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Illustration: Victor Sanjinez

Exclusive | Exposing Hong Kong’s invisible land grab: why homeowners have few qualms breaking rules to build add-ons to luxury homes

  • In upscale communities and largely out of the public eye, mansion owners are suspected of adding millions of dollars in value to their homes with unauthorised structures
  • Lax enforcement, anaemic fines and tremendous financial rewards for rule-breakers have allowed the problem to fester, but experts say there is much the government can do
Having paid a high price for their property, some homeowners have every incentive to build unauthorised additions to their houses knowing enforcement can be lax. In the first of a two-part series, Jeffie Lam and Edith Lin investigate this deep-rooted problem that previous administrations failed to tackle. Read part two here.

Fei Wan Road, or Flying Cloud Street in Chinese, is a cul-de-sac nestling between Fei Ngo Shan and Clear Water Bay roads on the way to Kowloon Peak. Here, the roads live up to their names, offering breathtakingly unobstructed views of urban Hong Kong and the misty blue sea.

In the evenings, residents and helpers walk their dogs along the short street in the quiet neighbourhood of Flamingo Garden boasting rows of tidy white houses on either side, each costing as much as HK$71.8 million (US$9.18 million).

Why Hong Kong can’t seem to go after homeowners with unauthorised structures

Until late last year, most of these houses hid a secret. Beyond the facade, homeowners had built what appeared to be unauthorised extensions on government-owned land.

Unauthorised structures are considered works that have been carried out without prior approval or consent from the Buildings Department. Examples include constructing a new extension to an existing building and adding rooftop structures.

Flamingo Garden Block B at Clear Water Bay. Photo: May Tse

A Post investigation found these structures were made without formal approval from authorities. Suspected unauthorised structures were seen in most of the 16 houses in Block B of Flamingo Garden.

Up to 12 out of 16 houses, each with a floor area of 2,496 sq ft, were found to have encroached on public land. Among them, unauthorised structures of indeterminate size were seen outside the boundaries of 11 houses, the Post found.

It took an unprecedented burst of inclement weather last September for the city to be jolted into realising the problem of such unapproved works had not gone away despite it surfacing more than a decade ago.

On Kowloon Peak, record-breaking black rain lashing the city that fateful day did not dislodge hilly slopes, but in the south of Hong Kong Island, the flash floods it unleashed caused a massive landslide. And a similar secret of wealthy homeowners there was laid bare.

The Redhill Peninsula incident is an alarm bell for the government
Brian Wong, Liber Research Community

The debris of falling rocks and mud posed safety risks while exposing rampant disregard of building laws at Redhill Peninsula, a luxury estate in Tai Tam.

Suspected additions absent from approved building plans, including multistorey structures and basements, were found in four of these seaview houses on government slopes and residents were forced to evacuate. In the end, at least 69 of 85 other coastal houses were found to have similar add-ons following authorities’ inspection.

Other than those in Redhill Peninsula, the Development Bureau told the Post that it had inspected 270 detached houses between last September and December.

Such land encroachment activity, however, is not confined to Redhill Peninsula.

Checks and interviews with engineers and surveyors reveal that it is common in upmarket estates across Hong Kong because of anaemic enforcement and emboldened owners.

An investigation by the Post into three of these luxury estates, including Flamingo Garden, which involved comparison of video footage, government maps and building plans, found that 74 per cent of the houses surveyed had occupied government lands without approval and about 90 per cent had suspected unauthorised structures.

Apart from the safety risks posed by such unapproved works and made worse by climate change, the practice is a brazen land grab in space-starved Hong Kong. The cases have renewed concerns over equity and fairness when these owners can essentially boost the value of their properties at minimal cost while openly flouting the law.

Hong Kong may lower prosecution threshold for illegal structures, raise fines

Brian Wong Shiu-hung, a member of the Liber Research Community, an NGO focusing on land issues, described the phenomenon as an “endemic” problem in the high-end property market, pointing to the low-risk, high-return investment for owners, given the rare and lenient law enforcement actions in the past.

“Property prices in Hong Kong are so high that the owners have all the reasons and incentives to extend out of the boundary and build additional bunkers,” he said. “The risk of being prosecuted or being taken account of is so low that they seem to have forgotten that it is an illegal act.

“The Redhill Peninsula incident is an alarm bell for the government to reconsider and focus on other areas that have been ignored in the past decades.”


Landslide reveals illegal basements under luxury Hong Kong homes

Landslide reveals illegal basements under luxury Hong Kong homes

The Post’s investigation

In one extreme case, a house at Seaview Villas in Tai Po overlooking the scenic Tolo Harbour appears to have additions far bigger than the approved property plans.

A massive two-level structure topped with a well-decorated, crescent-shaped lawn was spotted beneath the house, expanding all the way beyond the official boundary and yielding an area several times bigger than the original floor area of the building itself.

Multiple windows and air conditioners can be seen on the wall of what appears to be a basement.

Seaview Villas in Tai Po Kau. Photo: May Tse

“It is an incredible mission for them to complete it,” said veteran structural engineer Ngai Hok-yan as he inspected the Post’s footage of the house. “It is not a house any more. It’s like a castle.”

In a recent listing, one of the houses in the estate was marked for sale at HK$50 million.

Over on the southern tip of Hong Kong Island, atop Red Hill, a summit surrounded by waters from three sides where the troubled Redhill Peninsula is located, is Villa Rosa.

Various degrees of suspected encroachment of government-owned slopes were seen at 11 of 16 houses by the Post, at least doubling the original size of the gardens if not more. At least 13 of them were seen to have unauthorised additions.

Villa Rosa in Tai Tam. Photo: May Tse

Ngai said the extra structures located by the Post at these houses were likely to be unauthorised, given the developers would already have maximised the plot ratio of the estates – the development density permitted under planning rules – during the design stage.

“So for an individual owner, they may not have any further residual plot ratio to add further areas,” he said.

Additional structures without professional scrutiny were also bound to affect the stability of the natural slope and might be subject to surface erosion or extensive landslides during heavy rain, he added.

Liber Research Community member Brian Wong has pointed to the low-risk, high-return investment for owners, given the rare and lenient law enforcement actions in the past. Photo: Jonathan Wong

Vincent Ho Kui-yip, a veteran surveyor, said altering government slopes, which might not have been treated or retained substantially after the buildings were completed, would impose a “huge danger” to the buildings and adjacent properties.

Extra structures would create additional loading pressure on the houses and the consequential impact could be hazardous if the add-ons went beyond the bearing capacity of the original buildings, he warned.

“If they extend more space and have features like swimming pools, then it would add extra weight to the buildings and to their original foundations,” he said, pointing out the risks could be made worse in light of the escalating frequency of extreme weather.

Many of the people accused of owning illegal structures are the ruling class itself
Brian Wong, Liber Research Community

The practice of adding on to luxury homes without authorisation is not new, and in the past high-level officials found themselves in trouble after being exposed of the transgression. Each time, however, the problem would recede from public memory and homeowners continued getting away with it.

In 2012, the discovery of an illegal 2,300 sq ft basement – reportedly replete with a wine cellar and a Japanese bath – in former chief secretary Henry Tang Ying-yen’s home in Kowloon Tong eventually cost him his election bid for the city’s top job.

In 2018, then secretary for justice Teresa Cheng Yeuk-wah and her engineer-husband were also found to have 10 illegal extensions at adjoining houses in Villa de Mer, Tuen Mun.

It was estimated that the structures which altogether added up to 1,800 sq ft would be worth HK$35 million, based on the value of her husband’s home when he bought it in 2012. Cheng has a law and an engineering degree and once co-wrote a book on construction law.

4 homeowners in Hong Kong luxury estate face court over illegal structures

The rich getting richer

Following the Red Hill controversy, authorities have been accused of turning a blind eye to the rich and focusing only on easy targets.

Development minister Bernadette Linn Hon-ho conceded the government had in the past prioritised efforts on unauthorised structures in densely populated urban areas that could pose a higher risk to the public. She pledged to step up checks on more detached homes in the wake of the Red Hill landslide, especially the seaview units on slopes.

Liber Research Community conducted research soon after the scandal and located at least 173 luxury residences across the city that were suspected of illegally occupying land not belonging to them.

Wong, the researcher with the group, argued it was time for the government to reset its priorities, not only for safety’s sake but also to send the right signal to society.

“If you compare these cases to what we’ve seen in the urban areas, you can immediately make sense that it is much more severe than the ordinary – the canopies and the little extensions on urban buildings,” he said.

Luxury homeowners, he noted, had the means to handle their cases, such as hiring legal representation or engaging contractors, compared with other regular flat owners, and accused the government of having “inertia” in dealing with the rich.

“Many of the people accused of owning illegal structures are the ruling class itself,” he said. “There is some kind of differential treatment between the luxury villas and other parts of Hong Kong.”

Redhill Peninsula in Tai Tam. Photo: Yik Yeung-man

Lawmaker Tony Tse Wai-chuen, who represents the architectural, surveying, planning and landscape sector, said luxury homeowners often took advantage of the public inaccessibility of their residences to build unauthorised add-ons without fear of attracting attention.

To truly eradicate the problem, authorities must demand homeowners who were involved in illegal building structures to pay a fine that correlated with the value of their residences, he said.

Despite their legal risks, however, properties with illegal additional features remain sought-after in the market.

Owners pursued the opportunity to make a hefty profit, which would more than cover the construction cost of the unauthorised additions, while some buyers hoped to enjoy a larger living space on the cheap, according to James Cheung King-tat, executive director of Centaline Surveyors.

Authorities find many Hong Kong luxury homes in Tai Tam not complying with law

He observed that buyers factored in the risk of getting caught by building authorities when they negotiated prices with owners.

“Some will offer a price that ignores the extra value brought by illegal structure and occupied land or they may even ask for a price deduction for future restoration works,” he said.

“Another type of buyer is willing to pay for them but will request a discount on these areas, let’s say half of the property price per square foot. Some may also ask the owner to reserve a sum for restoration.”

On properties with questionable extensions, Cheung said banks could choose to offer mortgages solely on the authorised parts or reserve a sum in the loan for future restoration purposes, while they could also reject mortgage applications in extreme cases.

The large-scale, habitual encroachment of land by the extremely well-off Hongkongers appears particularly unfair against the backdrop of the city’s acute land shortage. According to recent figures, 215,700 people are still living in subdivided flats, some so small they are notoriously known as coffin homes. About 132,000 households are still in the queue for a public housing flat, a waiting time that now averages 5.6 years.

Hong Kong relaxing rules on illegal home structures not an amnesty: minister

Sze Lai-shan, deputy director of the Society for Community Organisation, an NGO serving the underprivileged, urged the government to step up enforcement action on luxury homeowners who breached the law.

“Luxury residences do not have the urgent need for living space. These additional structures are just making their homes bigger,” Sze said. “I hope the government can be fairer.”

Under current rules, owners with such illegal additions receive in effect a slap on the wrist: they are ordered to remove the add-ons and only failure to comply will incur a penalty. Those who disregard the order face a maximum fine of HK$200,000 and one year behind bars. They can also be fined HK$20,000 for each day they do not adhere to the order.

Authorities are currently working on a proposal to tighten building laws this year, including looking into raising the maximum penalty for breaches, lowering the threshold for prosecuting homeowners found to have illegal structures on their properties and preventing them from dodging their responsibility.

Surveyor Ho said the government should toughen the law to go after homeowners who continued to have unauthorised building structures after a purchase, for example, by making them liable to prosecution or a fine.

The law should also require every buyer to appoint a professional to scrutinise the properties over possible add-ons before transactions could be completed, he suggested.

Liber’s Wong said the revamped penalty must be sufficiently punitive or it would lack the deterrent effect on people “who can afford a little fine”.

Hong Kong ‘serious’ about tackling illegal structures but pragmatism needed: John Lee

It must also be supplemented with a raft of measures, such as an increase in manpower to identify wrongdoers and streamlined prosecution procedures, he suggested.

“The government needs to show its determination to the public that it is dealing with all the cases in every luxurious neighbourhood,” he said.

While industry experts and lawmakers do not expect the problem to be solved in the short-term, the hope this time is that the public’s memory of the unfairness will remain fresh and lead to demands for change. The other option is for cynicism to deepen and the city’s already deep divide between rich and poor to worsen.

Wong agreed. “It is actually a major scandal that affects the image of Hong Kong,” he said.