Best Practices on Building Management (2019 Edition)
BEST PRACTICES |
Key Action Party(ies) |
||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1.0 |
FORMATION OF AN OC |
||||||||||||||||||||||
1.1 |
The number of members of a management committee (MC) of an OC for a building containing more than 500 flats should not be less than 11. | Owners |
|||||||||||||||||||||
1.2 |
In the course of the appointment of the MC members, a candidate running to be a member of the MC should declare at his/her nomination form / the owners' meeting, annual general meeting or general meeting before voting his/her associations (if any) with other candidates and the existing MC members (a sample form for declaration of associates is at Annex A).2 The declaration should be recorded in the minutes of the meeting. | Candidates Running For the MC |
|||||||||||||||||||||
2.0 |
PROCUREMENT PROCESS | ||||||||||||||||||||||
2.1 |
Preparation of Invitation to Tender | ||||||||||||||||||||||
2.1.1 |
Procurement of any supplies, goods or services the value of which exceeds or is likely to exceed 20% of the average “audited expenditure”3 of the past three years (if available) should be conducted by invitation to tender, even if the value does not reach the levels stipulated in section 20A(2) of the BMO. | OCs / OComms / DMC Managers / PMCs |
|||||||||||||||||||||
2.2 |
Consideration and Decision on Acceptance of Tenders | ||||||||||||||||||||||
2.2.1 |
Relevant parties (if applicable) should categorise a procurement as a “large-scale procurement” if the value of the supplies, goods or services to be procured exceeds or is likely to exceed the corresponding “absolute amount” or “percentage of the average audited expenditure of the building for the past three years”, | OCs / OComms / DMC Managers / PMCs |
|||||||||||||||||||||
|
whichever is the lesser, as set out below –
If there is no audited expenditure of the building for the past three years, the relevant parties (if any) concerned may follow the standard as defined by the “absolute amount” only. |
|||||||||||||||||||||||
| 2.2.2 |
For the passage of resolutions concerning “large-scale procurement”, the relevant parties (if applicable) should use their best endeavour and encourage owners to attend the meeting concerned and vote in person. It is desirable for the above meeting to be attended by 20% of the owners (including owners attending the meeting personally or by proxy) or above, with at least 10% of or 400 owners (whichever is the lesser) attending the meeting concerned and voting on the resolution in person. |
Owners / OCs / OComms / DMC Managers / PMCs |
|||||||||||||||||||||
| 2.2.3 |
For resolutions to be put to vote concerning “large-scale procurement” and with options “for” and “against” only, owners may, having regard to the circumstances of each resolution to be put to vote (e.g. whether the option under each resolution would be dependent on the result of some other resolutions), indicate their voting instructions to the proxies (if appointed). A template for owners to indicate their voting instructions under such scenario is in Part B at Annex B. Please see paragraphs |
Owners, Proxies |
|||||||||||||||||||||
|
3.2.8, 3.2.9 and 3.2.10 below for instructions. |
|||||||||||||||||||||||
| 2.2.4 |
The notice of meeting concerning procurement that requires approval by a resolution passed at a general meeting of the OC should carry a conspicuous “alert” stating the estimated cost for each project, breakdown of the amount to be borne by each share, and the contribution of funds which may result from approval of the tender by each owner. |
MC Secretary |
|||||||||||||||||||||
| 2.3 |
Actions after the Acceptance of Tenders |
||||||||||||||||||||||
| 2.3.1 |
The minutes of the MC and OC meetings at which “large-scale procurement” is discussed should be delivered to the letter boxes of the owners or be sent to the email addresses of these owners (whichever applicable) within 28 days from the date of the meeting concerned. |
MC Secretary |
|||||||||||||||||||||
| 3.0 |
GENERAL MEETING AND USE OF PROXY INSTRUMENTS |
||||||||||||||||||||||
|
3.1 |
Convening of a General Meeting and Notice of Meeting | ||||||||||||||||||||||
| 3.1.1 |
Apart from giving notice of meeting as required under the BMO, the notice of meeting should be displayed in a prominent place in the building as soon as practicable, say, at least 21 days before the meeting of the OC. |
MC Secretary | |||||||||||||||||||||
| 3.1.2 |
The notice of meeting should state clearly – (a)
the specified statutory time within which proxy instruments should be lodged;
(b)
the method and location for lodging the proxy instruments (e.g. the exact location of proxy instrument collection boxes); and
the timing and location for the opening of proxy instrument boxes if such boxes are used, so that the owners may witness the opening and counting process. |
MC Secretary | |||||||||||||||||||||
| 3.1.3 |
In making a request by not less than 5% of the owners for convening a general meeting pursuant to paragraph 1(2) of Schedule 3 to the BMO, the owners concerned should – (a)
provide a list clearly setting out the names of the owners who made such request, the flats they reside in and their signatures;
(b)
check that the minimum requirement of “5% of the owners” is met before making the request to the MC Chairman; and
(c)
appoint a person as their representative/contact point in order to facilitate better communication with the MC Chairman.
|
Owners | |||||||||||||||||||||
| 3.1.4 |
For a general meeting of the OC requested by not less than 5% of the owners, the MC Chairman should – (a)
liaise with the owners with a view to working out suitable measures to resolve the issue if a requested item has been repeatedly discussed at previous meetings of the OC but not less than 5% of the owners still request to convene a general meeting to discuss such item;
(b)
verify whether the request for meeting is made by not less than 5% of the owners; and
(c)
inform other MC Members as soon as practicable upon receipt of the request for meeting to facilitate better coordination and communication within the MC.
|
MC Chairman | |||||||||||||||||||||
| 3.1.5 |
For a general meeting of the OC requested by not less than 5% of the owners, discussion item(s) requested by the owners should be handled first at the meeting unless the resolution(s) of the requested discussion item(s) hinge on the result of another resolution/item of business which has not been included in the owners' request. The MC Chairman should seek clarifications with the owners concerned on their requests where necessary. |
MC Chairman | |||||||||||||||||||||
|
3.2 |
Proxy Instruments5 | ||||||||||||||||||||||
|
Form of Proxy Instruments |
|||||||||||||||||||||||
| 3.2.1 |
The MC Secretary should – (a)
print the date of the meeting of the OC and a unique serial number on each of the proxy instruments to help ensure that the owners know at which meeting the appointed proxies will exercise the voting right on their behalf and to facilitate checking;
(b)
attach to each of the proxy instruments a statement of purposes in respect of the collection of personal data of owners and proxies (a sample of the statement of purposes is at Annex C);
(c)
attach to each of the proxy instruments “points to note” (see Annex C) to remind owners of the importance of their voting right;
(d)
attach (i) a blank proxy instrument and (ii) a form (see template at Annex B) allowing owners to set out voting instructions (for resolutions put to vote concerning “large- scale procurement” and with options “for” and “against” only) (see paragraphs 2.2.3 and 3.2.8) and proxies to make declarations (see paragraph 3.2.7 and 3.2.8 below) to the notice of meeting or make (i) and (ii) available at the management office;
(e)
distribute the proxy instruments with the “name of proxy” left blank for completion by the owners; and
(f)
prepare a register for owners who do not intend to appoint proxies to register and make it available for inspection by owners.
|
MC Secretary |
|||||||||||||||||||||
|
Filling in of Proxy Instruments |
|||||||||||||||||||||||
| 3.2.2 |
Owners should give careful consideration to the appointment of proxies and only appoint persons whom they trust to be their proxies with a view to ensuring that the proxies would act in their best interests. |
Owners |
|||||||||||||||||||||
| 3.2.3 |
Owners should only appoint persons aged 18 or above as proxies. |
Owners |
|||||||||||||||||||||
| 3.2.4 |
Owners should fill in all the required information, particularly the “name of proxy” in the proxy instruments when appointing proxies. |
Owners |
|||||||||||||||||||||
| 3.2.5 |
Owners should not pass their signed proxy instruments to any person without filling in the “name of proxy”. |
Owners |
|||||||||||||||||||||
| 3.2.6 |
If an owner receives a proxy instrument with the “name of proxy” printed on it but the owner prefers appointing another person to be his/her proxy, he/she can cross out the printed name and put down the name of his/her own proxy, with his/her signature beside the amendment. |
Owners |
|||||||||||||||||||||
| 3.2.7 |
When appointing a proxy, besides filling in the proxy instrument, the owner should show his/her proxy instrument to the proxy and pass the form (see template at Annex B) to the proxy concerned to make declaration at Part A of the form that the proxy instrument is honestly acquired from the owner. The owner and the proxy should also sign the “Statement of Purposes in respect of Collection of Personal Data” (see sample at Annex B). |
Owners, Proxies |
|||||||||||||||||||||
| 3.2.8 |
For resolutions to be put to vote concerning “large-scale procurement” and with options “for” and “against” only, in connection to paragraph 2.2.3 above, if an owner would like to set out his/her voting instructions, he/she should complete Part B of the form (see template at Annex B). The proxy should make declaration at Part C of the form (see template at Annex B) that he/she will follow the voting instructions (if any) of the owner. The owner and the proxy should also sign the “Statement of Purposes in respect of Collection of Personal Data” (see sample at Annex B). |
Owners, Proxies |
|||||||||||||||||||||
| 3.2.9 |
The original of the completed form (see template at Annex B) containing – (a)
the proxy’s declaration that the proxy instrument is honestly acquired from the owners (in Part A);
(b)
the owner’s voting instructions (in Part B, if any); and
(c)
the proxy’s declaration that he/she will follow the voting instructions of the owner (in Part C, if any)
(d)
the signed “Statement of Purposes in respect of Collection of Personal Data”
((a) to (d) above hereafter collectively referred to as “the completed form” (see template at Annex B) should be lodged with the MC Secretary together with the proxy instrument. For the avoidance of doubt, the completed form (see template at Annex B) does not form any part of the proxy instrument, which should be in the form set out in Form 2 in Schedule 1A to the BMO. |
Owners |
|||||||||||||||||||||
| 3.2.10 |
Upon receipt of the proxy instrument and the completed form (see template at Annex B) (if any), the MC Secretary (or the DMC manager/PMC assisting him/her) should – (a)
affix the chop(s) of the MC (or that of the DMC manager/PMC) on the proxy instrument and each part (Part A to Part C and the “Statement of Purposes in respect of Collection of Personal Data”) of the form that has been completed and signed. If the form is submitted by an owner in person, the MC Secretary (or the DMC manager/PMC) should affix the chop in the presence of the owner;
(b)
make a copy of the proxy instruments and the completed form (see template at Annex B) showing the chop(s) affixed;
(c)
keep the proxy instrument, the completed form (see template at Annex B) and the copies in (b) above in a safe place.
|
MC Secretary / DMC Manager / PMC |
|||||||||||||||||||||
| 3.2.11 |
To facilitate the following of the owners' voting instructions (see paragraph 2.2.3) by proxies, owners should give careful consideration to the necessity of appointing an alternative proxy, having regard to the circumstances and needs of each case. |
Owners |
|||||||||||||||||||||
| 3.2.12 |
Owners should, as far as possible, sign the proxy instruments using the signature as appeared on their deeds of assignment. |
Owners |
|||||||||||||||||||||
| 3.2.13 |
Owners who are body corporates should follow their constitution in authorising persons to sign on their proxy instruments. |
Owners |
|||||||||||||||||||||
| 3.2.14 |
Owners should set out their contact details (e.g. telephone numbers, e-mail addresses, etc.) on their proxy instruments so as to facilitate checking by the MC Chairman when the validity of the proxy instruments is in doubt. |
Owners |
|||||||||||||||||||||
| 3.2.15 |
The maximum number of proxy instruments a proxy (including one appointed by an owner who is a body corporate) should hold for the purpose of a particular meeting is – (a)
for a building with not more than 20 flats6– one;
(b)
for a building with more than 20 flats – not more than 5% of the owners (rounded to the nearest integer) or 50 (whichever is the lesser), and the minimum number should be one.
|
Proxies |
|||||||||||||||||||||
|
Timing of Lodging and Collection of Proxy Instruments |
|||||||||||||||||||||||
| 3.2.16 |
The timing and location for collecting the proxy instruments and the opening and counting of the proxy instrument collection boxes (if any) should be convenient to all owners. |
MC Secretary |
|||||||||||||||||||||
| 3.2.17 |
If the DMC manager/PMC (if any) assists the MC Secretary in collecting the proxy instruments, the MC Secretary should give clear instructions to the DMC manager/PMC on the submission deadline and the collection method. |
MC Secretary |
|||||||||||||||||||||
| 3.2.18 |
Owners are advised to lodge their proxy instruments with the MC Secretary as early as practicable, say, at least 144 hours (i.e. at least 6 days) before the meeting, to leave sufficient time for verification by the MC Chairman. |
Owners |
|||||||||||||||||||||
| 3.2.19 |
Owner should personally lodge the duly completed proxy instrument together with the completed form (see template at Annex B) with the MC Secretary direct or deposit them in the ways as instructed by the MC Secretary, and should avoid giving them to third parties. The owner should make a copy of the signed proxy instrument, together with the completed form (see template at Annex B) before lodging them with the MC Secretary or depositing them. |
Owners |
|||||||||||||||||||||
| 3.2.20 |
The proxy instrument lodged by each owner should be the original copy. |
Owners |
|||||||||||||||||||||
| 3.2.21 |
The proxy instrument collection boxes (if any) should be double- locked and placed in a prominent place of the building. |
MC Secretary |
|||||||||||||||||||||
| 3.2.22 |
The acknowledgement of receipt of the proxy instrument should be accompanied by a copy each of – (a)
the proxy instrument; and
(a)
the completed form (see template at Annex B)
showing the chop(s) affixed, and should be issued to the owner concerned by leaving it at the flat of the owner who made the proxy instrument, or depositing it in the letter box for the flat, before the time for the holding of the meeting. For the avoidance of doubt, the issue of the acknowledgement receipt does not mean that the proxy instrument has been verified (please refer to paragraph 3.2.31 below). |
MC Secretary |
|||||||||||||||||||||
| 3.2.23 |
After having acknowledged receipt of a proxy instrument by leaving a receipt at the flat of the owner who made the instrument or depositing the receipt in the letter box for that flat, the MC Secretary may also hand an additional acknowledgement receipt (together with a copy each of the proxy instrument and the completed form (see template at Annex B)) showing the chop(s) affixed to the owner in person. |
MC Secretary |
|||||||||||||||||||||
| 3.2.24 |
Owners are advised to check whether they have received the acknowledgment receipts of the proxy instruments before the time scheduled for the holding of the meeting to ensure that the MC Secretary has received the proxy instruments. If in doubt, owners should check with the MC Secretary on the handling of the proxy instruments. |
Owners, MC Secretary |
|||||||||||||||||||||
|
Determination of the Validity of Proxy Instruments |
|||||||||||||||||||||||
| 3.2.25 |
The MC Chairman should handle the proxy instruments in a fair and transparent manner and in accordance with the provisions under the BMO. |
MC Chairman |
|||||||||||||||||||||
| 3.2.26 |
In determining the validity of a proxy instrument – (a)
if the proxy instrument is in the form set out in Schedule 1A to the BMO, the MC Chairman should not reject the proxy instrument for the sole reason that it is not the printed proxy instrument provided by the OC;
(b)
the mere act of providing additional information such as Hong Kong Identity Card number or time of signing the proxy will not render the proxy instrument invalid; and
(c)
the MC Chairman should not reject the proxy instrument for the sole reason that the owner has crossed out the printed “name of proxy” and has put down the name of his/her own proxy with his/her signature.
|
MC Chairman |
|||||||||||||||||||||
| 3.2.27 |
If the MC Chairman has determined that a proxy instrument is invalid before the meeting, he should contact the owner concerned to explain the invalidity of the proxy instrument as early as practicable so that the owner may consider whether a fresh proxy instrument should be made before the deadline7or to attend the meeting in person. |
MC Chairman |
|||||||||||||||||||||
| 3.2.28 |
If there are two or more proxy instruments from the same owner with different dates for the purpose of a particular meeting of the OC, the proxy instrument with the most recent date is normally intended to supersede those with earlier dates. If in doubt, the MC Chairman should contact the owner concerned to clarify which proxy instrument is intended to be used by the owner. If no date is marked on the proxy instruments or if there is more than one proxy instrument marked with the same most recent date but with different proxies appointed, the MC Chairman should clarify with the owner concerned. All proxy instruments should be considered invalid if the MC Chairman has taken reasonable steps to ascertain their validity but failed. |
MC Chairman |
|||||||||||||||||||||
| 3.2.29 |
The MC Secretary should assist the MC Chairman in contacting the owners concerned for verification of proxy instruments as soon as practicable, in any event no later than the time for the holding of the meeting, if there is any query or uncertainty arising from the proxy instruments. Owners should co-operate with the MC Chairman as far as practicable to ensure that the proxies are properly appointed. |
MC Secretary, Owners |
|||||||||||||||||||||
| 3.2.30 |
After verification by the MC Chairman, the MC Secretary/DMC manager/PMC (where applicable) should affix the chop of the MC/DMC manager/PMC to illustrate that the proxy instruments have been verified. |
MC Secretary / DMC manager / PMC |
|||||||||||||||||||||
|
Display of Information Concerning Proxy Instruments |
|||||||||||||||||||||||
| 3.2.31 |
The MC Secretary should give sufficient time for owners to check against the information of those flats with proxy instruments lodged (“proxy information”). The proxy information should be displayed in a prominent place of the building at least 72 hours before the meeting, be updated (if applicable) after the close of the lodging time provided that the proxy instruments concerned are lodged at least 48 hours before the meeting, and remain to be displayed until seven days after the meeting. |
MC Secretary |
|||||||||||||||||||||
| 3.2.32 |
The proxy information should be displayed in a prominent place of the building in a clear and easily readable format with appropriate font size. Where feasible, the MC Secretary should provide additional means of dissemination of the proxy information (e.g. posting on the website of the OC) to facilitate checking by the owners. |
MC Secretary |
|||||||||||||||||||||
| 3.2.33 |
The proxy information should also include – (a)
the total number of proxy instruments received;
(b)
a mark against the flat of the owner concerned who has submitted proxy instrument(s) but all have been invalidated by the MC Chairman; and
(c)
the total number of invalidated proxy instruments.
|
MC Secretary |
|||||||||||||||||||||
| 3.2.34 | The reason(s) for invalidation should be marked on each invalid proxy instrument and should be announced before the OC meeting, say, by displaying as part of the proxy information. For a proxy instrument which has been determined by the MC Chairman as invalid, the owner concerned, the proxy concerned, the MC Chairman and the MC Secretary (and the DMC manager/PMC providing assistance), and the Authority (i.e. the Secretary for Home Affairs) and an authorized officer under the BMO should be allowed to inspect the proxy instrument. |
MC Secretary | |||||||||||||||||||||
| 3.2.35 |
The MC Secretary should remind the owners to check the proxy information with a view to finding out if there are any unauthorised appointments of proxies. |
MC Secretary | |||||||||||||||||||||
| 3.2.36 |
The MC Chairman should confirm the undivided shares under each of the verified proxy instruments for the purpose of vote counting unless the DMC specifies other mechanism for determining the owners' shares. |
MC Chairman | |||||||||||||||||||||
|
3.3 |
Conduct of a General Meeting |
||||||||||||||||||||||
| 3.3.1 |
The MC Chairman should – (a)
conduct the general meeting in an orderly manner;
(b)
explain clearly to the owners the background and facts of the issues to be discussed;
(c)
allow owners to have equal opportunity to speak at the general meeting; and
(d)
encourage owners to express their views so as to ensure that the items are thoroughly discussed before the items are put to vote.
|
MC Chairman |
|||||||||||||||||||||
| 3.3.2 |
The MC Secretary should – (a)
ensure the quorum of the meeting is formed before the commencement of the general meeting;
(b)
keep track of the number of owners coming in or leaving the venue of the general meeting to ensure that the quorum is formed before putting a resolution to vote;
(c)
advise the MC Chairman to adjourn the general meeting if the quorum is not formed;
(d)
detach and pass the voting instructions (i.e. Part B of the form at Annex B, please see paragraph 2.2.3 for details) (if any) made by an owner to the proxy he/she appointed. The proxy should use the part with voting instructions (i.e. Part B of the form at Annex B) as a ballot paper and vote in respect of the relevant resolution;
(e)
in connection to (d) above, if the proxy asks for an extra ballot paper despite the owner has given voting instructions (if any) to the proxy in advance (for details, see paragraph 2.2.3 and 3.2.8) –
(i)
enquire about the reason behind; and
(ii)
contact and notify the owner at once as far as practicable, or if in vain or not practicable, after the meeting.
|
MC Secretary, Proxies |
|||||||||||||||||||||
| 3.3.3 |
The MC Secretary should avoid giving a new ballot paper to a proxy in the case where voting instructions were given by the owner in respect of a “large-scale procurement”. |
MC Secretary |
|||||||||||||||||||||
3.4 |
Actions after the Conclusion of a General Meeting |
||||||||||||||||||||||
| 3.4.1 |
The MC should keep all the documents related to the appointment of proxies, i.e. – (a)
the proxy instruments; and
(b)
the copies of the completed form (see template at Annex B) showing the chop(s) affixed;
(c)
the voting instructions that were used as ballot papers (see paragraph 3.3.2(d) and Annex B) (if any); and
(d)
the proxy information displayed for at least three years.
|
MC |
|||||||||||||||||||||
| 3.4.2 |
The documents related to the appointment of proxies should be made available to the following parties for inspection -
|
MC, owners, proxies | |||||||||||||||||||||
4.0 |
FINANCIAL ARRANGEMENT |
||||||||||||||||||||||
| 4.1 |
For a building containing not more than 50 flats8, its OC with an annual income or expenditure of over $100,000 is encouraged to have the financial statements (including the income and expenditure account and the balance sheet) audited by an accountant retained by the OC as may be approved by the OC by a resolution passed at a general meeting. |
MC, OC |
|||||||||||||||||||||
2 Associates (相聯者) of a candidate may include –
3 For reference, the “audited expenditure” should refer to the expenditure in the “income and expenditure account” under section 27(1AA)(a) audited by the accountant retained by the OC under section 27(1A) of the BMO. OComms may refer to the “audited expenditure” of similar nature as may be arranged.
4 Not including any garage, carpark or carport.
5 See Form 2 in Schedule 1A to the BMO for the proxy instrument. The best practices under Part 3.2 should also be applicable to meeting of the owners for the appointment of management committee and Form 1 in Schedule 1A to the BMO, with necessary and suitable adaptations to be made.
6 Not including any garage, carpark or carport.
7 At least 144 hours (i.e. at least 6 days) as a best practice (see paragraph 3.2.18), and at least 48 hours before the time for the holding of the meeting (see paragraph 4(3) of Schedule 3 to the BMO).
8 Not including any garage, carpark or carport.