The CCAC has received a complaint from the chairman and members of the Pearl Horizon Condominium Owners United Association, where they alleged that the SAR Government had breached its initial commitment that the Pearl Horizon parcel would be put out to public tender and that the replacement housing proposal put forward by the Government was unable to solve the problems concerning Pearl Horizon completely. They insisted taking over the properties according to the “original legal procedures, duty certificates and horizontal property records” and requested the CCAC to look into the matter.

After investigation, the CCAC opines that the SAR Government has established special provisions in the previously passed replacement housing legal regime to allow pre-sale buyers affected by forfeiture of land concessions to purchase replacement housing units and also tried to solve the Pearl Horizon problems by letting the concerned pre-sale buyers purchase replacement housing units. The CCAC believes that there has been no illegality or administrative impropriety in this regard.

Judicial authorities confirms legality of resuming the Pearl Horizon parcel

The complainants once claimed repeatedly that the resumption of the Pearl Horizon parcel by the SAR Government was not legal and violated the principle prohibiting retroactive legislation. In the CCAC’s opinion, the SAR Government declared the forfeiture of the concession of Pearl Horizon parcel and resumed it under the Land Law due to the fact that the utilisation of the said parcel had yet to be completed within the 25-year provisional concession. The legality of the relevant practice was already confirmed in the final ruling of the Court of Final Appeal in May 2018.

The complainants pointed out that it was the resumption of land by the SAR Government that left the Pearl Horizon project to be uncompleted, while the SAR Government stated that there was no debtor-creditor relationship as such between the government and the pre-sale buyers. Some of these buyers requested compensation by the SAR Government through judicial litigation. Regarding this, the Administrative Court of Macao announced in the ruling this July that the effect of debt arising from the pre-contract agreements entered between the pre-sale buyers of Pearl Horizon and Polytex Corporation Limited shall not extend to a third party, and it therefore dismissed the compensation requests of 349 pre-sale buyers against the SAR Government and confirmed that there were no debtor-creditor relationships between the SAR Government and the pre-sale buyers.

Replacement housing proposal for responding to the demands of pre-sale buyers

In response to the complainants’ claim that the government had breached the commitment of putting the Pearl Horizon parcel out to public tender, the CCAC found after investigation that the SAR Government did once state in December 2015 that it would consider putting the aforesaid parcel out to public tender provided that the conditions of the relevant legal frameworks were met. However, after in-depth analysis, it was considered that that public tendering was not only legally infeasible but would also be unable to protect the rights and interests of the pre-sale buyers in practice. According to the SAR Government, in view of the principle of good faith, it had been seeking ways to properly respond to the demands of buyers who purchased the uncompleted residential units of Pearl Horizon, so that their need for purchasing homes and improving living environment would be tended to.

According to information publicly available, the SAR Government put forward the replacement housing proposal in May 2018. It set forth special provisions in the bill of Legal Regime on Temporary and Replacement Housing under the Urban Renewal Scheme to allow pre-sale buyers who meet the prescribed conditions to purchase replacement housing units. Upon passage of the said legal regime, the SAR Government subsequently established “Macao Urban Renewal Limited” to accept applications for the purchase of replacement housing units and commenced the planning and building of replacement housing units of Pearl Horizon. After analysis of the relevant information, the CCAC believed that the SAR Government has given practical responses to the demands of the pre-sale buyers through the relevant legal regime and the replacement housing unit application arrangement.

Each pre-sale buyer may only apply for one replacement housing unit

The complainants considered that the provision that each pre-sale buyer might only apply for one replacement housing unit was unfair to those who had purchased more than one unit of Pearl Horizon. Since the purpose of building replacement housing is to satisfy the need for accommodation of the property owners affected by housing demolition and relocation or reconstruction, the replacement housing regime has set forth restriction on the qualification of applicants and the quantity available for application in order to ensure reasonable use of public funds and land resources. Regarding the replacement housing for Pearl Horizon pre-sale buyers, the law has not only excluded those who purchased the pre-sales under the name of companies but also provides that each buyer may only apply for one replacement housing unit regardless of how many pre-sales each of them has purchased.

Following the investigation, the CCAC considered that the provision that restricts the quantity of replacement housing available for pre-sale buyers was formulated based on the discussions in the Legislative Assembly and was not only a solution tailor-made for the problem concerning Pearl Horizon. Taking into account the fact that part of the pre-sale buyers of Pearl Horizon have purchased more than one pre-sale and some have even purchased over ten pre-sales, if there is no restriction on the number of the replacement housing units that they may apply for, the replacement housing regime will go against its legislative intent and the Government’s original intention to take care of the pre-sale buyers’ needs for purchase of housing and improving their living environment.

The complainants also thought that the provision that each of the couples of which both of the members have purchased a pre-sale respectively might only apply for one replacement housing unit was unfair. The chairman of the Pearl Horizon Condominium Owners United Association stated that there were three to four such cases including his own case, while the CCAC found in the investigation that there were 15 couples of which both of the members had purchased one or more than one pre-sales respectively. The CCAC considered that when formulating the replacement housing regime, the Legislative Assembly did thoroughly discuss this issue. They came to a conclusion that since the purpose for building replacement housing is to satisfy the needs for accommodation of the parties concerned and a couple has the obligation to live together according to the law, the regime stipulates that each couple may apply for only one replacement housing unit. The conclusion is legal and reasonable and therefore shall be respected and followed.

Only those who have completed property registration may apply for replacement housing

During the investigation, the complainants told the CCAC that around 30 to 40 pre-sale buyers of Pearl Horizon neither knew the implementation of Law no. 7/2013, Legal Regime of Promise of Transfer of Buildings under Construction (commonly known as “Law on Uncompleted Residential Buildings”), as they were not in Macao nor received any relevant notifications from their property agencies. Therefore, they have not registered the pre-sales they purchased. In fact, the Macao SAR Government did state that according to the replacement housing regime, the applicants shall complete the property registration of the pre-sales they have purchased because property registration has the function of publicising the legal situation of real estate and the effect of setting up a defence against a third party. In this sense, their identity as the buyers of the pre-sales may only be legally verified through property registration.

Following the analysis, the CCAC considered that from the entry into force of the “Law on Uncompleted Residential Buildings” to the forfeiture of the concession, a period of one and a half year has been given to them to complete the property registration. In addition, the law has set up a one-year transitional period in which the registration fees were exempted and the developer of Pearl Horizon also sent them written notification telling them to complete the property registration. Therefore, the pre-sale buyers concerned shall bear the consequence of not registering the pre-sales they have purchased. One did not understand the law or “the property agencies did not fulfil the responsibility to inform them” should not be the excuse for not complying with the provisions under the replacement housing regime.

Completing the construction of Pearl Horizon based on the original building plan is impossible under the law

In the investigation, the chairman and members of the Pearl Horizon Condominium Owners United Association told the CCAC that they would not accept the current replacement housing proposal and would insist on the demand for “taking over the properties in accordance with the original legal procedures”. In other words, they demanded completion of the construction of Pearl Horizon based on the original building plan and taking over the properties in accordance with the original sale and purchase contracts. The CCAC asserted that in fact, the relevant provisions have been laid down in the Land Law and the Legal Regime on Temporary and Replacement Housing under the Urban Renewal Scheme and, among the 2,128 qualified pre-sale buyers, 1,932 buyers have already applied for replacement housing, including the chairman and the members of the Pearl Horizon Condominium Owners United Association. Moreover, the planning and building of replacement housing are ongoing. Therefore, it is legally and actually impossible to continue the original development project of Pearl Horizon on parcel P.

Following the investigation, no circumstances of illegality or maladministration related to the issues in the complaint have been found. Therefore, the CCAC has archived the complaint.