|
Hong Kong Law Reform Commission |
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
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
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 agreement
for sale and purchase. The agreement for sale and purchase is sometimes called
a "formal" agreement when compared with the preliminary agreement, and we use
the abbreviation “formal ASP” in this report to refer to the
agreement for sale and purchase.
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
This 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
report, a developer includes someone buying from the developer at the first sale
of completed 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 six 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 the 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 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 the "Provisional Agreement" or the
"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 report, "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 report. 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.