While you may believe that half the width of a wall between flats belonged to the owner of the flat on one side and half to the owner of the flat on the other side, the Hong Kong courts tell you that it may not always be the case.

We have briefly discussed the legal risks in converting two flats into one by knocking down the partition wall between two adjoining flats (the “Partition Wall”)in our newsletter entitled “Legal Risks in Converting Two Flats into One Single Unit” published in January 2010. In this newsletter, we shall revisit this issue again in light of a recent Court of Appeal case.

Background of the case

In the Incorporated Owners of Westlands Garden v Oey Chiou Ling and Wong Fung Ling (CACV 155/2010), the appellants were two sisters who owned adjoining apartments.As you would expect, they wanted to remove the Partition Wall between their flats so as to create a single larger unit. It was held in the first instance in the Lands Tribunal that the Partition Wall was a common part and therefore the sisters did not have the right to remove it.The sisters appealed against the decision. It was observed by the Court of Appeal that converting two flats into one is not an uncommon practice in Hong Kong. After taking a contextual and purposive approach to the construction of the Deed of Mutual Covenants (the “DMC”) and the assignments, the Court of Appeal overturned the decision of the Lands Tribunal and held that for all intents and purposes, the Partition Wall was for the sole use and benefit of the owners of the two flats. It further held that the Partition Wall is "co-owned by" the owner of the two adjoining flats i.e. the sisters.

Common Part

A common part of a building is a part which is not for the exclusive use of a single flat owner but the owners of the whole building. To determine if a particular part of a flat is a common part, we have to review carefully (i) the Assignments in respect of the flat; (ii) the DMC; and (iii) Schedule 1 of the Building Management Ordinance (Cap. 344) (the “BMO”), which serves as a non-exhaustive pointer to what might be regarded as common parts.

However, the difficulties in the above case are that the common parts were not defined in the DMC and there was also no specific reference to the Partition Wall in the assignments in respect of the flats. Having concluded that the Partition Wall is not covered by the expression “boundary wall”, the Court held that the Partition Wall was not specified in Schedule 1 of the BMO as well. Under this circumstance, the Court would have to search for the intention of the developer and the first purchaser of a unit in the development (“1^st Purchaser”) as expressed in the first assignments of the flats and the DMC and to interpret them in light of the factual matrix at the time they were entered into.

Since the 1^st Purchaser was only a purchaser of the shop on the ground floor of the development, the Court ruled that it was unlikely the developer intended, at the time of the first sale, to turn all Partition Walls into common parts. To have done so would mean that the developer would not be able to change the size or configuration of any of the domestic flats, which were still in the course of development. As such, the Court held that the Partition Wall was for the sole use and benefit of the owners of the two flats.

Structural Alteration

However, it is not yet the end of the matter. There is a clause in almost all DMCs that prohibits an owner to make any structural alteration to any part of the building. A breach of the DMC will entitle the management company and/or other owners of the building to take enforcement action against the owner. In the above case, it was agreed by both parties that the Partition Wall was not a load bearing wall. The Court held that the Partition Wall, unlike an external wall, is not an integral part of the building. Rather, it was regarded by the Court as the same as “an internal partition wall making a bedroom” thus knocking it down would not amount to structural alteration. Therefore, the sisters were not in breach of the DMC and the management company was not entitled to take any enforcement action.

Load Bearing Wall and Non-Load Bearing Wall

The above case is distinguishable from the Central Management case we discussed in our previous newsletter. Part of the Partition Wall which has been knocked down in the Central Management case was a load bearing wall, which is usually regarded as a common part of the building as it is listed in Schedule 1 of the BMO, unless it is expressly assigned to a flat owner for his/her exclusive use. However, the Partition Wall in the above case is not a load bearing wall and so the decision in theCentral Management case shall still stand.

Approval from the Building Authority and/or Management Company

According to sections 14 and 41 of the Building Ordinance (Cap. 123), except for certain non-structural works, all building works require the approval of the Building Authority. You may wonder whether there is any significance if the owners had obtained the approval or permission from the Building Authority and/or the management company. It must be noted that obtaining the approval from the Building Authority is a fulfillment of the statutory requirements under the Building Ordinance only. Any such approval or permission will not provide you with any legal protection if the issue of common part is involved in a legal dispute as in the above case.

Lessons to learn

While it seems complicated to determine if one could legally knock down a Partition Wall, a hard and fast rule to learn from the above case and the Central Management case is that do not ever knock down a load bearing wall! Doing so would definitely be regarded as converting a common part to one’s own use and also making structural alteration to the building, which means a violation of both the BMO and also the DMC.

Even if the Partition Wall is a non-load bearing wall, you could not knock it down if it is a common part or if it is a structural part of the building. It is therefore very important to seek professional legal advice to ascertain the common part of the building and appoint an Authorised Person to advise if the Partition Wall is load bearing and/or a structural part of the building.

Conclusion

Having the financial resources to purchase two adjoining flats and convert them into one ‘dream-house’ is definitely great. Yet, it could easily turn into a nightmare if you are consequently involved in long and draining legal battles. Therefore, do take professional advice before realizing your ‘dream’!