Demerit system for contractors ‘not ruled out’, Hong Kong development chief says

The Hong Kong government has not ruled out the possibility of introducing a demerit system for contractors, according to the development chief, after an independent inquiry into last year’s deadly Tai Po fire identified unscrupulous consultants and building professionals as the main culprits of the tragedy.

Secretary for Development Bernadette Linn Hon-ho said in a television interview on Sunday that authorities were also considering introducing new conditions for homeowners who applied for the government’s building maintenance subsidy scheme, including a long-term plan and fund for property maintenance.

“I do not rule out the possibility of introducing a demerit points system in the next stage if we can formalise the mechanism further. However, we have not considered it at this stage,” Linn said.

She said such a demerit system would require careful study and the immediate focus remained on stiffening penalties through legal amendments and improving the disciplinary mechanism.

She pledged to conduct more frequent spot checks on reports submitted by contractors or authorised persons, especially in key areas involving concrete and steel bars.

The government earlier proposed an amendment to the Buildings Ordinance, with the fine for diverging from approved plans increased from HK$1 million (US$127,500) to HK$3 million, among other measures.

Linn added that disciplinary proceedings against contractors and authorised persons could be initiated based on warning letters or a poor track record, without needing to rely on prosecution.

She noted that proven integrity breaches would prompt immediate licence revocation, potentially accompanied by public censure and fines.

In its latest budget, the government earmarked HK$3 billion for a new subsidy scheme after reviewing Operation Building Bright 2.0, a scheme that sponsored homeowners for building inspections and repair works.

Linn said the government could introduce new conditions in the future for approving subsidies, such as having a long-term building maintenance plan, conducting regular maintenance and building up reserve funds for future works.

“One direction we are considering is to add certain conditions when the government grants subsidies to repair buildings aged 40 or 50 years; we hope they will not require another major overhaul again any time soon,” she said.

But Linn acknowledged that asking homeowners to set aside savings for future repair works would be controversial, even though they had a responsibility to maintain their own properties.

“This topic has its controversies. If you ask people who just bought a brand-new flat to start saving money for major renovations right away, they’ll naturally think: ‘A major overhaul will not happen for another 20 or 30 years, and I might not even be the owner by then,’” she said.

“Asking them to put money in now will inevitably cause some hesitation. That is why we feel we need to build a proper consensus in society on this first.”

The development chief also said the government would need to recruit more than 90 additional staff for the new Building Maintenance Support and Services Council, a dedicated body to oversee building renovations to be established by the end of the year.

The council will assign inspection consultants to property owners, handle tendering and assessments for supervision consultants and contractors and regularly evaluate performance to ensure project quality is upheld.

The additional manpower would include professionals, technicians and administrators. Linn said the recruitment process was under way, and she hoped the council would kick into gear by early to mid-2027.

She added that both the new council and the Buildings Department would have a checks-and-balances mechanism for assigned inspection consultants.

Inspection reports must be submitted to the Buildings Department, which would conduct spot checks on the reports and surprise visits at least once every six months after renovation works had commenced.

The Bar Association had earlier proposed a “two-envelope” submission system for tendering under the Building Management Ordinance to ensure the quality of renovation projects approved by owners’ corporations.

Linn said such a submission system had its merits and authorities would consider whether it was worth adapting for every inspection and maintenance project under the newly formed council.

She also said the council would disclose details of the repair works it supervised, including the cost, to homeowners. The government would also enhance its complaints handling mechanism in the future, including sharing of complaints records among different departments.