CFA confirmed that IOs of buildings may waive breaches of DMC

In Centre Chase Investment Ltd v IO of Castle Peak Road Int'l Industrial Bldg [2026] HKCFA 26, the Court of Final Appeal confirmed that incorporated owners of Hong Kong's buildings can, through their management committees, validly waive a breach of the Deed of Mutual Covenant as long as the power is exercised conscientiously and reasonably. The type of breach and its seriousness have to be considered in deciding the appropriate option to tackle the breach.

In reaching the above answer, the CFA decided that s.18(1)(c) of the Building Management Ordinance does not abrogate the collective right of the owners to waive a breach. The 1995 Court of Appeal judgment in Hoi Luen Industrial Centre is formally declared to be not sustainable and should no longer be followed. 

This neighbourhood dispute arose because a 2/F owner of the subject building took issue with the Management Committee's decision to waive the non-compliance of a DMC provision prohibiting the erection of any sign on the exterior wall. The subject signs were certain mock window frames erected on the 9/F exterior wall. But in fact the Committee also resolved to waive the non-compliance of a number of A/C supporting structures on other walls. No illegality under the Buildings Ordinance was involved in the erection of the mock window frames. 

The Court upheld the judgments of the Lands Tribunal and the Court of Appeal below, all holding that the subject IO's waiver of breaches in the subject case was legally valid.

Lewis Law of Plowman Chambers, with Lok Ho, appeared for the IO in the Lands Tribunal, the Court of Appeal and the Court of Final Appeal in this case on the instructions of Vitus Lawyers. 

See Lewis’s profile here: https://www.plowmanchambers.com/team/lewis-law

The full judgment can be viewed here: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=181958