Developer retains exclusive right to use the external walls. Are they common parts?

Introduction

In Kong Wai Hsien v Tai Wai Glamour Garden (IO) ([2019] HKCA 1229) the Court of Appeal had to consider whether the external walls of a building were common parts even though the DMC reserved to the developer the exclusive right to use them.

Individual owners claimed that they were not liable to contribute to the cost (of over HK$5 million) of carrying out maintenance works on the external walls and other common parts.

The individual owners argued that these walls were not common parts since the DMC granted the developer exclusive rights over them.

Were the external walls ‘common parts’ in the sense that they were not part of the estate the exclusive use of which had been allocated to an owner? This was a question of contractual interpretation of the DMC.

Relevant DMC provisions

The DMC for the building allocated 20 shares to the common parts, expressly defined to include the external walls. The developer retained the ownership of these 20 shares and the associated rights over the common parts.

The rights given to the owner of the common parts by the DMC included the exclusive rights to use the external walls: (a) by placing pipes, wires, machinery etc on them; and (b) the exclusive right to use, or allow others to use, the external walls for advertising purposes,

The owners argued that the rights granted to the Developer over the external walls were so extensive that there was no use left for other owners.

The decision

The Court of Appeal decided that the walls were common parts despite the DMC’s grant of the exclusive right to make certain types of use of them.

All of the owners derived benefit from the external walls despite the rights granted to the Developer: ‘ the External Walls by providing the external framework to the Building also serve to hold and support the Building and prevent damage to its interior. All the co-owners or occupiers of the Building have the right to enjoy such use’ ([40] Au JA).

The Developer did not have exclusive right to use the external walls. They were common parts and all owners could be made to contribute to the maintenance costs through the management charge.

Michael Lower

 

Tags: , ,

One Response to “Developer retains exclusive right to use the external walls. Are they common parts?”

  1. FreedomFishing Says:

    This blog is very informative and interesting, thank you Michael. I am neither a law practitioner or student, your blog certainly helps me to understand land law more.

    I think this is a very good explanation of common structure. It is the structure that all owners can derive benefit from, either directly or indirectly, even the structure can only be exclusively used by a specific party since the party holds 20 shares. I hope I learn the lesson correctly.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: