OWNERSHIP AND MAINTENANCE LIABILITY OF EXTERNAL WALL OF BUILDING

February 2023

The recent Court of Appeal’s decision Donora Company Limited v. The Incorporated Owners of Tsuen Kam Centre HKCU 174 [2023] leads to reconsideration of the relationship between the ownership and maintenance liability of the external wall of a building. Whether the external wall forms part of the common parts of the building is always a starting point. The statutory definition of “common parts” under the Building Management Ordinance is (a) the whole of the building except such parts as have been specified or designated in an “instrument” registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner and (b) unless so specified or designated, those parts specified in the First Schedule to the Ordinance. That said, in the external wall analysis, it is always a rational understanding that the “instrument” under the BMO refers to a Deed of Mutual Covenant which serves the function of designating the common parts of a building.

The DMC in Dorona failed to mention that any owner had an exclusive use, occupation or enjoyment of the external wall of the building and the Lands Tribunal thus ruled that no such instrument as prescribed under the BMO existed, thus rendering the external wall of the building to form part of the common parts of the building.

The Court of Appeal reversed the Lands Tribunal’s decision and ruled that the instrument under the DMC could be any document registered in the Land Registry and the First Assignment which reserved the right to the developer to the use, occupation and enjoyment of the external wall of the building could be the instrument under the BMO. As such, the maintenance liability of the external wall should vest in the developer.

While Dorona appears to rule on the interpretation of the BMO and title documents, it has not addressed:

(i) Who actually used the external wall of the building over the years? The Incorporated Owners or any other co-owners?

(ii) How if the developer, though reserved the right, had never exercised such right towards the external wall?

(iii) Who repaired and maintained the external wall in the past years? Who paid the costs?

(iv) Any conduct of the parties which might lead to waiver or acquiescence of such right?

Dorona is obviously not conclusive and the distinct facts of each individual case should be saliently considered to determine who should be liable for the weighted burden to maintain the external wall.