Ask owners in a Hong Kong building why they have kept a managing agent they are unhappy with, and the answer is rarely loyalty. It is usually a belief that nothing can be done until the current contract happens to expire, or until someone else takes the lead. That belief is largely mistaken. The Building Management Ordinance (Cap. 344) — the law governing Owners’ Corporations (OCs) — sets out a specific, timetabled process for owners to call a general meeting, put a termination resolution to the vote, and serve notice on the outgoing manager. Few owners ever use it, mostly because the sequence is spread across several schedules of the Ordinance and rarely explained from start to finish.
This matters because the manager is not incidental to how a building runs. It collects and spends the management fund, arranges maintenance, insurance and cleaning contracts, and is usually the first point of contact when something goes wrong, from a leaking pipe to a lift breakdown. When the relationship sours — poor communication, disputed invoices, deferred repairs — the Ordinance does not leave owners waiting for a contract to run its course. It gives them a mechanism, provided they follow it correctly.
Two Different Managers, Two Different Exit Routes
The first thing to establish is what kind of manager the building actually has, because the Ordinance treats them differently. A “DMC manager” is one appointed under the Deed of Mutual Covenant (DMC) itself — typically the developer’s original appointment, which continues after the OC is formed unless and until the OC replaces it. A “contract manager” is one the OC itself later engaged, under a separate management agreement negotiated after formation.
For a DMC manager, the Ordinance’s own termination mechanism under Schedule 7 to the BMO applies directly. For a contract manager, the position is different: where the management agreement itself sets out how the appointment can be ended, the OC generally has to follow those contractual terms first. Only where the contract is silent on termination does the OC fall back on the same Schedule 7 mechanism used for DMC managers. Skipping this check is one of the more common ways owners lose months — trying to force through a Schedule 7 vote on a manager whose own contract already specifies, say, three months’ notice on either side with no vote required at all.
| Aspect | DMC Manager | Contract Manager |
|---|---|---|
| Termination route | Schedule 7 to the BMO applies directly | Governed by the management agreement’s own termination clause, if it has one |
| Vote needed | Majority of votes cast, plus owners holding not less than 50% of aggregate shares entitled to vote | Only if the agreement itself requires a vote; otherwise as the contract specifies |
| Notice to the manager | Not less than 3 months, or payment in lieu, under paragraph 7(2) of Schedule 7 | Whatever notice period the agreement specifies |
| If the contract is silent on termination | Not applicable — already governed by Schedule 7 | Falls back to the same Schedule 7 mechanism |
Step One: Getting a General Meeting Onto the Calendar
Nothing in this process happens without a general meeting, and the Management Committee (MC) does not have to wait for one to fall due by chance. Under Schedule 2 to the BMO, the MC chairman must convene a meeting at the written request of not less than 5% of the owners in the building, for the purpose stated in that request — which can simply be to consider terminating the manager’s appointment. In a building with 100 owners, five acting together are enough to trigger this.
Once a valid request is received, the chairman must hold the meeting within 45 days. Owners are then entitled to at least 14 days’ written notice under Schedule 3, delivered personally, by post, or left at each flat, and displayed prominently in the building. Schedule 3 also provides that no resolution has any effect unless it was clearly set out in that notice of meeting — so the wording matters. A notice that says the meeting will “discuss management issues” is not enough; it needs to state plainly that a resolution to terminate the manager’s appointment will be proposed.
Step Two: Reaching Quorum, and What Happens If You Don’t
A general meeting can only transact business if it is quorate. Under Schedule 3, the normal quorum is 10% of the owners, rising to 20% where the resolution concerns dissolving the MC itself, counted by number of owners rather than by the size of their shareholding. Owners who cannot attend in person may vote by proxy, using the statutory form and lodging it with the MC secretary at least 48 hours before the meeting; a corporate owner can instead authorise a natural person to attend and vote in its place, following a similar notice procedure.
If quorum is not reached, Schedule 3 allows the meeting to be adjourned rather than treated as a failed attempt, with the same procedural requirements applying to the resumed session. Owners who are serious about a termination vote are generally better served lining up proxies in advance than hoping for a large turnout on the day itself.
Step Three: The Vote Has to Clear Two Thresholds, Not One
This is where owners most often misjudge the numbers. Terminating a DMC manager’s appointment is not decided by a simple majority of whoever turns up. Under paragraph 6 of Schedule 7 to the BMO, the resolution must be passed by a majority of the votes cast and be supported by owners holding not less than 50% of the aggregate shares in the building among those entitled to vote on the matter. It is a double test — enough votes on the day, and enough underlying ownership behind them.
In practice, this means a resolution can fail even after a lopsided show of hands, if the owners voting for it do not collectively hold half the building’s shares. That is a real risk in developments where ownership is uneven across unit sizes, or where a large commercial, car park or clubhouse component sits under separate, heavily weighted shares. It is worth checking the DMC’s schedule of shares before assuming a straightforward headcount majority will be enough.
Step Four: Notice to the Outgoing Manager
Passing the resolution is not the end of the process. Under paragraph 7(2) of Schedule 7, the resolution itself must specify either a notice period of not less than three months, or that the OC will instead pay the manager compensation equivalent to its remuneration for that period in lieu of notice. The OC must then notify the manager in writing within 14 days of the meeting, attaching a copy of the resolution.
For a contract manager whose agreement already sets its own termination terms, those contractual notice provisions apply instead of the Schedule 7 timetable. The Schedule 7 route is a fallback for when the contract is silent on termination, not a way to shorten a longer notice period the OC itself already agreed to when it signed the management agreement.
After the Vote: What the Outgoing Manager Must Hand Over
A termination vote only solves half the problem if the handover is not managed properly. Under paragraph 8 of Schedule 7, an outgoing manager must deliver to the owners’ committee, or to the manager appointed in its place, any movable property relating to the management of the building that is in its possession, within 14 days of ceasing to act.
The outgoing manager also has two months to deliver the books, accounting records and related documents needed to prepare financial statements, and to prepare its own income and expenditure account and balance sheet for its period as manager, arranged for audit. An OC that lines up a replacement manager before the old one’s notice period ends, and diarises these two deadlines, avoids the common gap where nobody can say where the accounts, the insurance file or the fire-safety records actually are.
Where Owners Trip Themselves Up
A handful of practical points separate a clean handover from a drawn-out dispute. Check the actual management agreement before assuming Schedule 7 applies at all; many OCs discover midway through the process that their contract manager’s agreement already sets a different route with its own notice period. Get the resolution wording exactly right in the notice of meeting, since Schedule 3 makes an unstated resolution void from the outset. And remember that appointing a replacement manager, and any large-scale maintenance work that follows, now sits under tighter procurement and tendering rules introduced by the Building Management (Amendment) Ordinance 2024 — changing manager does not exempt the OC from those requirements.
The mechanism exists precisely so that owners are not stuck with a managing agent purely because nobody knew how to change it. It takes a written request from a handful of owners, a properly worded notice, a vote that clears both a majority and a share threshold, and formal notice and handover deadlines for the outgoing manager — in that order. Getting the sequence right the first time is far cheaper, in both time and legal fees, than restarting after a procedural misstep.