The Importance of Elections and Oversight
Building management in Hong Kong has long been governed by a structured system. On the surface, daily tasks like cleaning and security seem to be handled by property management companies. However, the true authority lies with the Owners’ Corporation (OC), which holds the ultimate power over the estate. This common misunderstanding often leads owners to overlook the importance of OC elections, failing to recognise that property management companies are merely paid executors, while the OC is the true decision-maker.
Established under the Building Management Ordinance, the OC has legal status, representing all owners in managing the common areas of the building. Its responsibilities include setting financial budgets, enforcing the deed of mutual covenant, and safeguarding the property and the well-being of residents.
When major renovations are required, OC decisions often involve handling budgets that range from tens of millions to over a billion Hong Kong dollars. These decisions not only affect the structural safety of buildings but also determine the financial burden on residents and even the fluctuation of property values. If the OC falls into the hands of those with ulterior motives, high-cost, low-quality projects may be approved, draining the estate’s reserves and damaging property values—leaving owners in a “pay more, suffer more” situation.
A Wake-Up Call from the Wang Fuk Court Fire
In 2025, a devastating fire broke out during external renovation works at Wang Fuk Court in Tai Po, causing significant casualties and shocking the city. The incident highlighted safety concerns over construction materials and underscored the shortcomings of OC oversight.
Questions arose: Were safety-compliant materials used? Was cost-cutting prioritised over safety during the tender process? These concerns sparked widespread attention from both residents and the broader public.
The tragedy serves as a stark reminder to all estates in Hong Kong that major renovations are not merely technical projects—they are critical decisions that directly impact residents’ safety and well-being. An OC lacking professional knowledge and refusing to accept oversight risks exposing residents to unnecessary dangers.
Mandatory Building Inspection Scheme and Collusion Risks
Under the government’s Mandatory Building Inspection Scheme (MBIS), private buildings aged 30 years or older are required to appoint registered inspectors to assess and supervise maintenance works for common areas, external walls, and projections, following a statutory notice issued by the Buildings Department. In essence, once a building surpasses 30 years, maintenance becomes inevitable.
As of now, there are approximately 28,000 private buildings in Hong Kong older than 30 years. The extensive scope and staggering costs of these projects have created fertile ground for corruption, with issues like bid-rigging and substandard work becoming prevalent. The weakest link in these situations is often the OC’s management and supervision.
How Are Owners’ Corporations Formed?
An OC is established under the Building Management Ordinance and serves as the primary vehicle for owners to oversee estate management. The formation process is governed by strict legal procedures.
Initiators must first consult the Land Registry to review the building’s deed of mutual covenant (DMC) and confirm the total ownership shares, as these will determine voting rights and quorum for meetings. They can then reach out to the District Office’s Building Management Liaison Team to ensure compliance with procedures and may even request their attendance at meetings.
The most common approach to forming an OC is for owners holding at least 5% of the ownership shares to initiate the process and appoint a convener. The convener must issue a notice at least 14 days before the meeting, detailing the date, time, venue, and agenda. Notices must be prominently displayed in the building, published in newspapers, and sent to all owners by mail or hand delivery. The agenda typically includes appointing a management committee and electing office bearers.
For the meeting to be valid, attendees must represent at least 10% of the total ownership shares. The OC is established if over 50% of attending owners (holding at least 30% of the total ownership shares) vote in favor. Once approved, the number of committee members is decided, and elections are held for positions such as the chairman, vice-chairman, secretary, and treasurer.
Within 28 days of the meeting, the OC must submit an application to the Land Registry, including the application form, meeting minutes, a copy of the DMC, and declarations of committee members’ integrity. Upon approval, the Land Registry issues a certificate of registration and publishes it in the Gazette, officially establishing the OC.
After formation, the OC must promptly handle operational tasks, such as opening a bank account in the OC’s name to manage finances, purchasing third-party liability insurance of at least HK$10 million for the building’s common areas and OC property, and negotiating transitional arrangements with the existing property manager or appointing a new one to ensure smooth operations.
Every step of the process—from reviewing documents and gathering ownership shares to holding meetings and registering the OC—must strictly comply with legal requirements. Owners who cannot attend in person can submit a proxy form at least 48 hours before the meeting. Transparency and fairness in the election process are paramount to avoid conflicts of interest. Only by adhering to proper procedures can the OC build credibility and protect the long-term interests of the building and its residents.
How to Become an Owners’ Corporation Member
Becoming a member of an Owners’ Corporation (OC) is not just a symbolic title—it is a position of significant authority paired with equally heavy responsibilities. To qualify as a member, one must be a property owner; tenants are not eligible to run for election. The chairman and vice-chairman must also be owners, while the secretary and treasurer positions can be held by non-owners. Members are elected during the general meeting of owners and must secure support from a certain percentage of ownership shares to be successfully appointed.
However, serving as an OC member is far from an honorary position. It comes with substantial legal obligations. Mismanagement, such as negligence leading to third-party injuries or severe financial issues, can expose members to civil lawsuits or even criminal charges. For example, in 1994, during the dismantling of a canopy and fish tank at Sun Ho Restaurant in Aberdeen, the structure collapsed, causing one death and injuring more than ten people. The court ordered multiple parties to pay HK$33 million in compensation to the victim’s family. The OC, unable to bear over HK$20 million of the damages, was liquidated, forcing individual owners to shoulder the debt—some even faced foreclosure on their properties.
Beyond legal liabilities, OC members are responsible for managing the building’s daily operations and long-term upkeep. This includes ensuring that common areas such as corridors, elevators, external walls, and rooftops are safe and clean while maintaining order in the building. During major renovation projects, OC members must rigorously oversee the process, from tendering and approvals to monitoring construction, to prevent issues like substandard work or a lack of transparency. Financially, they are tasked with collecting management fees and maintenance funds, auditing accounts, and ensuring funds are used transparently and appropriately. Additionally, they must hire and supervise property management companies, maintain service quality, handle resident complaints, and balance the interests of various owners to ensure the smooth operation of the estate.
In practice, many OC members are retirees or working property owners volunteering their time. Faced with complex engineering contracts and legal documents, they often feel overwhelmed, especially while enduring pressure and criticism from residents. Though it is a thankless job requiring significant effort, it is an indispensable role for maintaining the harmony and security of an estate, making it crucial for capable and trustworthy owners to step up.
Notably, in 2017, Phase 3 of Tsuen Wan’s Belvedere Garden successfully thwarted a bid-rigging scheme, becoming a model for self-reliant owners. Architect and property owner Lau Pak-kin discovered that the consultant contract was suspiciously underpriced, raising concerns about bid-rigging. Lau organized a concerned owners’ group and replaced the existing OC. The new OC refused to hire consultants, broke the project into smaller, phased contracts, and directly engaged engineers to draft tender documents. This approach attracted 54 bids, reducing project costs to less than HK$70 million—saving each household from paying more than HK$30,000. This success story highlights how proactive and vigilant owners can protect their collective interests.
Bid-Rigging and Other Disputes
Over the years, bid-rigging scandals have frequently emerged in Hong Kong due to issues within OCs. High-profile cases include the HK$330 million renovation at Wang Fuk Court, as well as projects at Neptune Terrace in Chai Wan and Hoi Tao Building in Sai Wan. The Independent Commission Against Corruption (ICAC) and the Competition Commission have jointly acted against bid-rigging, arresting several OC members and contractors involved in these schemes. However, some buildings ultimately had no OC, no residents’ organisation, and no property management company—leaving them unmanaged and unrepaired, severely impacting residents’ lives.
According to Legislative Council documents, as of December 2024, Hong Kong has 3,067 buildings with none of the above, and approximately 20,800 buildings remain without an OC. This includes privately owned single-title buildings and standalone houses. The lack of OCs in these buildings makes it nearly impossible to implement maintenance projects, posing significant risks to public safety. Without unified management, problems such as crumbling facades, malfunctioning elevators, and inadequate fire safety equipment are commonplace, endangering both residents and passersby. Although the government offers support through certain initiatives, resources are limited, and these programs cannot cover all such buildings.
Additionally, in some of these buildings with fragmented ownership, reaching a consensus among owners is often difficult. Even with government subsidies, maintenance work may still face delays or fail to commence at all. This systemic challenge underscores the critical role of OCs in property management. Without an OC to serve as the backbone of an estate, collective decision-making becomes unfeasible, and maintenance and repairs remain unaddressed.
In some cases, disputes over bid-rigging have even escalated into violence. In 2022, a disagreement over a major renovation project at Hoi Tao Building in Kennedy Town turned violent, and in 2024, a committee member of the OC in Lei Cheng Uk Estate was attacked. These incidents highlight the lack of transparency and fairness in OC elections and project oversight.
Active Participation is the Best Solution
How can ordinary residents prevent similar chaos in their estates? Over-reliance on third parties for management, coupled with a lack of resident participation or oversight, can create hidden risks of mismanagement. Residents should actively attend owners’ meetings, voice their opinions, and closely monitor OC decisions. It’s a right and a responsibility--failing to participate effectively hands decision-making power to others, enabling bid-rigging groups to manipulate meeting outcomes.
Only through active participation, transparency, and vigilance can residents ensure their homes are well-managed and safeguarded from potential risks.
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