What shall take note in Small House Policy and the Sale and Purchase

2023/12/18

The “Small House Policy” has a long history. In 2021, the Court of Final Appeal ruled that applications for erection of small houses (also known as a “Ding House”) under the Policy, whether by way of free building licence, private treaty grant or land exchange, are lawful (see Kwok Cheuk Kin v Director of Lands (No. 2) (2021) 24 HKCFAR 349). Back to basics, what is the Small House Policy? In this Article, we would briefly discuss the issue.

The Small House Policy has existed since the colonial period in the early 20th century before it was formally approved by the Executive Council in November 1972. Under the Policy the indigenous villagers are entitled to apply for approval once in their lifetime to build a small house on a suitable piece of land in their own Recognized Village. Indigenous villagers are defined as male person aged 18 or above whose father’s lineage originated from a recognized village in the New Territories in 1898. There are about 642 recognized villages at present.

The size and height of small houses are subject to stringent restrictions under the Buildings Ordinance (Application to the New Territories) Ordinance (Cap. 121). The site applied must also be located within a Village Type Development Area (“V Zone”) and the environs or the village extension area of a recognized village, and the construction of the small house must comply with the conditions of the Building Licence, such as the restrictions on resale. Upon completion of the building works, the applicant is also required to arrange submission of a report to the District Lands Officer by a T2 Competent person and a Registered Structural Engineer/Registered Professional Engineer before issuance of a Certificate of Compliance by the District Lands Officer.

It is therefore important to exercise caution in dealing with the sale and purchase of small houses and other village houses in the New Territories. Solicitors would usually consider further for the clients, such as cross-checking the compliance of the conditions of the building licence and ascertaining the right of way for enjoyment of the small houses so that clients can be advised and reminded about the relevant risks.

Please note that the information contained herein should be regarded for general reference only. If the readers do have enquiry on the related legal matters, please seek formal legal advice.