A land research group say they have discovered at least 9,878 village houses in the New Territories built after a suspected illegal transfer of land rights. The number represents almost a quarter of the total number of small houses in Hong Kong.

The Liber Research Community have published a database of suspicious properties. They examined each property to see whether they were in a village development zone, contained more than three blocks, were three storeys high, shared a similar architectural style, featured an outside wall, and included an estate name and estate management. The researchers considered that houses with such features should originally belong to villagers, but had instead been sold to developers for profit.

Under the Small House Policy, male indigenous villagers who are descendants of a male line from a recognised village may apply to build a small house of up to three storeys high, on either their own land at zero premium or on public land through a private treaty grant, once during their lifetime. However, the right is non-transferable. It is a criminal offence to sell the rights to developers.

Paul Zimmerman Chan Kim-ching Tanya Chan Brian Wong
Paul Zimmerman, Chan Kim-ching, Tanya Chan and Brian Wong and the launch of the report. Photo: HKFP/Kris Cheng.

The researchers said the situation was the most serious in Yuen Long – 4,495 houses were built in a suspicious manner, according to an unnamed source working in the industry. It was followed by 1,864 suspect properties in the Tai Po district and 1,205 in North district. The houses took up 224 hectares of land – more than 11 times the size of Victoria Park – according to the researchers.

Since land is scarce and the cost of building small houses has been rising, those who do not have enough resources may decide not forgo building small houses themselves, and work with developers instead.

‘Just as guilty’

In December 2015, 11 indigenous villagers from Sha Tin were jailed for up to three years for illegally transferring their land rights to developers, and the High Court ruled that indigenous villagers were just as guilty as developers in an illegal land rights sale for conspiracy to defraud. However, the researchers found that similar transfer of rights of building of small houses were still going on as of October 2017.

“These houses were not for the indigenous villagers’ personal needs – this is a collective behaviour, it could be involving ten, dozens, or even over 100 houses being built together,” said researcher Brian Wong. The area with the highest density of such houses was at Hang Tau village in Sheung Shui, where there were 299 small houses on 27 estates.

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Wong said in each of the four steps to transfer the rights – from sub-dividing land lots, issuing a building license, issuing a certificate of compliance, to the removal of restrictions on sales – the Lands Department could easily recognise suspicious transfer activity and stop it.

small house
Suspected new small house estate on Tung Tsz Road in Tai Po which two blocks share the same wall. Photo: Screenshot.

Small house estates

According to their research, four of the five largest “small house estates” were constructed by well known developers or companies. They said that, among the 70 per cent of houses where the illegal transfer of rights was suspected, up to 30 per cent of them were built by mid-size developers. Each of the firms were related to the top four developers in the city, many of which own land zoned for villages.

Researchers also noted that, although each small house should comprise of a single block, there were instances whereby two small houses shared a wall. It meant the two houses could be connected to to double the size and create a 4,200 square feet house.

“We can even see ads in newspapers promoting small houses of 4,200 square feet [where] buyers can split it in whatever ways they like,” Wong said. “This is very common… especially near Clear Water Bay in Sai Kung.”

Wong also said that the trend of suspicious land transfers was spreading to land close to country parks. In November last year, the High Court ruled that the Town Planning Board must reconsider plans to rezone three country park enclaves for small house development, because the government accepted unrealistic projections showing demand from villagers.

Wong said these instances showed that the Small House Policy had strayed from its original intention, whereby villagers could only sell the houses if they have had serious economic difficulties.

small house
Suspected cases of small houses built after illegal transfer of land rights. Photo: Screenshot.

The researchers suggested that the government should reinstate checks on villagers’ economic situations so that sales could only be approved afterwards. The authorities should also increase the number of Lands Department officers, which currently stands at 113. A condition in the statutory declaration for villagers whereby they declare they will not sell their rights to other people or developers should also be reinstated, they said.

“A former government land executive told us that… if they enforce the rules strictly, it may anger some indigenous people… and village chiefs can block them from entering the villages,” Wong said. “Sometimes government departments will avoid conflicts.”

They also suggested that in the longer term, the government could investigate past cases and refer to its previous actions in 1977 and 1978 to halt the approval of small houses in areas with serious issues with illegal land transfers.

The researchers will submit the report to the government this week and urge action.

Small houses
Small houses in Kwu Tung. File Photo: GovHK.

District Councillor Paul Zimmerman, who is CEO of the group Designing Hong Kong, said small houses were a “very inefficient land use.”

“Village development is very environmentally unfriendly,” he said. “They are exempted from many regulations, they have no sewage… these are inappropriate buildings, most of them have no road access, so people build their own roads. 60 per cent of all the roads in New Territories have been built illegally.”

He said in some cases, houses were sold at the same price – below market value – on the same day, with the same finance company: “Shouldn’t you be suspicious?”

“[The] Lands Department can do much more in terms of investigation… They can look at the transaction in land, they can look at how it’s financed, they can go to the Immigration Department and say, ‘what’s the immigration record of the applicant? – Ho! He doesn’t spend any time in Hong Kong.”

Civic Party lawmaker Kwok Ka-ki said the problem has been pointed out by a government audit report in 1987, and the government including Chief Executive Carrie Lam – who was in charge of land development – failed to deal with the issue.

Kwok Ka-ki
Kwok Ka-ki. Photo: In-Media.

“There is no reason to believe that a veteran civil servant who has been an official for 37 years does not know how to push her staff to enforce the law,” Kwok said.

Kris Cheng is a Hong Kong journalist with an interest in local politics. His work has been featured in Washington Post, Public Radio International, Hong Kong Economic Times and others. He has a BSSc in Sociology from the Chinese University of Hong Kong. Kris is HKFP's Editorial Director.