8 February 2014 Message from Convener of Meeting for the Formation of the Incorporated Owners (IO) of Residence Bel-Air Dear Bel-Air Owners, I am writing to appeal to my fellow Bel-Air Owners to support the initiative to form an Incorporated Owners (IO) for our estate. More than 5% property shares have been gathered and validated by the Home Affairs Department as required by law, to call for a Bel-Air Owners meeting for this purpose on 1 March, 2014 (Saturday) 3:00 PM. Please see attached “ Notice of an Owners’ Meeting” for full details. Why form an Incorporated Owners (IO)? 1. An IO is an independent body corporate set up under the Building Management Ordinance (BMO, Cap.344). It acts legally for all owners in managing the common parts of the estate, and exercises the rights, powers, privileges and duties of the owners. It is also empowered to appoint property management companies. Bel-Air does not have an IO yet. What we currently have is an Owners Committee (OC), a consultative body. The OC is not a legal entity and has no power over Island South Property Management Limited (ISPM), our management company. 2. Under the present arrangement, ISPM controls both the management and finance of our estate. Because our estate does not have an IO, ISPM only has to comply with the Deed of Mutual Covenant (DMC), which is prepared by the developer. It does not have to comply with the BMO that ‘aims to facilitate the incorporation of private property owners for better building management.’ Hence, for better management, we need an IO. What benefits will an Incorporated Owners (IO) bring to the owners? 3. By forming an IO, the owners will have control and supervision over the management company and, therefore, can improve the estate’s management in whatever ways the owners prefer. 4. Through the IO, the owners can direct the preparation of the budget. Many items in our current budget need to be seriously looked into. 5. For better accounting management and control, the IO will appoint its own external auditor to audit the books and records of our estate. This is independent of the management company’s own auditor. 6. ISPM is a private, profit-making company. It has no obligation to share its internal information with any outsiders including the owners of Bel-Air. Forming an IO would enhance transparency. Owners can have direct access to the details of our expenditures and information on incidents of our concern. Some cases that many owners requested for information but to no avail are: - The current shuttle bus contract increased by 50% from $5.0 million to more than $7.5 million despite having the inter-circular routes cancelled. - Cleaning expense increased by 50% to over $18.0 million in the current contract. - On April 5, 2012, an ISPM employee who worked in Bel-Air was sentenced to 3-month imprisonment and a fine in a money-related fraudulent case. The presiding judge believed that there were likely other collaborators. 7. IO members can exercise direct financial control. For instance, for payments, IO members whom we will elect can be authorized to sign on cheques jointly. Whereas, cheques are now signed by ISPM employees whom we know nothing about. 8. More often than not, forming an IO would lead to reduction in management remuneration (MR). Currently, ISPM receives MR calculated at 8% of total expenditure. With this formula, the more our estate spends the higher the MR is going to be. There is a strong motivation for ISPM to spend more. Based on the 2014 budget, we will pay ISPM MR of $15.0 million plus a fixed administration fee of $2.75 million. Baguio Villa, our neighbour that has an IO, paid around $3.5 million to its management company. Are you aware that: 9. Bel-Air Owners are bound by a contract between Pacific Century Premium Developments Limited, the property developer, and ISPM, its subsidiary. We are obliged to accept whatever management arrangements ISPM makes and pay whatever amounts it asks. 10. Owners must be clear that the current OC is ONLY an advisory body. It is not a legal entity, has NO power and has NO authority in the management of Bel-Air. ISPM is not required to accept advice from OC or to consult with OC on matters relating to Bel-Air. 11. There is a misconception that under the present OC arrangement, the management company bears the liabilities. This is not true. Regardless of whether it is an OC or IO, the ultimate liabilities relating to estate management are with the owners. For example, any litigation payments and monetary claims are paid out from the management fund contributed by owners. What can we do to correct this undesirable situation? 12. To correct this undesirable situation, the ultimate solution is to form Incorporated Owners (IO). For this, we need the support of owners of 30% of undivided shares. We are grateful that the Home Affairs Department is helping us to form our IO. In fact, it has helped many estates and multi-storey buildings to form IOs. According to the Home Affairs Office, to manage a building or estate through an IO ‘may not be the only way, but is by far the best practical way’. Dear Owners, I sincerely urge you to support this initiative by attending the meeting on 1 March 2014. Alternatively, you can sign and return the attached proxy form appointing me (Monica Leung) or someone attending the meeting as your proxy holder. Your support is crucial to a better and effective management of our Bel-Air where you and your families can live happier. All Owners are welcome to help manage our estate. For those who are interested to be on the IO Management Committee, please get an “Enrollment Form of the Management Committee Election ” from the Convener. I would like to take this opportunity to invite current & former OC members to run for IO Management Committee seats so as to continue serving the estate. Sincerely yours, Monica Leung Convener of Meeting for the Formation of the Incorporated Owners of Residence Bel-Air Feel free to contact me – p: 5514 8923 | e: mswleung@gmail For more information: bel-air-io.blogspot.hk/
Posted on: Fri, 07 Feb 2014 18:06:56 +0000
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