successfully completed comprehensive rehabilitation works under the building rehabilitation schemes of the URA would be reimbursed 50 per cent of the insurance premium for three consecutive years, up to a maximum of $6,000 per year. All it needs to do is to apply to the URA before taking out a PLI for its building with an insurance company under the approved list of the Government.
Applications for subsidy reimbursement should be submitted within 12 months upon completion of the rehabilitation works, he added.
It is estimated that each year, about 50 buildings which have completed rehabilitation works under the URA's rehabilitation incentive trial scheme and loan/grant scheme would be eligible to apply for the PLI subsidy. "This may not be a very significant number compared to the large quantity of aged residential buildings in the urban area but the URA's goal is to use this to pioneer and foster a culture of building care and maintenance generally," Mr Lam emphasised.
Also taking part in the media briefing today was the Chairman of the Hong Kong Federation of Insurers (HKFI), Mr K P Chan. He said the HKFI was impressed by the efforts of the URA to promote voluntary rehabilitation works among property owners, which also brought back to life the property market of aged buildings.
The HKFI is considering joining hands with the URA to arrange a series of briefings for insurance agents and brokers to help them look at the rehabilitated buildings in a fresh light.
Since October 2003, a total of 77 buildings, involving about 8,000 domestic units, have already joined URA's rehabilitation schemes and the number is growing steadily.
Owners' corporations of buildings within the URA's building rehabilitation scheme areas may call the URA hotline 2588 2333 for details.