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Glossary of terms
Assignment
The legal document by which the vendor of a flat
passes ownership of the flat to the purchaser. By taking the assignment, the
purchaser will become the new owner of the flat.
Agreement for sale and
purchase (ASP)
The legal document by which the vendor of a flat
agrees to sell the flat to the purchaser for a stated price. It also spells out
in detail the rights and obligations of the parties up to the date of its
completion when it will be replaced by the Assignment. It is usually preceded
by a preliminary agreement which sets out the salient points of the ASP. The
ASP is sometimes called a "formal" agreement when compared with the preliminary
agreement.
Authorised
Person
The architect, engineer, surveyor or other
professional person in charge of a development project. The Building Authority
keeps a register of all persons who are qualified to be Authorised Persons
pursuant to section 3 of the Buildings Ordinance (Cap
123).
Certificate of
compliance
A certificate to the effect that certain conditions
in the Government Lease or Conditions of Grant have been complied
with.
Completion
It can mean both "Legal Completion" and
"Construction Completion". See below for the meanings of these two
terms.
Completion
Certificate
A Completion Certificate is issued in place of an
Occupation Permit for flats in the Housing Authority's Home Ownership
Scheme.
Consent
Scheme
The Consent Scheme applies to the development of
lots where the Government Leases stipulate that the prior consent of the
Director of Lands must be obtained before the sale or other disposal of
uncompleted units to a purchaser can be made. It also covers situations where
an Exclusion Order made under the Landlord and Tenant (Consolidation) Ordinance
(Cap 7) contains clauses prohibiting the owners from entering into agreements
for the sale of uncompleted units without the Director of Lands' prior
consent.The Consent Scheme previously
administered by the Registrar General (Land Officer) is now the responsibility
of the Legal Advisory and Conveyancing Office of the Lands Department following
the dissolution of the Registrar General's Department and the transfer of its
various functions to other Government officers. The rules for granting consent
are set out in Legal Advisory and Conveyancing Office Circular Memoranda issued
from time to time by the Director of Lands (or Land Office Circular Memoranda
previously issued by the Registrar General). The conditions for granting
consent can therefore be varied to meet changing needs to protect purchasers of
uncompleted units.
Consent to
Assign
The Government will issue a Consent to Assign to a
developer who wishes to sell units with an Occupation Permit but not a
Certificate of Compliance.
Construction
Completion
The completion of the construction of the flats in a
development.
Confirmor
If an uncompleted flat is re-sold to sub-purchasers
before the legal completion of the original sale, all sub-vendors will sign in
the capacity as "confirmors" in the Assignment. The legal interests in the flat
will pass from the developer direct to the sub-purchaser at the end of the
chain.
Developer
An individual or company engaged in property
development. For the purposes of this consultation document, a developer
includes someone buying from the developer at the first sale of completed of
residential properties involving strata title.
Deed of Mutual
Covenant
The legal document which contains the agreement
among the individual flat-owners relating to the use, maintenance, repair,
insurance, payment of outgoings, management etc of a building divided into
flats.
Defect Liability
Period
The period during which developers will make good
any patent defects in the property and its installation. In the Consent Scheme,
it usually lasts 6 months from the completion of sale and purchase, namely
execution of the Assignment.
Exempted
Houses
Houses which are exempted under the Buildings
Ordinance (Application to the New Territories) Ordinance (Cap 121). Under
section 5 of Cap 121, exemption from the application of the Buildings Ordinance
is granted in respect of building works in the New Territories for the erection
of a building for non-industrial purposes, community use, or agricultural
purposes, or for the replacement of a temporary
structure.
Flats
See "Units".
Government
Lease
Also known as "Land Lease" or "Crown Lease". This
is the legal document by which the Government grants the use of land to others
for a stated period in return for payment of a premium and/or land
rent.
Legal
Completion
The final stage of the conveyancing process at which
the Assignment is executed by the parties, all the purchase moneys are paid, and
the purchaser obtains the legal ownership and usually vacant possession of the
property.
Memorandum for
Sale
See "Preliminary
Agreement".
Mortgage
To borrow money (usually from a bank) on the
security of landed property. It takes the form of an "equitable mortgage" if
the security is an uncompleted unit. Where the security is a completed unit, it
will take the form of a "legal charge".
Non-Consent
Scheme
The Non-Consent Scheme refers to property
developments where there are no lease conditions stipulating that prior consent
of the Director of Lands is required for the sale of uncompleted units. In
these cases, if the same solicitor acts for both the vendor and purchasers, the
solicitor is required to comply with Rule 5C of the Solicitors (Practice) Rules
and other Practice Directions issued by the Law Society of Hong Kong and to use
a standard form of Agreement for Sale and Purchase ("ASP") which closely follows
that used in the Consent Scheme.
Occupation
Permit
The permit issued by the Building Authority under
section 21 of the Buildings Ordinance (Cap 123) allowing the occupation of a
newly-erected building.
Preliminary
Agreement
This is also called "Provisional Agreement" or
"Memorandum for Sale". It is usually the first agreement entered into between
parties to a property transaction. Its main purpose is to spell out the salient
points of the transaction in a preliminary way. It will be replaced by a formal
Agreement for Sale and Purchase to be executed
subsequently.
Provisional
Agreement
See "Preliminary
Agreement".
Purchaser
In this consultation paper, "purchaser" means any
buyer of a completed unit.
Rescind
To cancel a contract.
Rescission
The act of cancelling a
contract.
Sales
Brochure
Any publicity material issued by developers giving
sales information about flats to be put up for sale. It usually takes the form
of sales brochures and price lists.
Units
This is used interchangeably with "flats" in this
consultation paper. In a multi-storey building, the building is divided into a
number of units, each of which under the Deed of Mutual Covenant, owns a
specified number of the "undivided" shares of the land on which the development
stands.
Uncompleted
Units
Units for which the Occupation Permit has yet to be
issued by the Building
Authority.
.