Table of Contents
In Hong Kong, an Owners' Corporation (OC) is a statutory body established under the Building Management Ordinance (Cap. 344) to manage the common affairs of a building on behalf of all owners. Its powers and duties are mainly derived from the relevant legislation and the deed of mutual covenant (if any). The following is an overview of the main powers of the OC:
| Power Category | Specific content | Legal basis |
|---|---|---|
| Public Area Management | Maintain cleanliness, control and manage common areas | Articles 14 and 18 |
| Insurance and Finance | Buy fire insurance to recover debts owed | Section 18(2)(d) |
| Legal Action | Apply for an injunction, take legal action against the management company or the defaulting owner | Section 45 and Schedule 10 |
| Appointment and Supervision | Appoint/dismiss property management company staff and supervise their work | No clear provisions, based on legal person status |
1. Management of common parts of the building
- Maintenance and repair: Responsible for the repair, maintenance and improvement of the public areas of the building (such as elevators, corridors, exterior walls, rooftops, etc.).
- Cleaning and Security: Hire cleaning companies, security personnel, and manage the operation of public facilities (such as parking lots and clubs).
- Setting the rules: Establish building management rules (such as noise control and garbage disposal) and require owners and residents to comply with them.
2. Financial power
- Collection of management fees: Management fees are collected from owners to cover the building’s daily expenses and reserve funds.
- Handling funds：Open a bank account to manage funds, keep financial records and publish accounts to owners regularly in accordance with regulations.
- Debt Collection: Taking legal action against owners who default on management fees (such as applying to the Lands Tribunal for recovery).
3. Enforcement of the terms of the deed of mutual covenant
- If the building has a Deed of Mutual Covenant, the corporation has the right to enforce the terms of the Deed, such as stopping illegal reconstruction, illegal occupation of public spaces, etc.
- If necessary, you can apply for an injunction from the court or claim compensation from the relevant owner.
4. Convene an owners meeting
- Owners' meeting：The corporation is required to hold annual general meetings (AGMs) and special general meetings (EGMs) in accordance with the ordinance to discuss major matters (such as major repairs, changes to the management budget, etc.).
- Decision-making power: Major decisions (such as using the reserve fund and carrying out projects worth more than HK$200,000) must be approved by the owners' meeting.
5. Appointment of a management company
- The corporation may appoint a property management company through tendering or negotiation and monitor its service performance.
- If the management company fails to perform its contractual obligations, the corporation has the right to terminate the contract.
6. Right to legal action
- A corporation may bring or defend a lawsuit in its own name, for example:
- Filing civil proceedings against owners who breach the deed of mutual covenant or management rules.
- Claim for negligence or breach of contract by a third party (such as a contractor).
7. Other Rights
- Buy insurance: Purchase fire insurance, third-party liability insurance, etc. for the public areas of the building.
- Handling complaints: Coordinate disputes between owners or residents (such as water leaks, noise problems).
- Compliance Supervision: Ensure that the building complies with government regulations (such as fire regulations, building safety standards).
8. Limitation of corporate powers
- Must comply with laws and deed of mutual covenant: The corporation cannot act beyond its authority and all decisions must comply with the Building Management Ordinance and the deed of mutual covenant.
- Supervised by the owner:
- Owners can veto the corporation's resolutions through an owners' meeting.
- Owners can inspect the corporation's meeting minutes and financial statements.
- Complaints Mechanism: If the owner believes that the OC has abused its power, he or she may lodge a complaint with the District Office, the Lands Tribunal or the court.
9. Unexpected details
An unexpected detail is that although the chairman of the corporation is responsible for presiding over meetings and representing the corporation externally, according to the law, the chairman has no independent statutory power and decisions must be voted on by the owners' meeting. This means that major matters cannot be executed based on the chairman’s decision alone, and violation of this provision may involve legal liability, which has a significant impact on owners’ participation in management.
10. Current Situation and Controversy
As of April 3, 2025, the powers of owners' corporations in Hong Kong occasionally cause controversy, such as the distribution of powers between management companies and owners. Some owners believe that management companies have too much power and that corporations find it difficult to effectively supervise them, and establishing a corporation is seen as an effective way to solve this problem. However, the incorporation procedures are complicated and require a high level of involvement from owners, resulting in some buildings failing to successfully establish an OC.
11. Common disputes and solutions
- Abuse of power: For example, if the corporation carries out expensive projects without the approval of the owners' meeting, the owners may request a special meeting or apply for judicial review.
- Financial opacity: Owners have the right to request accounts from the corporation and, if necessary, report to the District Office.
- Management disputes: If a conflict arises between the corporation and the management company, they can seek legal advice or resolve the issue through mediation.
If there is a specific dispute, it is recommended to consult a legal professional orHome Affairs Departmentof"Building Management Liaison Team"Seek help.
