What is the Value Proposition of the Design, Disposition and Height Clause?

November 2012

HKIS Surveyor Times

What is the Value Proposition of the Design, Disposition and Height Clause?

There have been concerns amongst practitioners in the private practice that the administration of the Design, Disposition and Height clause in new land grants has caused significant delays in the development process. This in turn has delayed the supply of flats to the market.

A discussion forum titled “The Design, Disposition and Height (DDH) clause: the administration, the reality and the future?” (“Forum”) was held by the General Practice Division of the Hong Kong Institute of Surveyors on 3 July 2012.  Panelists included Mr. K L Leung, Mr. Vincent Ho, Mr. Alnwick Chan and Mr. Eric Yeung and I acted as the moderator.  Over 100 members attended the Forum.

The Chief Executive announced 10 measures to speed up housing supply on 30 August 2012. One of them was that the Lands Department (LandsD) would speed up the processing of pre-sale consent applications. The DDH approval is a very important part of this process.

This paper attempts to examine the intention of the DDH clause, the practice of its approval and the possible causes for delay.  Then I would argue that the current administration practice of the DDH approval needs to be changed in a way to avoid duplication and details, in the light of the statutory approvals under the Buildings Ordinance and the other definitive terms and conditions of the land grant.

How should the DDH Clause be interpreted?   

The usual drafting of the DDH clause would take the following form: “The design, disposition and height of any building or buildings erected or to be erected on the lot shall be subject to the approval in writing of the Director”. Where there is height restriction under the land grant, then height will be deleted from the DDH clause. Before approval of DDH clause obtained, no building works shall be commenced on the lot. Building works as defined in the Buildings Ordinance do not include demolition works or site formation works.

By referring to the Concise Oxford Dictionary, the two words “design” and “dispose” can have the following meanings:

Design means a preliminary plan, sketch or concept for the making or production of a building.

Dispose means “place suitably or in order”.

The literal meaning of the clause would mean that the Director of Lands should look at the preliminary plan, sketch or concept for the making of a building and whether the building is placed suitably on the site. If this approach has been taken, then the various issues of delay as identified below will all go away.

The DDH approval is intended to be made available early in the development process, before building works commenced. Thus it should not be looking at the details of the development scheme but just the design and disposition of the building(s).

How is the DDH Clause administered in current date?   

As revealed in the discussions in the Forum, applications for DDH approval normally would take much longer time than that specified in the performance pledge of the LandsD. The performance pledge of the LandsD in 2011 – 2012 sets out that the processing time of general building plans (GBPs) by District Lands Office (DLO) are 8 weeks and 10 weeks for Non-Building Committee III cases and Building Committee III (BC III) cases respectively.

What is BC III then? The function and composition of BCIII was noted in the Audit Commissioner’s Report Concerning Development of a Site at Sai Wan Ho, 2005. BC III is responsible for the consideration of building plans, master layout plans and routine building matters. It is chaired by the Deputy Director of Lands/ Specialist and includes members from Architectural Services Department, Buildings Department, Highways Department, Transport Department, Planning Department, Senior Estate Surveyor from Building Plan Unit (BPU).

According to Land Administration Office Practice Note No. 5/2002, Non-BC III Cases include Zone 1 (Denisty Zoning) straight forward cases, normal industrial/ godown cases, normal electricity substation cases, hoarding plans, site formation plans, landscapign plans, drainage proposals and NT exempted houses.  BC III cases should then mean the remaining cases that do not fall under the definition of Non-BC III cases.

The following four major issues have been identified as the causes for delay.

  1. Information required to facilitate processing

DLOs will only process the GBPs submission from the date of valid receipt of the submission (i.e. no outstanding information required to be submitted by the Authorized Person (AP)).  There are four Practice Notes published by the Lands Department to provide guidance to practitioners on the processing of GBPs, Master Layout Plan and Landscaping Plan namely

  • LAO PN 1/1994: Processing of General Building Plans under Lease Conditions,
  • LAO PN 1/1999: Design, Disposition and Height (DDH) Clause under Lease Conditions,
  • LAO PN 5/2002: Processing Time for Master Layout Plan, General Building Plan and Landscaping Plan &
  • LAO PN 7/2006: Processing of General Building Plan Submission.

What would be the information required by the DLOs for the DDH approval then, apart from those required under the GBP submission under the Buildings Ordinance?

The GBP is a full set of development plan. It must contain much more information than “a preliminary plan, sketch or concept for the making or production of a building”.

It is not uncommon to find that DLOs would have to spend extra time in asking APs for submitting additional and/or missing information before the submission could be processed.

  1. DDH clause – a wide and vague clause?

What does the landlord wish to achieve then apart from those issues covered in the Buildings Ordinance, Town Planning requirements and the definitive terms and conditions in the land grant?

LAO PN 1/1999 has identified aspects that would generally be considered by the LandsD for DDH approval, including site coverage, headroom, building height, carparking provision.

But what are the details?  How could practitioners know that they can comply with this DDH clause?  For example, what would be the height of a floor be considered as excessive headroom and then the relevant floor area be double counted for GFA.

There are other building elements/design like roof top structures, voids, number of swimming pools and large flat roof, etc which accountability of gross floor area under the government lease have caused difficulties in the past.

With the developers (including the professional team) as the lessee to the land grant , changes made/to be made from time to time by the Government with the landlord’s hat on need to be seen and considered as sensible and fair to the lessee.  These changes should be announced so that the affected persons could be made aware of the same before they purchased the lands from the government. Practitioners, without proper guidance available in the public domain could only learn by trial and error – which could be costly anyway.

How can new comers invest confidently in HK property market if the rules and regulations are not transparent?

If the LandsD has internal guidelines for their staffs for the processing of such building plans for this purpose, then such guidelines should be made public as appropriate.  If the LandsD wishes to control certain development aspects like no. of private swimming pools and the maximum headroom of residential floors etc, then these should be spelt out in the land grant or announced by say a practice note.

And it is worth consideration of setting up an independent appeal system for DDH approval to provide a channel for settling dispute the landlord and the tenant developers.

The above suggests that LandsD has gone into too much detail.

  1. Different interpretation of development control parameters

The interpretation of various development parameters by the LandsD could be quite different from the Buildings Department (BD) and the Planning Department (PlanD).

Joint Practice Note No. 4 last published in January 2011 has briefly explained the practices of these three departments on some common development control parameters.

One example is the interpretation of building height: the LandsD measures it from the lowest formation level up to the top of the highest roof slab whereas the BD measures it from the mean level of the lowest street to the mean height of the roof.

Another example is flat roof area: flat roof is not accounted for GFA purpose by the BD but the same could be accounted for GFA purpose by the LandsD.

 

  1. Duplication of Work within the Lands Department

Duplication of work for building plans approval can happen. Some of the BC III cases which have already been considered by BPU may pass back to DLO for handling.  Even if the AP has addressed BPU’s comments in the revised plans, DLO would check the whole set of resubmission plans again to ensure all things in the plans are in order.  DLO therefore not only handled the non-BC III cases, but also follow up some of the BC III cases.  Yet, DLO with limited staff resources is not specialized in plan processing like BPU and would need longer processing time for clarification with BPU and for detailed checking.

The Way Forward  

If the LandsD could focus upon the design (i.e. preliminary plan, sketch and concept) and disposition of the development on the site rather than the details of the GBP, then the processing time and resources required for DDH approval would be much reduced.

The efficiency of the approval process could be enhanced if the LandsD would be prepared to act upon the following:

  • publish guidelines for DDH approval in the form of practice note and regular update
  • adopt consistent interpretation with the BD and the PlanD on development parameters under new land grants
  • centralize all DDH approval at BPU
  • approve the resubmission plans without checking the whole set of revised plans again, if the AP has addressed BPU’s comments and promised that no other changes made in the resubmission.

This above practice if adopted would facilitate property developments in Hong Kong and speed up the supply of flats.

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