Residents should be guaranteed priority in the use - either through purchase or lease - of car parking spaces in private residential developments.

29 August 1997
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Residents should be guaranteed priority in the use - either through purchase or lease - of car parking spaces in private residential developments.

This is the main thrust of a package of recommendations put forward by the Consumer Council in a report to the Government and the Real Estate Developers Association.

In the report, the Council has observed that it is clear, from the Land Grants and similar documents, that the Government's objective is to give priority in the use of car parking spaces to residents.

This clearly demonstrates that residence and the right to occupy parking spaces are linked. But, in actual practice, this is not always put into effect.

The Consumer Council today unveiled details of the package in the face of recurring consumer dissatisfaction over the sale and leasing of car parking spaces in residential developments.

The problem stems primarily from an imbalance of supply in some private residential developments where the ratio of number of flats per car parking space is set from 4:1 to 7:1.

According to a Transport Department's Parking Demand Study in 1995, there was an overall demand for 264,699 spaces and a supply of only 239,000. But the overall shortfall of 10% masks the fact that in some districts the deficit is much more severe.

The situation has led to problems of, among others, hefty increases in the purchase price of carpark spaces and steep increases in monthly parking charges . It is further aggravated by the sale or leasing of the limited carpark spaces to non-residents and possibly speculation in the market.

Since 1994, the Consumer Council has received 162 complaints over the problem of car parking involving 43 private residential developments.

The attention of the Council was first drawn to the problem in 1994 when residents of 16 developments complained about steep increases in monthly charges of an average of 33% and, in one case, a high 57%.

The Council has, subsequently, discussed and put forward a series of recommendations to the Government and other interested parties. Some of these recommendations have been acted on by the Government.

These include revising the existing fixed parking rate to a range so that any shortfall in an area could be dealt with flexibly by applying an appropriate standard within the range, and requiring developers of Consent Scheme developments to make clear in their sales brochures the number of car parking spaces available for sale or rent.

Developers now give only the total number of car parking spaces in the sales brochures but need not specify their intention as to whether the carparks are for sale or rent.

In the light of recent consumer complaints, the Council has made further study and has come to the conclusion that a holistic view needs to be taken in order to address the consumer concerns.

An informed discussion on this important issue has become crucial particularly with growing affluence and the increasing affordability of cars, and development of large-scale housing projects in the coming years.

In its examination of the issue, the Council has identified 6 factors that have contributed significantly to the car parking problem :

  • growth of private car ownership;
  • restraints on the provision of private car parking spaces;
  • lack of statutory rent and tenure protection;
  • disposal of car parking spaces to non-residents;
  • lack of enforcement of conditions on use;
  • and limited disclosure of information

Recommendation 1
Improvement in the terms of land grant:

The Lands Department already requires in Land Grants that only vehicles belonging to residents or occupiers or their visitors may use the car parking spaces. But, as past experience shows, concentration only on the right to occupy is not sufficient. The Government should take a further step and spell out in future Land Grants in any residential development that

  • only the owners of undivided shares who have the right to exclusive occupation of residential flats may buy parking spaces which are intended for the use of residents of the developments;
  • only owners and/or residents may rent such parking spaces if they are not for sale; and
  • developers might apply to the Lands Department for permission to sell such car parking spaces to non-residents only when the developers could prove to the satisfaction of the authority that the supplies of such spaces are genuinely excessive.

The Grant should require that these conditions be brought to the attention of prospective purchasers of flats and car parking spaces.

Recommendation 2
Introducing statutory rent and tenure protection

At present the provisions of the Landlord and Tenant (Consolidation) Ordinance apply to car parking spaces let as a package with a residential unit but not when they are let separately. Certain provisions relating to 'domestic premises' and 'domestic tenancy' under the Ordinance should be amended to provide some forms of statutory protection e.g. notice period, first right to purchase, in respect of private car parking spaces for residents' use in domestic buildings, whether use is granted through tenancy agreements, contractual licences or any other arrangement of a similar nature. The extended legal protection will effectively address the lack of security of tenure and rent protection for those who rent parking spaces separately in existing developments.

Recommendation 3
Empowering Management or Incorporated Owners to enforce conditions on the use of the parking spaces

In order to overcome the practical barriers that exist at the moment in respect of the enforcement of conditions on the use of car parking spaces

  • the DMC of all new developments should include provisions relating to the conditions on the use of car parking spaces and enabling the manager or Incorporated Owners to take action in the case of breach; and
  • the Building Management Ordinance should be amended to put beyond doubt the ability of Incorporated Owners to enforce the conditions of use of parking spaces.

Recommendation 4
Disclosure in respect of disposal of car parking spaces

A requirement for disclosure of the number of spaces to be sold and to be rented should be included in Land Grants, Building Covenants and Pre-sale Consent Conditions. Such disclosure requirements should include details of carpark spaces including information on size, location and price.

For spaces in uncompleted developments, in line with Lands Department's requirement for pre-sale of units under Consent Schemes, information on size and location of the parking spaces available for sale should be published 7 days ahead of the date of sale and information on price 3 days ahead when spaces are pre-sold.

A longer period of notice should be given when a decision is taken to sell spaces that were previously rented out, to avoid the need for residents, who may not have been considering the purchase of a parking space, to make an important decision under pressure.

Recommendation 5
Creation of a code of practice for developers to include car parking spaces:

Developers should endeavour to provide accurate information to consumers and to adopt a code of best practice. The Consumer Council considers it desirable for the Real Estate Developers Association of Hong Kong to devise such a code in respect of sales of residential property which should extend to the sale and management of car parking spaces.

These recommendations are made to set out the important principles that should be reflected when changes in legislation and contracts are made. The precise detail of the changes is best addressed in the light of subsequent discussion.

In addition, the Council suggests that the Government should look at the feasibility and the acceptability to both public and developers of having car parks held in trust by management or Incorporated Owners for the benefit of all residents.