The Property Management Services Authority (PMSA) is committed to enhancing the transparency of its licensing and regulatory work in respect of the property management (PM) industry. The PMSA has selected a number of complaint cases which are representative, and has provided summaries of these cases as reference for the public and the industry. This aims to enable the public and the industry to better understand the work of the PMSA, the common types of complaints received, as well as the principles adopted by the PMSA in handling complaints and making regulatory decisions. The PMSA encourages licensed property management companies and property management practitioners to draw reference from these cases, and work together to drive the continuous development of the industry towards enhanced quality and professionalism, strengthen the professional status of the industry, and uplift the standard of PM services.
District Property Management Case: Obligations of PM Company Regarding the Ending of Their Appointment
Building management matters are complex. Many owners’ organisations engage PM companies to assist them for dealing with the daily management work of the building. However, when changing PM companies, if the outgoing and incoming PM companies fail to arrange a proper handover, it can often adversely affect the management of the building and the interest of the owners.
The PMSA received a complaint alleging that an outgoing PM company of a private estate failed to hand over documents related to the property management in a timely manner upon the ending of its appointment. These documents included original copies of facility maintenance contracts, tender documents, facility maintenance certificates, unit deposit records, income and expenditure accounts, and financial statements. The outgoing and incoming PM companies had been in dispute over the handover arrangements for several months without resolution. As the election of the estate's owners’ corporation was approaching and the timeframe for handover was tight, the incoming PM company sought assistance from the PMSA.
After reviewing the case details and communicating with all parties, the PMSA noted that the dispute mainly stemmed from insufficient communication among the outgoing PM company, the incoming PM company, and the estate's owners’ management committee, which led to disputes over the document handover procedures. In light of this, the PMSA attempted to mediate between the incoming and outgoing PM companies by fostering a communication platform. This aimed to assist them in seeking a consensus and viable solutions under the framework of legal and regulatory compliance, with a view to resolving the handover issue as soon as possible.
During the mediation process, the PMSA cited the relevant provisions of the Building Management Ordinance (Cap. 344), as well as the Code of Conduct and relevant Best Practice Guide issued under the Property Management Services Ordinance (Cap. 626). The PMSA clearly articulated the statutory and professional obligations of a licensed PM company upon the termination of its appointment. These include the requirement to properly fulfill handover duties within a reasonable time by punctually returning all documents, records, and property relating to the management of the estate to the management committee or the incoming PM company, so as to ensure a smooth transition of the estate's PM services. Meanwhile, the PMSA also reminded the incoming PM company to actively maintain good communication with both the outgoing PM company and the owners’ management committee to jointly discuss the specific handover arrangements.
During the mediation meeting facilitated by the PMSA, the outgoing and incoming PM companies gradually clarified their respective roles and scopes of responsibilities through negotiation and communication. They also discussed matters including the timeline, methods, and risk management regarding the document handover. By sorting out and summarizing their demands, the PMSA assisted both parties in seeking a solution by focusing on the overall interests of the estate and its owners. Ultimately, the two parties reached a consensus: following communication with the owners’ corporation, the incoming PM company agreed to jointly enter the owners’ corporation’s office at the estate with the outgoing PM company to retrieve the original documents, and to complete the handover of the estate's documents and related information within one month.
Through this case, the PMSA also reminded the two concerned PM companies that they must comply with the requirement of relevant legislation, Code of Conduct, and Best Practice Guide regarding the termination of appointment and handover arrangements in future. This includes planning the handover early and discussing the handover checklist and timetable with the owners, so as to ensure that the handover proceeds smoothly and in an orderly manner, and to minimize the impact of the transition on the PM operation of the estate. In the event of disputes, they should strive to resolve the issues through communication and mediation. This case demonstrates that, in addition to its regulatory role, the PMSA can also facilitate communication and assist in resolving disputes through mediation, thereby promoting the healthy and sustainable development of PM services.
District Property Management Case: Large-scale Estate in Eastern District
A large-scale housing estate located in the Eastern District, with a building age of nearly 40 years, comprises multiple residential blocks and over 2,000 units. Years ago, the estate began preparing for a major maintenance project and established a 'Residential Maintenance Fund'. However, due to various reasons, the relevant work had been delayed for over a decade and had yet to commence.
A few years ago, the estate restructured its maintenance fund and established a new fund, while simultaneously revising the election method of the Owners’ Committee in accordance with the Deed of Mutual Covenant (DMC) of the estate. Subsequently, residents prepared to form an owners' corporation. During this period, some residents expressed concerns over the fund’s accounts, noting that the use of the fund was unclear and the arrangements were controversial. There were also residents who expressed dissatisfaction with the modification of the Owners’ Committee’s long-standing election method.
After receiving the complaint, the PMSA contacted the complainant to understand the situation of the estate (including the convening and arrangements of the general meeting of owners). The PMSA also asked for relevant documents (including meeting minutes) from the concerned PM company in order to clarify the facts. Regarding the fund accounts, the PMSA reviewed past meeting minutes and confirmed that the fund was audited by an independent auditor annually. All funding allocations were resolved and approved through proper procedures, and no irregularities were found. To enhance transparency and reduce disputes, the PMSA recommended that the concerned PM company should explain the fund arrangements to the residents in detail.
Regarding the Owners' Committee election, some residents questioned the practice of allowing each owner to vote for every seat on the committee. After assisting in the review of the provisions of the DMC and the legal advice provided by the PM company, the PMSA considered that the arrangement did not contravene the DMC provisions. The dispute likely stemmed from residents' different interpretation of the provisions. Therefore, the PMSA recommended that the PM company should clearly explain the relevant matters to the residents to dispel their doubts.
Furthermore, some residents were preparing to form an owners' corporation, hoping for owner-led estate management and aiming to save maintenance expenses through active participation and monitoring. Conversely, other residents expressed concerns that the fund managed by the owners’ corporation would be controlled by a small number of members, and considering it more appropriate to have a licensed PM company to assist in the management. The formation of the owners’ corporation sparked widespread discussion within the estate. The PMSA has maintained ongoing communication with the relevant PM company, reminding it to remain neutral and act in accordance with lawful and reasonable request made by the owners.
The estate ultimately succeeded in establishing the owners' corporation. The PMSA promptly urged the relevant PM company to actively cooperate with the owners' corporation, and reminded it of the obligations to act in compliance with relevant law and the Codes of Conduct issued by the PMSA. The PM company committed to fully cooperating with the owners’ corporation to enhance the overall management quality of the estate. The complaint matter was thus concluded.
District PM Case: Single Block Residential Property in Yau Tsim Mong District
A residential building located in the Yau Tsim Mong District, which is over 50 years old and comprises more than 300 units, houses residents of diverse background and with different ethnicities. Owners and residents had expressed concern regarding the building's hygiene conditions and facility maintenance issues. They pointed out that the building had been in a prolonged state of disrepair, experiencing frequent water and electricity suspension, lift breakdown, as well as damaged communal lighting and CCTV system.
In addition, residents reported that the building's PM company failed to display financial statements and assist the owners’ corporation in convening regular owners' meeting in accordance with the Building Management Ordinance (Cap. 344). Not only did the PM company fail to properly explain the management arrangements to the residents, but it also failed to adequately cater to the needs of residents of different ethnicities. Furthermore, its follow-up actions regarding water seepage issues in individual units were unsatisfactory.
Upon receiving the residents' complaints, the PMSA maintained close contact with the complainants and the relevant PM company to understand the latest situation of the property, and requested the PM company to submit relevant documents in order to clarify the facts. The PMSA also provided recommendations for improvement to the PM company, urging it to actively assist the owners in resolving various PM issues and to strengthen communication with the owners’ corporation as well as the residents (for example, by arranging owners' meeting and handling the water seepage problem). Simultaneously, the PMSA reminded the PM company of its obligations to comply with relevant legal requirement, including that it had to act in accordance with the Codes of Conduct issued by the PMSA.
Following the PMSA's coordination, there was a significant improvement in the building's management. This included the repair of damaged communal facilities, monthly rodent control operation, and the regular display of financial statements. The PM company also committed to providing more appropriate services, including issuing notices and notifications in both Chinese and English, and arranging for English-speaking staff to be present at owners' meeting to assist non-Chinese speaking residents so as to ensure that they understand the various management arrangements. Additionally, the company could enhance the monitoring of security personnel's performance and strengthen the recruitment of regular security staff. Regarding water seepage in individual units, the PM company collaborated with maintenance workers to communicate with relevant owners about repair and proactively assisted in resolving the issues. Ultimately, the various complaint matters were concluded.
District PM Case: Large-scale Estate in West Kowloon
A large-scale estate located in West Kowloon, with a building age of over 30 years, comprises multiple residential blocks and nearly 5,000 units. A few years ago, the owners’ corporation of the estate completed the tender process for a new lift maintenance contract and selected a new maintenance contractor. However, some owners expressed dissatisfaction with how the then management committee of the owners’ corporation handled the relevant tender procedures.
Subsequently, 5% of the owners requested the convening of an extraordinary general meeting in accordance with the Building Management Ordinance (Cap. 344) to seek the overturning of the tender results and the commencement of a new tender process. Thereafter, the Chairman of the original management committee convened and chaired the extraordinary general meeting. During the meeting, members of the owners’ corporation and the legal counsel of the PM company pointed out that there were procedural issues regarding the holding of the extraordinary general meeting. Furthermore, the disputed resolution concerning the lift maintenance contract tender had already been rejected at a previous meeting. Following explanation by the lawyer, the Chairman of the original management committee declared the meeting closed.
Some residents expressed dissatisfaction with the abrupt conclusion of the meeting. They proceeded to continue with the meeting at the venue and re-elected members of the management committee. The new management committee subsequently completed the registration of the owners’ corporation with the Land Registry. However, the then management committee did not recognize the new members appointed during that extraordinary general meeting and filed an application with the Lands Tribunal seeking to clarify the legitimacy of the new management committee.
Citing that the outcome of the Lands Tribunal case was still pending, the estate's PM company at the time continued to regard the then management committee as the lawful body, reporting to it and taking its instructions. Dissatisfied with this stance, the newly elected management committee members lodged a complaint with the PMSA against the PM company for professional misconduct.
On the other hand, due to the “dual Management Committees” issue, disputes also arose regarding the authorized signatories of the bank accounts. Consequently, the bank froze the accounts, rendering the owners’ corporation unable to pay service fees to the PM company. At one stage, the owners’ corporation owed the PM company a total of several million dollars in service fees. The PM company subsequently notified the owners’ corporation to end its services and initiated legal proceedings to recover the outstanding payment.
The core of the complaint in this case was the dispute between the incumbent and the newly elected management committees. Upon receiving the complaint, the PMSA proactively contacted the complainant and the PM company, asking for and reviewing all relevant meeting minutes and documents to understand the rationales of all parties. The PMSA coordinated among them, acting as a bridge of communication, and endeavored to address their misunderstandings and differences. Furthermore, the PMSA maintained close communication with the Home Affairs Department to keep abreast of the case's progress. Concurrently, the PMSA issued letters to the PM company in a timely manner, reminding it to handle the estate's management matters in accordance with the Building Management Ordinance and the Codes of Conduct issued by the PMSA.
The PMSA specifically reminded the PM company of its obligations to comply with the Code of Conduct on “Obligations of a Property Management Company regarding the Ending of their Appointment” issued by the PMSA. Upon learning that the original management committee had invited other PM companies to tender for the new management contract, the PMSA also issued letters to the relevant PM companies to inform them of the estate's current management situation. This ensured that the other PM companies had comprehensive information to consider whether they should participate in the tender process. Concurrently, the PMSA also notified the Chairman of the new management committee that it had already written to the PM company, reminding it to properly handle the handover arrangements.
Ultimately, through the mediation efforts of various parties, members of the original management committee resolved the dispute and agreed to resign. The bank also made arrangements to release funds to the PM company. According priority to the well-being of the residents, the PM company decided to stay on and assist the new management committee in managing the estate.
The complaint matter was thus concluded.
