Security of cadastral rights in Hong Kong

The Hong Kong cadastral system is designed for efficient transactions which has remained unchanged since the enactment of the Land Registration Ordinance in 1844. In this British designed cadastral system, various land-right records are kept by different government departments. The current computerized register gives good protection of ownership rights to practically all land properties. Land use rights have been taken up by the Town Planning Ordinance and the individual detailed land rights criteria are contained in land leases or land grant documents. Land boundary rights, property management arrangement and other land rights are to be traced from the deeds. The design usage and the first alienation of land is managed by government whereas the subsequent development and the subdivision of property units in the mode of undivided shares of land are largely private deals. There are much rooms for improvement in the security of property rights. This paper introduces the cadastral arrangement in Hong Kong, points out the main successful achievement and the subsequent insufficiencies in the protection of other land rights, and discusses the conditions of institutional changes for the adoption of such improvements. 1 Function of cadastre and real estate property Hong Kong adopted rudimentary deeds registration shortly after the inauguration of this British colony in 1842. Land speculation started even years before the implementation of a proper registry [Nissim, 1998]. Unlike most jurisdictions in Europe, Hong Kong has no cadastre law. Cadastral system in Hong Kong refers to the institutional settings handling and recording land rights, and legally speaking, as defined in Section 2 of the Conveyancing and Property Ordinance (Cap.219), land here basically refers to all rights over land, the ground as well as features attached to land. This paper discusses the security of land rights in the land development and recording process of these land rights. Land development by private business sector is always a main economic activity in Hong Kong. To name a typical case – the Hong Kong Kai Tak Airport, which was used from 1925 to 1997, was a large strip of reclaimed land originally for residential housing development and later changed to an airport run-way extending onto the Victoria harbour. From the 80’s, the Hong Kong Government had adopted a “minimal intervention” principle which reflected on the land policy as to supply land for housing development and let the private developers work on the business market. Growing with prosperous land development business, land premium obtained from land sales and tax incomes generated form land property have become a significant source of government revenue. Until 1997, real estate was a major investment tools for Hong Kong people. Buying an apartment was for the enjoyment of living and probably more importantly, for the value appreciation potential. The general public cares less about the attached land rights to the property until the land rights issue comes up to affect the value of the property. The most vocal advice to the selection of a real estate property is “location, location and location”. Location of the real estate property dictates its value. Other land rights are of very less concerns. After the Asian financial crisis broke out in 1997, the price of the Hong Kong real properties has now plunged down 65% as compared to the peak value in 1997. And, in recent years, the government policy has changed to “proactive market enabler” [Hong Kong Trade Development