0 May 2016

FACILITATING SERVICES (PILOT SCHEME)

Pamphlet

URBAN REDEVELOPMENT FACILITATING SERVICES COMPANY LIMITED Estate Agent’s (Company) Licence No.: C-046202

Address 28/F COSCO Tower, 183 Queen's Road Central, Hong Kong

Telephone 2588 2800 Facsimile 2588 2585

Website www.ura-facilitator.com.hk

Email inquiry@ura-facilitator.com.hk

A wholly owned

subsidiary company of

Urban Renewal Authority

May 2016

Buildings Developed under Civil Servants’

Co-operative Building Society Scheme

1 May 2016

Part 1. OBJECTIVES OF FACILITATING SERVICES (PILOT SCHEME)

The Urban Renewal Strategy, which was promulgated on 24th

February 2011, states that

the Urban Renewal Authority (“URA”) may provide assistance to owners as consultant to

help them assemble titles for commencing owner-initiated redevelopment. To this end, the

URA has established a wholly-owned subsidiary, Urban Redevelopment Facilitating

Services Company Limited (“URFS”) which is holding an estate agent’s licence, to provide

the consultation services to interested owners under the Facilitating Services (Pilot

Scheme) (“the Scheme”).

Part 2. SCOPE OF FACILITATING SERVICES (PILOT SCHEME) – BUILDINGS

DEVELOPED UNDER CIVIL SERVANTS’ CO-OPERATIVE BUILDING

SOCIETY SCHEME

(a) URFS will provide facilitating services to eligible owners of buildings developed

under Civil Servants’ Co-operative Building Society (“CBS”) Scheme / the

Government Built Housing Scheme ("GBHS") to help them assemble titles for joint

sale of their property interests. The services include:

persuading yet-to-commit owners to participate in joint sale of their property

interests under the Scheme;

providing assistance to owners to remove alienation restrictions of their units (if

any) for the purpose of joint sale; and

appointing consultants on behalf of the owners and coordinating and monitoring

the services provided by the consultants.

(b) No acquisition, compensation, rehousing or resumption actions on the part of the URA

or URFS will be involved under the Scheme.

Part 3. APPLICATION REQUIREMENTS

(a) In each application, the applicants shall own in aggregate not less than the following

percentage of undivided shares in each lot of the site under application (“the

Application Site”):

(i) If the Application Site consists of one single building and one lot only, not less

than 50% of the undivided shares in that lot.

(ii) If the Application Site consists of only one single building which is situated on 2

or more lots, not less than 50% of the undivided shares in each individual lot in

the Application Site.

(iii) If the Application Site consists of more than one building which is situated on 2

or more lots, not less than 50% of the undivided shares in the relevant lot(s) on

which each individual building is situated. If any one building is connected to

another building by a common staircase, the average of the percentage of the

2 May 2016

undivided shares owned by those owners in the lot(s) on which one of the

buildings stands and the percentage of the undivided shares owned by owners in

the lot(s) on which the other of the buildings stands shall be not less than 50%.

(Examples for illustration purpose are in Appendix A)

(b) The majority of the buildings (i.e. buildings on more than 50% of the site area) in the

Application Site are not classified as “good” by URA in its Building Conditions

Survey after carrying out inspection of buildings. Further inspections of the buildings

may have to be conducted by URFS or the consultants engaged by URFS, if so

deemed necessary.

(c) If a District Urban Renewal Forum (“DURF”) has been set up in the district covering

the Application Site, the Application Site should be situated within redevelopment

zones identified by the DURF or at least not within the preservation areas proposed by

the DURF.

(d) The Application Site does not form part of the area of a redevelopment project

commenced by URA.

(e) If an application has been declined, re-submission of application for the same site shall

not be made within one year from the date of notification of the rejection of the

previous application by URFS.

(f) For CBS Scheme,

(i) All the CBS(s) in the Application Site have been dissolved.

(ii) All the CBS members have acquired legal titles to their units.

(iii) All the applicants have paid the requisite land premium to the Government of the

HKSAR to remove alienation restriction on their units or have obtained short

term waivers / approvals from Civil Service Bureau (“Waiver”) of the alienation

restriction on their units permitting them to enter into sale and purchase

agreements or such other agreements before payment of the requisite land

premium.

(g) For GBHS,

(i) A letter of modification to modify the Government lease of the Application Site

has been granted to allow transfer of title to individual underlessees.

(ii) All the underlessees have acquired legal titles to their units.

(iii) All the applicants have paid the requisite land premium to the Government of the

HKSAR to remove alienation restriction on their units or have obtained Waiver

of the alienation restriction on their units permitting them to enter into sale and

purchase agreements or such other agreements before payment of the requisite

land premium.

3 May 2016

Part 4. SUBMISSION OF APPLICATION

(a) Owners can submit applications at any time. URFS will process all the applications

received within a calendar month as the same batch which is counted from the date of

the first application in that batch. URFS will notify the public every round of such

one-month collection period via its website.

(b) The application form for the Scheme (“Application Form”) can be collected from

URFS’s office or downloaded from URFS’s website. Applicants are required to

jointly submit the duly completed and signed Application Forms and provide the

relevant information to URFS. Interested owners can contact URFS to arrange for

briefings to explain the details about the Scheme and to provide guidance for filling of

the Application Forms.

(c) The owners shall ensure that the application requirements stated in Part 3 above have

been satisfied before submission of the application. Owners whose units are subject to

alienation restriction clause shall attach copies of the Waiver to the Application

Forms. Owners who have paid the requisite land premium for removal of the

alienation restriction on their units shall attach copies of documentary proof of such

payment to the Application Forms.

(d) The owners shall nominate a coordinator (‘the Coordinator”) and provide his/her name

in the Application Form. The Coordinator shall be an owner-applicant. More than

one Coordinator can be nominated. URFS may contact the Coordinator(s) for

arranging building conditions inspection, obtaining further information or seeking

clarifications of the information provided in the Application Form and other matters

concerning the application.

(e) In order to inform all the owners in the Application Site, the Coordinator should

obtain sufficient copies of the Facilitating Services (Pilot Scheme) Posters and

Notification Letters from URFS, post up the Poster in a conspicuous place in the lobby

of each individual building within the Application Site and insert copies of the

Notification Letters into the letter boxes of all the owners. If the Coordinator has

other means to inform the owners, he/she should specify the method(s) already

adopted/to be adopted in the Application Form.

(f) If owners have submitted an application under the Demand-led Redevelopment

Project (Pilot Scheme) of URA and / or the scheme for CBS buildings of Hong Kong

Housing Society (“HKHS”) and such application(s) is still being processed, the

owners should first withdraw such application(s) prior to submission of an application

under the Scheme. After receipt of the application, URFS will check with HKHS

whether the same site is under the application of HKHS’s scheme.

(g) If the Application Site is found to be duplicating with the sites included in other

applications under the Scheme, URFS will require all the Coordinators of the

applications concerned to reply in writing within a specified time as to their choices of

which application is considered as the final application to be submitted. If URFS does

not receive any written reply from the Coordinators within the specified time, all the

purported duplicate applications might not be considered by URFS.

4 May 2016

Part 5. SELECTION OF APPLICATION AND COMMENCEMENT OF PROJECT

(a) In deciding whether to select a particular application for further processing, URFS will

consider:

(i) whether all the application requirements stated in Part 3 above have been

satisfied;

(ii) the available manpower and financial resources of URFS at the relevant time; and

(iii) other relevant factors including but not limited to building conditions, planning

considerations, financial viability, property ownership structure and project

implementability.

(b) The Coordinator(s) will be notified by URFS in writing of the outcome of the

application within 3 calendar months from the date of receipt of the duly completed

and signed Application Forms.

(c) For an application which has been selected for further processing, URFS will enter into

a Facilitation Agreement with each of the applicants and each of the other owners in

the Application Site who participates subsequently. The Facilitation Agreement will

detail the rights and obligations of URFS and of the owner who has signed the

Facilitation Agreement.

(d) The selected application will become a facilitation project (“Facilitation Project”) once

the percentage of undivided shares of the owners signing the Facilitation Agreements

reaches 50% Note 1

. URFS will advise the applicants in writing the date of

commencement of the Facilitation Project (“Project Commencement Date”).

(e) If however the percentage of undivided shares of the owners signing the Facilitation

Agreements cannot reach 50% Note 1

within 1 calendar month from the date of the

written notification mentioned in Part 5(b) above, URFS will not process the

application further and all the signed Facilitation Agreements will be terminated.

5 May 2016

Part 6. JOINT SALE OF PROPERTY INTERESTS

Key Milestones

(a) The commenced Facilitation Project will have to be aborted if any of the following Key

Milestones cannot be reached:

(i) Within 9 calendar months (or a longer period of no more than 12 calendar months

if the number of units Note 2

in the Application Site exceeds 100 subject to absolute

discretion of URFS) from the Project Commencement Date, the percentage of

undivided shares of the owners signing the Facilitation Agreements shall reach the

Joint Sale Threshold*.

(ii) Within 5 calendar months from the date of reaching the Key Milestone mentioned

in Part 6(a)(i) above, the percentage of undivided shares of the owners signing a

Joint Sale Agreement shall reach the Joint Sale Threshold* and the auction or

tender for joint sale shall be conducted.

*Joint Sale Threshold

The Joint Sale Threshold for a particular lot is defined as:

(A) 90% of the undivided shares Note 1

; or

(B) 80% of the undivided shares Note 1

if:

(I) each of the units Note 2

on the lot represents more than 10% of all the

undivided shares in the lot (for the purposes of the class of lot referred to

herein, if (a) a unit in a building is subdivided into 2 or more units on or

after 1 April 2010; and (b) the subdivision does not involve (i) any

alteration to the size of any common area of the building; or (ii) any change

in a person’s liability in relation to the common areas and facilities of the

building under the common law or any enactment, those units are regarded

as one single unit); or

(II) each of the buildings erected on the lot was issued with an occupation

permit at least 50 years before the Project Commencement Date.

(b) Subject to URFS’s absolute discretion, the owners may be allowed one opportunity to

put up the assembled interests for joint sale even if the Joint Sale Threshold cannot be

reached.

6 May 2016

Joint Sale by Auction or Tender

(c) Owners who have signed the Joint Sale Agreement (“Participating Owners”) shall sell

their property interests jointly subject to a reserve price and shall share the sale

proceeds among themselves in accordance with a schedule of agreed sharing ratios. An

independent valuation consultant will be appointed by URFS on behalf of the

Participating Owners to assess the reserve price and sharing ratios.

(d) Property interests covered by the Joint Sale Agreement will be sold in an auction or by

tender to the purchaser offering the highest bid which attains the reserve price. The

auction or tender shall be conducted within the 5-month period mentioned in Part

6(a)(ii) above.

Part 7. UNITS SUBJECT TO ALIENATION RESTRICTION CLAUSE

(a) Under the alienation restriction clause, owners of units are not permitted to sell, assign,

mortgage, charge, underlet, or part with possession of, or otherwise dispose of their

units, or enter into any agreement for such purposes.

(b) Owners whose units are subject to alienation restriction clause (“Owners with

Restrictions”) shall obtain the Waivers prior to enter any agreements with URFS

including Facilitation Agreement and Joint Sale Agreement and the validity of the

Waivers shall cover the entire project period.

(c) Owners with Restrictions shall pay the requisite land premium to the Government of

the HKSAR to remove the alienation restrictions upon successful joint sale. The

detailed arrangement of the same may be provided in the Joint Sale Agreement.

Part 8. WITHDRAWAL / TERMINATION

(a) The owners may withdraw from the Facilitation Agreements at any time prior to their

signing of Joint Sale Agreement.

(b) The Facilitation Project will be aborted and the signed Facilitation Agreements and

Joint Sale Agreement (if any) will be terminated if any of the Key Milestones

mentioned in Part 6 above cannot be reached or when the joint sale by auction or

tender is not successful (such as no one offers a bid or the reserve price is not met).

7 May 2016

Part 9. FEES AND EXPENSES

(a) No fee needs to be paid to URFS for submission of the Application Form.

(b) On behalf of the owners, URFS will engage related consultants (including but not

limited to solicitor, valuation and property agency consultant) to provide services to the

owners in the process of reaching a joint sale. The full amount of consultancy fees and

related expenses incurred in the process up to completion of sale of units (“Total Fee”)

shall be paid by the owners. The owners shall pay their respective shares of the Total

Fee upon signing of the Facilitation Agreements. Computation of the payments by

individual owners shall be as follows:

URFS will decide on the amount of the Total Fee.

If a site consists of two or more lots, the Total Fee will firstly be shared among the

lots based on the lot size.

The portion of the Total Fee shared by a particular lot will then be shared among

the owners based on the number of units Note 2

they own in the lot.

(c) If a Facilitation Project fails after the signing of the Facilitation Agreement(s) for

whatever reasons, the owners who have signed the Facilitation Agreements will

recover parts of their payments that have not been expended, if any, in proportion to

their payments for the Total Fee.

(d) Owners who decide to withdraw from the Scheme on their own accord at any time will

not be eligible for a refund of any payment.

(e) Upon successful joint sale of property interests by auction or tender, a service fee of

1% of the sale proceeds derived from the joint sale will be charged by URFS from

Participating Owners. At the same time, the payments under Part 9(b) will be refunded

by URFS from the 1% service fee received. URFS will also charge the purchaser 1%

of the sale price as service fee.

Note 1: To be computed in the same manner as described in Part 3(a).

Note 2: “Unit” means any premises that are described by reference to a specific number of undivided shares in a lot

in any instrument registered in the Land Registry.

.

8 May 2016

Facilitating Services (Pilot Scheme) – Procedures

Application Received

Assessment & Selection

Not Selected

Notification to Applicants

Selected

Notification to Applicants

≥ 50% Undivided Shares of Owners

Signed Facilitation Agreements

NoYes

Project

Commencement

≥ 90% (or 80%*) Undivided Shares of Owners

Signed Facilitation Agreements

Yes No

≥ 90% (or 80%*) Undivided Shares of Owners

Signed Joint Sale Agreements

Auction/

Tender

Application

Declined

Project Aborted

Yes No Project Aborted

Application

Declined

Within 3 Months

Within 1 Month

Within 9 Months #

Within 5 Months

* Please refer to Part 6 of the Pamphlet

# Or a longer period of no more than 12 calendar months if the number of units exceeds 100 subject to absolute

discretion of URFS

9 May 2016

Appendix A

(Page 1)

FOR ILLUSTRATION PURPOSE ONLY

Examples on calculation of ownership of not less than 50% of the undivided shares in

each lot of the Application Site

Example 1: If the Application Site consists of one single building and one lot only,

applicants shall own not less than 50% of the undivided shares in that lot.

Example 2: If the Application Site consists of only one single building which is situated

on 2 or more lots, applicants shall own not less than 50% of the undivided

shares in each individual lot.

Example 3: If the Application Site consists of more than one building which is situated on

2 or more lots, applicants shall own not less than 50% of the undivided shares

in each relevant lot(s) on which each individual building is situated.

One building

≥ 50%

One lot

Two lots

One building

Each lot ≥ 50%

Two lots

Two buildings

≥ 50% ≥ 50%

Each lot to be

assessed

separately

10 May 2016

Appendix A

(Page 2)

Example 4: If the Application Site consists of more than one building which is situated on

2 or more lots and one building is connected to another building by a common

staircase, applicants shall own not less than 50% of the undivided shares on

average in the lots on which the buildings stand.

Remarks: The above examples are for reference only. Part 3(a) in the Pamphlet and

URFS’s decision shall prevail.

Common staircase

Two buildings

Two lots

Two lots to be

assessed on

average

Average ≥ 50%

11 May 2016

This pamphlet is issued for the purpose of general reference only. The

information contained herein is with reference to the principles and

practice of URFS prevailing at the date of issue of the pamphlet. It shall

not constitute any representation on the part of URA or URFS or give

rise to any expectation whatsoever and shall not be relied on as such.

Each application will be considered on its own merits having regard to

all factors and circumstances. URFS has absolute discretion in

reviewing the principles stated herein from time to time and reserves its

right to add to, amend or delete the whole or any part of this pamphlet.