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Fanny Fung

A family-owned noodle shop is in danger of being forced out after a developer adopted "innovative" tactics to attempt to force the business to surrender its premises of 38 years.
The case centres on Leung Faat Noodle Shop, on the ground floor of a six-storey building at 54 Ki Lung Street in Sham Shui Po.
A subsidiary of Lai Sun Development has, since 2010, owned all the other units in the building: 15 flats and another shop on the ground floor.
So far, the developer has seen its attempts to buy the noodle shop rejected. A change in the law four years ago allowed for forced sales in cases where the owners of 80 per cent of properties in a building supported it, but only if one of three other conditions was met: the building was industrial, or more than 50 years old, or if each unit made up 10 per cent or more of the lot.

An investigation by land-policy pressure group the Land Justice League has discovered that the developer combined the three flats on each floor into one and registered the change in ownership structure with the Land Registry, thus meeting the 10 per cent requirement.
The company filed an application to the Lands Tribunal two weeks ago for the compulsory purchase of the noodle shop.
"It is the first case of this kind we have seen … Approval of this application will open a floodgate and all other developers will be able to force minority owners out by combining flats," the league's Icarus Wong Ho-yin said.
Wong described what the firm had done as an "innovative way to exploit the legal loophole". He urged the Development Bureau to clarify whether it was allowed.
But Lai Sun Group senior vice-president Julian Poon Yui-man maintained that his company was doing everything within the law. "We combined the small flats into big ones to meet market demand so that we could lease them out," he said.
He said the developer had tried to strike a deal with the shop owners, three brothers, before taking the case to the tribunal.
"We raised our offer from HK$20 million [in June] to some HK$24 million [last month] … But they asked for HK$60 million," he said.
Yeung Yee-hing, one of the co-owners, said they were more concerned about keeping the business, which had been running since the 1960s, open. The brothers' father bought the 1,050 sq ft shop in 1976.
"It is very difficult to find a place to move to in the neighbourhood. Owners should only sell flats upstairs but not shops at the ground level," Yeung said.
He admitted that the figure of HK$60 million had been raised during negotiations, but said this was just a negotiating tactic intended to put the developer off.
"If we really cannot find a place to move, we may well have to close the business," he said. The family plans to raise objections at the tribunal.
A Development Bureau spokesman could not comment directly on the application, but said an applicant would have to convince the tribunal it had "taken reasonable steps to acquire" all units in the building.
 


Loophole puts noodle shop at risk

Owners (from left) Yeung Yee-hing, Yeung Ding-yung and Yeung Ding-yin want to save their long-standing business. Photo: David Wong

The shop at Ki Lung Street could be forced out by a developer. Photo: David Wong

News

Hong Kong

Developer's 'innovative' tactic could see family business forced to sell up


A family-owned noodle shop is in danger of being forced out after a developer adopted "innovative" tactics to attempt to force the business to surrender its premises of 38 years.
