No illegalities found on Gov’t handling of Pearl Horizon housing replacement scheme – CCAC

The Commission Against Corruption (CCAC) stated today that it concluded an investigation demanded by the buyers of the failed Pearl Horizon, siding in favour of all government decisions concerning the reclamation of the land plot where the project was to take place and over the requirements set for buyers to be able to obtain replacement housing.

The CCAC considered that there were not any ‘administrative illegalities and irregularities’ in the special provisions in the previously approved legal exchange housing scheme.

Several buyers complained against a requirement that each buyer of units under construction can only apply for the purchase of one housing unit for exchange as ‘unfair’ to those who had purchased several units under construction from Pearl Horizon.

The CCAC responded that given that the construction of exchange housing is intended to address the housing needs of homeowners affected by the demolition or reconstruction of housing, the legal restrictions on eligibility for and application for such housing need to ensure the reasonable use of public funds and land resources.

In the case of Pearl Horizon, buyers who purchased pre-sale units on behalf of companies were also excluded and couples who purchased several units were also only able to apply for one replacement housing unit.

The CCAC indicated that after its investigation, it assessed that about 15 couples had purchased more than one pre-sale unit in the Pearl Horizon project.

‘Following the investigation, the CCAC considers that the rule limiting the number of exchange houses required by building under construction buyers was drawn up following a number of discussions in the Legislative Assembly (AL), which is not intended solely to resolve the Pearl Horizon case,’ the corruption watchdog department noted.

‘Given that some buyers purchased more than 10 units, not imposing restrictions on the number of exchange houses to be requested would contradict the law’s original intention of meeting the property acquisition needs of property buyers and the improvement of their housing environment,’ the department added.

Meanwhile, buyers who did not register their purchase at the property registry are considered ineligible to apply for the replacement scheme as set by regulations on property transfer in 2013, which faced complaints that between 30 to 40 buyers were unable to do so because they were not in Macau, did not have knowledge of the regulations, or had not been notified by the Pearl Horizon developer Polytex, the local arm of Hong Kong-listed Polytec.

The CCAC considered that since the enforcement of the property transfer law, and the expiration date of the concession of the land, there was a one and a half year period to proceed with the respective land registration, and that the law also provides exemption from registration fees within a transitional period of one year. Additionally, the promoter of the Pearl Horizon venture had notified buyers in writing.

Therefore the watchdog considered the reasons provided by these buyers as not constituting grounds for exemption from the requirements of the exchange housing law.

Concerning complaints that the future development of the housing units should follow the original definitions set in the Pearl Horizon project and that the housing units should be provided according to the original contracts, the CCAC noted that since both replacement housing planning and construction works are already underway, this request is ‘unviable either legally or practically.’

The CCAC also validated the government’s decision to declare the land concession as invalid and underlined that there was not a ‘creditor-debtor’ relationship between the Macau SAR government and the buyers since courts had already ruled against several compensation requests put forward by buyers against the government.

So far, the urban renewal public company responsible for the scheme – Macau Urban Renewal Ltd. – has already approved 1,022 requests from Pearl Horizon buyers applying to receive replacement housing, with more 2,000 said to be eligible to take part in the scheme.

The leader of the Pearl Horizon Condominium Owners United Association, Kou Meng Pok, told MNA previously that the group had sent a letter to the Hong Kong and Macau Affairs Office of the State Council to complain about the Macau government’s role in the failed development project and its handling of the replacement housing scheme created for the buyers.