Introduction

In response to the amendments to the Building Management Ordinance (Cap. 344) (“BMO”) gazetted in 2024 and will take effect on 13 July 2025 (“2024 Amendment”), the Property Management Service Authority (“PMSA”) has revised the “Obligations of Property Management Company under the Building Management Ordinance” (“Revised Code”) first published in 2023 (“Original Code”) on 23 January 2025.

The 2024 Amendment covered various aspects including procurement, financial statements, keeping of documents, criminal sanctions, etc. with the focus on large-scale maintenance procurement, high-value supplies, goods or services procurement, and financial statements for buildings into Schedule 7 of the Building Management Ordinance (as amended) as mandatory terms in the Deed of Mutual Covenants.

The Revised Code is one of the 24 Codes and Guideline issued by the PMSA. The Revised Code will take effect on 13 July 2025.

Key amendments

There are a number of amendments made by the Revised Code and the following are the more material amendments:

General duties of Manager – Determination of management expenses

In the Original Code, an individual owner in a building development (“Owner”) must pay reasonable charge before obtaining a copy of the draft building management budget. Now the Owner will have an option to obtain an electronic copy of the draft budget free of charge.

General duties of Manager – Keeping of accounts

Under the Revised Code, summary of income and expenditure and balance sheet as required previously under the Original Code must be signed now. Further, if the total annual income of the building development (“Development”) exceed HK$500,000, the relevant income and expenditure account and balance sheet must be audited.

Under the Revised Code, a “specified person” will now have power to inspect the books and records of the Development. Under the Original Code, only the Owner will have power to do so.

Procurement of supplies, goods or services

The Revised Code now added new categories to procurement the supplies of goods and services i.e. (i) Type 1 High-value Procurement (ii) Type 2 High-value Procurement and (iii) Large-scale Maintenance Procurement. In addition, the licensed property management company (“PMC”) / responsible person must make a declaration regarding any pecuniary/other personal dealing in a specified form regarding the said procurement.

Requirements under the BMO which
a licensed PMC has to remind an OC to comply with

In the Original Code, the licensed PMC is required to assist and remind the owners’ committee to comply with Schedule 8 of the BMO. In the Revised Code, this duty has been expended to the whole BMO and what is required is set out in detail in the Revised Code.

Practice effect

It is noteworthy that in the preamble section of the Revised Code, it is stated clearly that management company will not incur a legal liability only because they contravened a provision of the Revised Code. On the other hand, contravention of the Revised Code is admissible in evidence in disciplinary hearings for the management company, and proof that management company contravened the Revised Code.

Under section 26 (Disciplinary Order) of the Property Management Services Ordinance (Cap. 626), the maximum amount of penalty under this section is merely HK$300,000.00, which is in addition to the usual revocation or suspension of licence. Whether this level of penalty / punishment will have any practical effect on the building management remains to be seen.