||Title:||CONVEYANCING AND PROPERTY ORDINANCE||Gazette Number:||25 of 2008|
|Schedule:||2||Heading:||COVENANTS AND CONDITIONS WHICH MAY BE INCORPORATED BY REFERENCE||Version Date:||11/07/2008|
(In an Agreement for Sale of a Residential, Commercial, Industrial
or Other Unit in a Completed Building)
1. RENTS, OUTGOINGS AND APPORTIONMENTS
The rents and profits shall be received and all outgoings shall be discharged by the vendor up to and inclusive of the actual day of completion, and as from but exclusive of that day all outgoings shall be discharged by the purchaser. All such rents, profits and outgoings shall, if necessary, be apportioned between the vendor and the purchaser and paid on completion.
(1) As from the date of this agreement, the vendor shall hold in trust for the purchaser the benefit of any existing policy of insurance relating to the property.
(2) The vendor does not warrant that any or any adequate policy of insurance exists relating to the property or, if any such policy exists, that it will be renewed on expiration.
(3) The vendor shall, if required, and at the expense of the purchaser obtain or consent to an endorsement of notice of the purchaser's interest on the policy of insurance relating to the property and in such case the vendor (keeping such policy in force) may require the purchaser to pay on completion a proportionate part of the premium from the date of this agreement.
3. CONDITION OF PROPERTY
The purchaser purchases with full knowledge of the physical condition of the property and takes it as it stands.
4. EASEMENTS, RIGHTS AND LIABILITIES
(1) The vendor warrants that the property is not adversely affected by any easement, right, privilege or liability of which he is aware or could have ascertained on reasonable inquiry other than-
(2) Subject to subclause (1), the property shall be conveyed subject to all easements, rights, privileges and liabilities adversely or beneficially affecting it.
(a) those disclosed in this agreement; or
(b) those of which the purchaser is aware or could have ascertained on reasonable inspection of the property.
(1) This condition applies if the property is sold subject to any tenancy and shall have effect notwithstanding any partial or incomplete reference in the agreement to any tenancy.
(2) Full particulars of all tenancies not vested in the purchaser having been furnished to him, the purchaser shall be deemed to purchase with full knowledge thereof and shall take the property subject to the rights of the tenants thereunder or by reason thereof.
(3) The vendor gives no warranty as to the amount of rent lawfully recoverable from any tenant, as to the effect of any legislation in relation to any tenancy or as to compliance with any legislation affecting the same.
(4) The vendor shall inform the purchaser of any change in the disclosed terms and conditions of any tenancy.
(5) If a tenancy subject to which the property is sold terminates for any reason, the vendor shall inform the purchaser and, on being indemnified by the purchaser against all consequential loss, expenditure or liability, shall act as the purchaser directs.
(6) Subclauses (4) and (5) shall not entitle the vendor to agree to, or permit, any change in the terms and conditions of any tenancy or its termination.
6. ERRORS, OMISSIONS AND MISSTATEMENTS
(1) No error, omission or misstatement herein or in any plan furnished or any statement made in the course of the negotiations leading to the contract shall annul the sale or entitle the purchaser to be discharged from the purchase.
(2) Any such error, omission or misstatement shown to be material shall entitle the purchaser to proper compensation, provided that the purchaser shall not in any event be entitled to compensation for matters falling within clause 3 or 5(3) hereof.
(3) No immaterial error, omission or misstatement (including a mistake in any plan furnished for identification only) shall entitle either party to compensation.
(4) Subclause (1) shall not apply where compensation for any error, omission or misstatement shown to be material cannot be assessed nor enable either party to compel the other to accept or convey property differing substantially (in quantity, quality, tenure or otherwise) from the property agreed to be sold if the other party would be prejudiced by the difference.
(5) The Misrepresentation Ordinance (Cap 284) applies to this agreement.
(1) Any requisition or objection in respect of the title shall be delivered in writing to the vendor's solicitors as soon as practicable after delivery of the title deeds and, in any event, not later than 14 days prior to the date of completion.
(2) If the purchaser shall make and insist on any objection or requisition either as to title or any matter appearing on the title deeds or otherwise which the vendor shall be unable or (on the grounds of difficulty, delay or expense or on any other reasonable ground) unwilling to remove or comply with, or if the title of the vendor shall be defective, the vendor shall notwithstanding any previous negotiation or litigation be at liberty to annul the sale in which case the purchaser shall be entitled to the return of the deposit but without costs or compensation and, if that return is made within 7 days, without interest.
8. DOCUMENTS OF TITLE
Such of the documents of title as are required for the purpose of giving title to the property shall be delivered to the purchaser. All other documents of title in the possession of the vendor shall be retained by the vendor who shall, if so required on completion of the sale, give to the purchaser a covenant for safe custody thereof and for production and delivery of copies thereof, such covenant to be prepared by the purchaser.
(Amended 25 of 2008 s. 11)
9. GOOD TITLE
The vendor shall give title to the property in accordance with section 13A of the Conveyancing and Property Ordinance (Cap 219). The vendor shall, in accordance with section 13 of that Ordinance, prove his title to the property at the vendor's own expense and shall at the like expense make and furnish to the purchaser such copies of any deeds or documents of title, wills and matters of public record as may be necessary to prove such title. The costs of verifying the title by inspection and examination, including search fees, shall be borne by the purchaser who shall also, if the purchaser requires copies of any documents in the vendor's possession relating to other premises retained by the vendor as well as to the property pay the cost of such copies.
(Amended 31 of 1988 s. 27; 25 of 2008 s. 11)
10. FAILURE OF THE PURCHASER
If the purchaser shall fail to comply with any of the terms and conditions of the agreement the deposit money shall be absolutely forfeited as and for liquidated damages (and not as a penalty) to the vendor who may (without being obliged to tender an assignment to the purchaser) rescind the agreement and either retain the property the subject of the agreement or any part or parts thereof or resell the same, either as a whole or in lots, and either by public auction or by private contract, or partly by the one and partly by the other, and subject to such conditions and stipulations as to title or otherwise as the vendor may think fit. Any deficiency arising from such resale and all expenses attending the same or any attempted resale shall be made good and paid by the purchaser as and for liquidated damages, and any increase in price realized by any such resale shall belong to the vendor. This clause shall not preclude or be deemed to preclude the vendor from taking other steps or remedies to enforce the vendor's rights under the agreement or otherwise. On the exercise of the vendor's right of rescission under the agreement the vendor shall have the right, if the agreement shall have been registered in the Land Registry, to register at the Land Registry an instrument to rescind the sale of the property. This clause shall not prevent the vendor recovering, in addition to liquidated damages, damages representing interest paid or lost by him by reason of the purchaser's failure.
(Amended 8 of 1993 s. 2)
11. FAILURE OF THE VENDOR
In the event of the vendor failing to complete the sale in accordance with the terms of the agreement it shall not be necessary for the purchaser to tender an assignment to the vendor for execution before taking proceedings to enforce specific performance of the agreement or for damages for breach of the agreement.
12. PROPER ASSURANCE
Upon completion of the sale the vendor and all other necessary parties (if any) shall execute a proper assurance to the purchaser (or his nominee or sub-purchaser) in accordance with the agreement but otherwise free from incumbrances.
13. RECEIPT OF MONEY
(1) The vendor's solicitors are the vendor's agents for the purposes of the receipt of any money due under this agreement and any payment made under the agreement to the vendor's solicitors shall be a full and sufficient discharge of the purchaser's obligation in respect of that payment.
(2) Any revocation of the authority of the vendor's solicitors under this clause shall be effective only if it-
(a) is in writing addressed to the purchaser;
(b) is delivered to the purchaser care of his solicitors at least 7 days before completion; and
(c) specifically identifies this agreement.
(Added 31 of 1988 s. 27)
(In an Equitable Mortgage of a Residential, Commercial, Industrial
or Other Unit in an Uncompleted Building)
(a) That the Government lease is good, valid and subsisting. (Amended 29 of 1998 s. 105)
(b) That the borrower shall pay all and every sum or sums of money (if any) and perform and observe the terms conditions and stipulations mentioned or contained in the agreement and on the part of the borrower to be paid performed and observed.
(c) That if default shall be made by the borrower in the performance and observance of the terms conditions and stipulations mentioned or contained in the agreement it shall be lawful for the lender to pay the said sum or sums of money and perform and observe the said terms conditions and stipulations and the borrower shall on demand repay to the lender all money expended by the lender for that purpose and that until such repayment the same shall be a charge upon the property as if the same had formed part of the loan and bear interest accordingly.
(d) That the borrower shall not without the prior consent in writing of the lender exercise any option or other right conferred on the borrower under the agreement which would result in the security created by the equitable mortgage being nullified diminished impeached or otherwise affected.
(e) That when the borrower shall be entitled under the agreement to call for an assignment of the property the borrower shall at once notify that fact to the lender and at his own cost and expense (including stamp duty) procure the execution of such assignment to himself (and not to a nominee) and pending the execution of a legal charge thereof to the lender shall hold the legal estate in the property in trust for the lender and shall deposit the assignment forthwith with the lender.
(f) That upon performance of the agreement and execution of the assignment in favour of the borrower provided the security be still at that time subsisting the borrower shall at his own cost and expense (including stamp duty) execute and complete a legal charge of the property to secure the loan such legal charge to be in the form of legal charge prescribed in the Third Schedule to the Conveyancing and Property Ordinance 1984 and contain the covenants mentioned in Part C of the Second Schedule to that Ordinance or such other form and containing such other covenants as the lender shall have required.
(g) That the borrower shall not without the prior written consent of the lender at any time during the continuance of the equitable mortgage assign charge underlet or in any manner otherwise deal with or dispose of the property or any interest therein or the equity of redemption in respect thereof or enter into any agreement so to do.
(In a Legal Charge)
(a) That the borrower shall during the continuance of the legal charge pay the premium and other moneys (if any) and Government rent and perform and observe the covenants terms and conditions by and in the Government lease reserved and contained and shall pay the property tax (if any) rates charges outgoings and impositions from time to time assessed charged or imposed on or payable in respect of the property or any part thereof and shall at all times keep the lender indemnified therefrom and from and against all actions suits expenses and claims which may be incurred or sustained on account of the non-payment of the said premium or other moneys (if any) or Government rent property tax rates charges outgoings and impositions or any part thereof or the breach or non-performance or non-observance of the said covenants terms and conditions or any of them. (Amended 29 of 1998 s. 105)
(b) That moneys due under any covenant relating to the property have been paid and any other covenants, terms and conditions relating to the property have been duly observed and performed.
(c) That the borrower shall at all times during the continuance of the legal charge-
(i) keep and maintain the property in good and tenantable repair and condition to the satisfaction of the lender and Government;
(d) That the borrower shall during the continuance of the legal charge insure and keep insured the property with some insurance company in Hong Kong to be first approved in writing by the lender against loss or damage from fire and such other risks as the lender shall think fit in the full insurable value thereof for the time being and if so required by the lender in the joint names of the borrower and the lender and duly and punctually pay all premiums and other moneys necessary for effecting and keeping up such insurance immediately upon the same becoming due and shall forthwith endorse over and deliver to the lender the policies and all current receipts for premium for the time being.
(ii) comply with all Government or other legal requirements and notices whether statutory or otherwise in respect of the property;
(iii) allow the lender and his servants or agents to enter and view the state of repair of the property at all reasonable times without the lender by so doing only being deemed to have taken possession of the property; and
(iv) pay all moneys due from time to time under and observe and perform the covenants terms and conditions contained in the deed of mutual covenant (if any).
(e) That if the borrower shall make default in payment of the said premium and other moneys (if any) or the Government rent or any part thereof or in the performance or observance of the said covenants terms and conditions or any of them or in effecting such insurance or in paying the insurance premiums or in so repairing as aforesaid or in duly complying with all such requirements and notices as aforesaid or shall fail to endorse over and deliver such policies and receipts then and in such case and so often as the same shall happen it shall be lawful for the lender to pay such premium or other moneys (if any) or Government rent and so perform and observe such covenants terms and conditions effect such insurance or repairs pay such insurance premiums or comply with all such requirements and notices as aforesaid and the borrower shall forthwith repay to the lender on demand all moneys expended by the lender in so doing and until such repayment such moneys shall be a charge upon the property as if the same had formed part of the loan and bear interest accordingly. (Amended 29 of 1998 s. 105)
(f) That the borrower shall not without the prior written consent of the lender at any time during the continuance of the legal charge assign sub-divide charge underlet part with possession or in any manner otherwise deal with or dispose of the property or any part thereof or any interest therein or enter into any agreement or arrangement so to do.