On 14 March 2022, the Development Bureau of the HKSAR Government announced that it would grant extensions of time to Government works contracts and the building covenant (BC) period under land leases of private development projects, having regard to the impact on the development and construction sectors caused by the fifth wave of the COVID-19 epidemic.
The Development Bureau announced that:-
- for all Government works contracts in progress, the Government will flexibly handle requests from contractors for extensions of time due to the impact of this wave of the epidemic, for up to a maximum of six months; and
- for all leases with unfulfilled BC as at today, the original expiry of the BC period may be extended at nil premium by up to six months.
A Development Bureau spokesman said that they would also look to contractors and lessees granted an extension to handle the deadlines in their contracts with other contractual parties in a reasonable manner, such that other stakeholders in the production chain could also benefit from the extension by the Government.
In respect of development projects not subject to the restriction of BC period under the land lease (such as redevelopment projects which do not require lease modification), the Development Bureau appealed to the industry to handle the relevant contractual time limits by exercising flexibility in a sympathetic spirit during this difficult time.
It should be noted that the Development Bureau’s announcement is only confined to entitlement of extensions of time. There is no mentioning of entitlement to additional payment.
For further information, please contact:
Joseph Chung, Partner, Deacons
joseph.chung@deacons.com.hk
