Law Society CIRCULAR 92-125

Index Reference:
Property
CIRCULAR 92-125 25 June 1992
CIVIL APPEAL NO.75 OF 1990

WONG CHIM YING v CHENG KAM WING
1. Following the decision in the above appeal, the Council has

received representations from the Consumer Council as well as
members to devise ways and means to protect purchasers from
third parties who claim to have an unregistered beneficial
interest in the property concerned. At the Council's request,
the Land Law & Conveyancing Committee has now prepared a
Practice Note, a copy of which is attached for members'
guidance.
2. The Council wishes to emphasize that the Practice Note is
only intended as a general guideline to members; it is by no
means a panacea for all ills, nor is it foolproof or
ironclad. It is not intended to and could not possibly cover
the wide variety of situations that will arise. Members
should therefore take such measures as they think fit, either
in addition to, or different from, those set out in the
Practice Note, in their clients' interests.
JOHN CROXEN
Secretary General
Practice Note following the decision
in Wong Chim Ying v. Cheng Kam Wing
Purchase
1. In any purchase of residential property, the purchaser

should b advised to inspect the property to ascertain
the identity of those residing on the property. A
clause along the lines of clause 1 of Attachment A may
be incorporated in the agreement for sale and
purchase.
2. Enquiries should also be made of the vendor's

solicitors to ascertain the identity of those residing
on the property, and their ages and relationship to
the vendor. A clause along the lines of clause 2 of
Attachment A may be incorporated in the agreement for
http://www.hklawsoc.org.hk/mem/circular/circular_print.asp?SessionID=2101... 21/9/2009
sale and purchase.
3. If there are discrepancies between what is revealed by

the inspection and what is revealed by the inquiries,
then the purchaser should be advised to make
appropriate inquiries of the vendor and also of the
occupiers, and if considered appropriate, a further
inspection should be carried out, so that the identity
of those residing on the property could be verified.
4. It is prudent to obtain from all persons who have been

identified as residing on the property as a result of
inspection and/or inquiries and who are not a party to
the sale, confirmations in an appropriate form (see
Attachment B). A clause along the lines of clause 3
of Attachment A may be incorporated in the agreement
for sale and purchase.
5. The purchaser should be advised, preferably in

writing, of the effect of not inspecting the property
and ascertaining the identity of those residing.
6. The purchaser should be advised to make an inspection

of the property on the day of completion to ensure
that the property has been vacated and to inform his
solicitors of the outcome of such inspection
immediately.
7. The procedures set out in paragraphs 1-6 above apply

whether the vendor is an individual or a company.
8. It is not necessary to carry out :-

(a) the procedures set out in paragraphs 1- above
where the property is vacant at the time of

contract;
or
(b) the procedures set out in paragraphs 1-6 above
where the property is sold subject to an
existing tenancy.
Mortgages
9. When acting for a mortgagee advancing money for the

purchase of residential property, it will be prudent
to ensure that the procedures set out in paragraphs
1-6 above have been carried out by the purchaser
and/or the mortgagee.
10. When acting for a mortgagee taking security over

property already owned and occupied by the borrower,
it will be necessary to advise the mortgagee that it
would be prudent to carry out the procedures set out
in paragraphs 1-4 above and to advise the mortgagee in
the same terms as paragraph 5 above. Confirmations in
an appropriate form (see Attachment C) should be
obtained from all those not a party to the Mortgage.
General
11.It will be prudent to ensure that people who sign a

confirmation are independently advised, i.e. by a
solicitor who is not representing the vendor or the
purchaser, to avoid any possible contention later of
"non est factum" or undue influence.
12.While it is perfectly possible for "minors", i.e.

those under 18, to obtain beneficial interests which
need to be waived, as a practical matter it is
probably sate to ignore all those under 17, for the
purposes of obtaining a confirmation.
, There is invariably a period of time between contract

and completion. A person under 18 at the date of
contract may reach 18 by the completion date. It is
therefore advisable to include all persons over 17 in
a confirmation.
ATTACHMENT A
Draft Clauses
1. The Vendor shall permit the Purchaser of the

Purchaser's agent to inspect the property upon reasonable
prior notice:-
(a) prior to the Completion Date; and

(b) upon the Completion Date but prior to completion
for the purpose of verifying delivery of vacant
possession.
2. The Vendor warrants to the Purchaser that apart from

the Vendor and domestic servants there are no adult
occupiers of the property other than those notified in
writing to the Purchaser on or prior to the date hereof
with the following particulars:-
(a) Name.
(b) I/D Card No.
(c) Relationship to Vendor.
3. The Vendor shall deliver to the Purchaser at least

three business days before completion a confirmation in the
form set out in Schedule [ ] signed by each of the
occupiers and witnessed.
ATTACHMENT B
CONFIRMATION
The Occupier:
The Property:
The Vendor:
The Purchaser:
1. The Vendor has agreed to sell the Property to the

Purchaser which sale and purchase will be completed
on (the "Completion Date").
2. The Occupier confirms that he/she has to right or
interest whatsoever in the property and undertakes to
release the Property from all fights and interests as the
Occupier may have (if any) over it as from the Completion
Date.
3. The Occupier undertakes that he/she will vacate the
Property on or before the Completion Date.
4. The Occupier confirms that he/she has been advised
that he/she should take independent legal advice before
signing this form and he/she acknowledges that he/she is
fully aware of its effect.
Dated 199.
SIGNED SEALED and DELIVERED)

)
by the Occupier in the )
)
presence of:- )
ATTACHMENT C
CONFIRMATION
The Occupier:
The Property:
The Borrower:
The Mortgagee:
1. The Borrower proposes to mortgage the Property to the

Mortgagee.
2. The Occupier confirms that he/she has no right or
interest whatsoever in the property and agrees that all
his/her interest in of rights over or in respect of the
Property (if any) shall be postponed and take effect
subject to the mortgage/legal charge as security for all
present future actual and/or contingent liabilities of the
Borrower to the Mortgagee.
3. The Occupier undertakes that he/she will vacate the
Property upon the Mortgagee exercising its rights under the
mortgage/legal charge.
4. The Occupier confirms that he/she has been advised to
take independent legal advice before signing this form and
acknowledges that he/she is fully aware of its effect.
Date 199.
SIGNED SEALED and DELIVERED)

)
by the Occupier in the )
)
presence of :- )
Printed on : 21/9/2009 12:01:43

Copyright © 2009 The Law Society of Hong Kong. All Rights Reserved. Powered by Peernet Comapny Limited.

Law Society CIRCULAR 92-125

Uploaded by

Copyright:

Available Formats

Law Society CIRCULAR 92-125

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Law Society CIRCULAR 92-125

Uploaded by

Copyright:

Available Formats

Index Reference:

CIRCULAR 92-125 25 June 1992

CIVIL APPEAL NO.75 OF 1990

1. Following the decision in the above appeal, the Council has

Practice Note following the decision

in Wong Chim Ying v. Cheng Kam Wing

1. In any purchase of residential property, the purchaser

2. Enquiries should also be made of the vendor's

3. If there are discrepancies between what is revealed by

4. It is prudent to obtain from all persons who have been

5. The purchaser should be advised, preferably in

6. The purchaser should be advised to make an inspection

7. The procedures set out in paragraphs 1-6 above apply

8. It is not necessary to carry out :-

where the property is vacant at the time of

9. When acting for a mortgagee advancing money for the

10. When acting for a mortgagee taking security over

11.It will be prudent to ensure that people who sign a

12.While it is perfectly possible for "minors", i.e.

, There is invariably a period of time between contract

1. The Vendor shall permit the Purchaser of the

(a) prior to the Completion Date; and

2. The Vendor warrants to the Purchaser that apart from

3. The Vendor shall deliver to the Purchaser at least

1. The Vendor has agreed to sell the Property to the

SIGNED SEALED and DELIVERED)

1. The Borrower proposes to mortgage the Property to the

SIGNED SEALED and DELIVERED)

Printed on : 21/9/2009 12:01:43

You might also like