HUDC HOUSING ESTATES BILL

[Mr Speaker in the Chair]

Order for Second Reading read.

The Minister for National Development (Mr Teh Cheang Wan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." On 1st May, 1982, the Housing and Development Board assumed responsibility for the development and management of housing for middle-income earners, known as HUDC housing. This function was previously undertaken by a Government-owned company which, prior to the take-over by the HDB, had sold over 2,700 units of HUDC apartments erected in what are popularly known as HUDC Phases I and 11 estates.

The Company in the past, and the HDB since 1982, have received numerous complaints from HUDC residents about alleged inadequate standards of maintenance and tardy responses in solving maintenance problems. Such grouses have been similarly addressed in petitions to Ministers, letters to MPs and memos to myself. A typical example is the petition sent by the Chancery Court Residents' Association to my colleague, Mr Ong Teng Cheong, Minister without Portfolio, when he recently toured Cairnhill Constituency. The petition listed various problems which the residents demanded that the HDB should rectify fast. The impression gathered by the Government from these is that HUDC residents are very unhappy and discontented with the services given, previously by the Company and presently by the HDB. A number of residents were even unhappy to pay monthly conservancy charges.

The complaints generated by the HUDC residents living in the 2,700 flats are totally out of proportion to their number compared with that of the population residing in the 469,000 units of public housing. The HUDC Phases I and 11 estates are isolated developments apart from HDB's developments in new towns and housing estates. For these reasons, it appears to the Government that it would be in the best interest of all concerned to transfer the responsibility for management and maintenance of the HUDC estates to the residents themselves. After careful consideration, the Government has therefore decided that HUDC residents in the estates should be given the opportunity to manage and maintain their own estates. The residents in each estate should have the right to decide what level of maintenance they wish to keep, the speed they want to solve problems and how much they should spend on the maintenance of their estate. They will then be collectively responsible for the well-being of their estate, and be freed from having to deal with a bureaucracy like the HDB on matters concerning day-to-day running and maintenance.

The HUDC Housing Estates Bill seeks to give effect to this proposal. The Bill enables the Minister to constitute bodies corporate to take over from the HDB the control and management of HUDC housing estates described in the First Schedule. The Minister is empowered by clause 3 of the Bill to constitute a body corporate comprising the owners of all the flats in any particular housing estate described in the First Schedule to maintain and manage that estate. The Bill further seeks to impose on the flat owners a legal obligation to pay contributions to the bodies corporate for the maintenance and upkeep of their housing estates. This is a statutory obligation. The bodies corporate do not have to rely on the terms and conditions in the original lease agreements to collect such contributions. They will be empowered to do so by law when the Bill is enacted.

At this juncture, Mr Speaker, Sir; it would be appropriate for me to clarify that the Bill does not force the lessees to accept more than what they had originally contracted to take on concerning the maintenance of the common property. The maintenance of the common property, according to common law, includes not only the proper upkeep but also the renewal, repair and replacement of any fixtures or finings comprised in the common property or parts thereof. The lessees at present pay a maintenance fee to the HDB from which it meets the cost of upkeep, repair and replacement. In future, they will pay this fee to the body corporate and the proceeds will be used to defray the cost of upkeep, repair and renewal of the common property.

The Bill makes provision in clauses 6 to 29 on the powers, duties and functions of such bodies corporate to be constituted, including provisions:-

(i) for the holding of general meetings;

(ii) empowering the body corporate to levy contributions for the maintenance of the estate;

(iii) for the recovery of arrears of maintenance contributions by the sale of a flat;

(iv) imposing on the flat owners the liability to pay the body corporate's debts, and general provisions on insurance;

(v) empowering the.body corporate to carry out works required by any public authority to any flat when the owner fails to do so and to enter the flat to carry out certain works;

(vi) requiring the keeping of a register of the names and addresses of owners and mortgagees of the flats;

(vii) obliging the body corporate to supply information and certificates to prospective owners and mortgagees of the flats;

(viii) empowering the body corporate to appoint a managing agent and obliging flat owners to give notices to the body corporate on the happening of certain events;

(ix) relating to the keeping of records and the auditing of annual accounts;

(x) generally relating to the constitution, duties and powers of the management committee of a body corporate;

(xi) imposing certain duties and obligations on flat owners and occupiers and stipulating by-laws to regulate the estate.

The Second Schedule contains the by-laws for regulating a housing estate in respect of which a body corporate has been constituted. The Third Schedule deals with the proceedings of the management committees and the Fourth Schedule governs the holding of general meetings of bodies corporate.

Clause 30 of the Bill empowers the Minister to appoint the HDB or any other person to take over the management and functions of any body corporate which is unwilling or incapable of carrying out its functions satisfactorily. A body corporate which commits a breach of any of the provisions of Part 11 of the Bill is liable on conviction to a penalty prescribed under clause 38.

Notwithstanding the constitution of bodies corporate, the HDB remains the legal owner of the land on which the flats are erected and of the common property. The Government has no intention to coerce any body corporate to make improvements to the common property. However, a body corporate which wishes to make modifications to the common property may do so, provided it obtains the prior consent of the HDB. The rights which the HDB and which the flat owners may have apart from the Bill are preserved under clause 36. Clause 40 provides that disputes between the Board and a body corporate about the common property shall be referred to an arbitrator appointed by the Minister.

The Minister is empowered to make rules for the purposes of the Bill and to amend the Schedules.

Sir, I beg to move.

Question proposed.

Mr Rohan bin Kamis (Telok Blangah): Mr Speaker, Sir, I wish to seek clarifications. May I state that although I live in one of these public housing estates, I have no direct pecuniary interest. I seek clarifications which are of general interest to such residents. Furthermore, my constituency will have an HUDC estate.

Sir, the Minister stated that there were numerous complaints since the HDB took over these estates. The question is: how many is "numerous"? Can the Minister elaborate whether these numerous complaints came from different complainants or these complaints came from the same small group of people? I feel the latter is more accurate.

Whilst I agree with the intention of the HUDC Housing Estates Bill, nevertheless I feel that it is less than fair to use the raw statistics as an excuse to support the Bill. Based on experience, I have and still do have high regard for the HDB for their efforts and caring way in which they look after the estate in my constituency. I know they are made of sterner stuff. For these reasons, could the Minister provide a breakdown of the statistics?

Furthermore, Sir, before the body corporate under section 3 is constituted to take over the management and control of the HUDC estate from the HDB, would the HDB ask every resident by positive confirmation if he wishes to have the body corporate take over from the HDB or for HDB to continue with the management? 5.48 pm

Mr Jeyaretnam: Mr Speaker, Sir, this Bill has been introduced into Parliament to bring HUDC housing estates into line with private development where the responsibility for the maintenance of the common areas is vested with the management corporation and not with the developers. The distinction, however, is that in the case of these estates, the common property is still vested with the HDB unlike in private development where the common property will be vested in the owners of the flats.

The Minister has given an assurance and I am sure it will be welcomed by all the residents of these estates that this Bill does not seek to impose on them any further obligations than what are already contained in their leases or their contracts with the HUDC. If that is so, I do not know why it was not possible for the Minister to have first sounded the views of the residents and allayed their fears on this Bill. After all, the number is not such a large number. As he says, it is only 2,700.

The fear is that when these purchasers entered into the contract, the lease, with the HUDC, there were terms which were agreed between the two parties. There you have a contract between the HUDC and the lessees. Their fears are that this Bill seeks to violate the sanctity of that contract and vary the terms and conditions. If the Minister is prepared to give an assurance that there will be no variation whatsoever of their obligations and their terms under their contracts, I think it may go a long way to allay their fears. Will he do that?

Mr Teh Cheang Wan: Mr Speaker, Sir, on the question asked by the hon. Member for Telok Blangah, the HDB has given me statistics. After the HDB took over the HUDC Phase I and Phase 11 estates, the HDB received a total of 4,215 complaints from the 2,700 units of flats. As I mentioned earlier, the HDB is managing 469,000 units of HDB flats. Just imagine these 469,000 people making the same proportion of complaints! It could be well over a million complaints! If the HDB were to attend to the complaints - imagine more than a million complaints - the whole HDB machinery would come to a halt. The HDB would not be able to build flats. It would be swamped by the complaints.

That is why I mentioned earlier that the number of complaints is out of proportion to the number of HUDC flats. There are only 2,700 units of flats. These HUDC Phase I and Phase 11 flat owners are not happy and they have made such a large number of complaints. These housing estates are isolated. They are not part of the HDB new towns and not part of the HDB estates. For these two reasons, the HUDC flat owners under this Bill will be asked to manage their own estates. This may eventually be to the satisfaction of all the parties concerned because some of the HUDC flat owners may feel that they would like to have better facilities. Just for argument's sake, they may like to have security guards, they may like to have lift attendants and they are prepared to pay more. The HDB will not allow them to do that. So it is not something which will work out to be detrimental to the HUDC flat owners. It may eventually turn out that they are very happy with the new arrangement. If they are willing to pay more, they will got better service.

I said earlier in my speech on the Second Reading that, other than this Bill, the HDB will not ask the owners to do more than what is in the original contract. In the beginning, the body corporate, ie the management organization organized by the HUDC flat owners, may run into some problems. But I would like to give the assurance that the HDB Area Office and the HDB will offer every assistance to this body corporate to help them to operate their own management. Also, under this Bill, in the unlikely event that the management organization collapses, they cannot manage and for various reasons they quarrel among themselves and garbage is not collected, lifts break down and the whole estate runs into disrepair, in this event, the Bill provides for the Minister to step in and the Minister may direct the HDB to take over the management or the Minister may appoint someone else to take over the management. So I would like to give the assurance that I will not allow the HUDC estates to run into disrepair and to cause serious inconvenience to the residents.

I will just give an example. Previously, the HDB managed Neptune Court along East Coast Parkway on behalf of the civil servants. Eventually, the civil servants said that because the HDB was charging them a certain fee, they would like to manage themselves in order that they could provide better service and be able to do things their own way, not the HDB way. The HDB agreed. The Neptune Court residents have been doing their own management for many years. Up to today, everybody is happy. The HDB is happy because it does not have to carry this additional responsibility and the Neptune Court residents are happy because they are doing their own management. So let us not treat this Bill as being detrimental to HUDC flat owners. It would be a mistake to prejudge and come to that wrong conclusion.

Mr Rohan bin Kamis: Sir, the Minister has not answered my query. Would he do a survey and by positive confirmation ask every resident whether he wants the HDB to continue or whether this body corporate should manage the estates? I think this is fair.

The other thing is that the HDB has received 4,215 complaints. Agreed. But I know at least 10 families who have never complained at all. So I have a feeling that among the complainants, there must be a small group who have been consistently complaining. I am not too sure whether the HDB officials have given attention to details and broke down these complaints into the minutest details and there could have been several double counting. All I am saying is let us do a breakdown of these complaints and see who have been complaining.

Mr Teh Cheang Wan: Mr Speaker, Sir, I said earlier that I do not have the information. I only have the gross figure. So I think to conduct a survey is a sheer waste of time. After the Bill is enacted, if the HUDC flat owners want assistance, the HDB will, offer whatever assistance to help them to set up the body corporate. After that, they will be managing their own estates and then we will see what happens. As I said earlier, we should not come to the conclusion that they are not happy about managing their own estates.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Teh Cheang Wan].

Bill considered in Committee; reported without amendment; read a Third time and passed.