A study of the significance of the Building Management Ordinance on resolving conflict between owners' corporations and individual owners

Abstract

In Hong Kong, the Building Management Ordinance (Cap. 344) (BMO) establishes the legal framework for the formation of Owners’ Corporation (OC) and the resolution of building management issues. However, concerns arise regarding the potential marginalization of minority owners due to the majority rule in voting processes. Conflicts between the OC and individual owners may also arise due to different perspectives in building management issues. This dissertation will study the deficiencies in OC formation and voting mechanism, whether the interests among different owners can be balanced in the voting mechanism, and how conflicts between the OC and individual owners can be resolved through the BMO and government policies. The study adopts the qualitative research approach. It is confined to case study of two housing estates, where conflicts arise between the OC and individual owners regarding building management and maintenance issues. The residents’ organizations of the above housing estates and some property management practitioners would be interviewed. Empirical literature review is conducted to identify the key issues about building management, such as the BMO, Deed of Mutual Covenant (DMC) and relevant government policies. Conceptual literature review is also conducted to identify related concepts, such as conflict, majority rule and silent majority. With reference to the literature reviews, case studies and qualitative interviews, new insight were observed. It reveals that several factors, including the proxy mechanism, proportion of undivided shares in the DMC, owners’ participation in building management, and right and legal consequence of the OC would account for the conflicts between the OC the individual owners. It also reveals that the BMO and relevant government may not effectively balance the interests and resolve the conflicts between the OC and individual owners. As such, some recommendations are made in response to the findings.