Incorporated owners’ right to sue

Section 16 of the Building Management Ordinance vests the right to bring proceedings in relation to the common parts in the incorporated owners where the loss or damage is suffered in common by the owners. The individual owners retain the right to bring proceedings (even in respect of the common parts) in relation to loss or damage to their person or property.

In Grenville House v The Incorporated Owners of Grenville House ([1978] HKLR 235, CA) the incorporated owners brought proceedings in negligence against (among other parties) the developers, architects and building contractors responsible for the design and construction of a residential development. Soon after the building was completed and days after the incorporation of the incorporated owners, the common parts of the development were affected by a series of landslips. It cost several million dollars to carry out the necessary remedial works and the incorporated owners sought to recover these damages. They relied on their rights under the predecessor of section 16 of the Building Management Ordinance. This vests rights, powers, privileges and duties in relation to the common parts in the incorporated owners. Where the loss or damage in question is suffered in common by all of the owners, the corporation has the exclusive right to bring proceedings. Individual owners retain the right to bring proceedings for other (‘private’) loss or damage even if it is caused by some matter connected to (eg a defect in) the common parts.

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