CONVEYANCING AND PROPERTY ORDINANCE

CONVEYANCING AND PROPERTY ORDINANCE

LAWS OF HONG KONG

CONVEYANCING AND PROPERTY

ORDINANCE

CHAPTER 219





CHAPTER 219

CONVEYANCING AND PROPERTY ORDINANCE

ARRANGEMENT OF SECTIONS

Section Page

PART I

PRELIMINARY
1. Short title ...........................4
2. Interpretation ........................4

PART II

GENERAL RULES AFFECTING PROPERTY

3. Land contracts to be in writing .......5
4. Legal estate to be disposed of etc. by deed 5
5. Certain instruments to be in writing ..6
6. Creation of interest in land by parol .6
7. Savings in regard to sections 5 and 6 .7
8. Severance of joint tenancy ............7
9. Presumption in favour of tenancy in common 7
10. Corporation may hold as joint tenant .7
11. Presumption of survivorship ..........7
12. Application to court by vendor and purchaser 8
13. Proof of title and recitals ..........8
14. Conversion of equitable interest to legal estate where right to Crown lease 9
14A. Modification of Crown lease .........10

PART III

INSTRUMENTS

15. Construction of words and expressions 11
16. What an assignment is deemed to include 12
17. Assignment passes whole estate ......12
18. Receipt in body of an instrument ..................................................................... 12
19. Execution of deed by individual ..... 13
20. Execution of deed by corporation...................................................................... 13
21. Rights as to execution ................................ 14
22. Presumption as to capacity .......... 14
23. Presumption as to due execution ..... 14
24. Reservation of rights ............... 14
25. Agreements, assignments etc. by person with or to himself 14
26. Benefits to non-parties ..................... 15
27. Description of deeds ................15
28. Supplemental instruments ............is
29. Effect of licences or permits granted to lessees 15
30. Apportionment of conditions on severance ............................ 16





Section Page

31. Rent and benefit of lessee's covenants to run with the reversion 16
32. Obligation of lessor's covenants to run with reversion 17
33. Lessor or mortgagee to have benefit of informal insurance 17
34. Protection of purchaser against forfeiture under covenant for insurance 18

PARTIV

FORMS COVENANTS AND
CONDITIONS

35. Implied covenants ...................is

36. Other covenants and conditions ..................................
.........................19

37. Standard forms ........................................................... 19
38. Protection of solicitors etc . ...... 19
39. Benefit of covenants relating to land 19
40. Burden of covenants relating to land ........................ 20
41. Enforcement of covenants ............... 20

42. Saving of covenants, terms and conditions 21
43. Effect of agreement with 2 or more jointly 21

PART V

MORTGAGES

44. Mortgage of legal estate ............22

45. Tacking ......................................................................... 23
46. Conversion of equitable mortgage .... 23
47. Inspection of title deeds ........... 23
48. Mortgage to 2 or more jointly ............................ 23

49. Action for possession of land by mortgagor 24
50. Power to appoint a receiver .........24
51. Powers of mortgagee and receiver ....25

52. Protection of purchaser .............................................................................. 25
53. Sale by mortgagee ................... 25
54. Application of money received ....... 26
55. Mortgagee's receipt ................. 26

56. Discharge of mortgage by signed receipt 26
56A. Floating charges ...................27
57. [Amendment incorporated] ............27

PART VI

RELIEF AGAINST
FORFEITURE

58. Restrictions on and relief against forfeiture of leases and under-leases 27

PART VII

VOIDABLE
DISPOSITIONS

59. Purchase not voidable for undervalue 29
60. Voidability of dispositions to defraud creditors 29







61. Voluntary disposition of land: how far voidable as against purchasers , ... 29





Section Page
PART VIII

MISCELLANEOUS

62. Service of notices ...................30
63. [Amendment incorporated] .............30
64. Amendment of Schedules ...............30
First Schedule. Implied Covenants ........30
Second Schedule. Covenants and Conditions which may be incorporated by reference 32
Third Schedule. Forms ....................36
Fourth Schedule. Powers of Mortgagee and Receiver 41





CHAPTER 219

CONVEYANCING AND PROPERTY

To make provision relating to conveyancing and the law of property; to make
provision concerning agreements and deeds relating to land and other
agreements; to make provision for the acquisition and holding of land and
other property; to provide for standard agreements and deeds relating to land;
to imply certain covenants and other provisions in agreements and deeds
relating to land; to revise and consolidate certain miscellaneous provisions
relating to land and other matters; and for connected purposes.

[1 November 19841

Originally 62 of 1984 27 of 1986, L.N. 387187,31 of 1988

PART 1

PRELIMINARY

Short title
1. This Ordinance may be cited as the Conveyancing and Property

Ordinance.

Interpretation
2. In this Ordinance, unless the context otherwise requires-
,,assignment' includes-

(a)the transfer of the whole of the interest in land held under a Crown lease;
(Amended, 31 of 1988, s. 2)

(b) a legal charge;

(e) a lease (other than a Crown lease);

(d) a surrender;

(e) an assent; and

(f) every other assurance or conveyance of land by any instrument;

'bankruptcy' includes winding up;

'borrower', where used in the First, Second and Third Schedules, includes

'mortgagor';

'equitable interest' means any estate, interest or charge in or over land which is

not a legal estate or a freehold;

'instrument' means any document having legal effect except a will;

'land' includes-

(a) land covered by water;





(b) any estate, right, interest or easement in or over any land;

(bb) the whole or part of an undivided share in land and any estate, right,
interest or easement in or over the whole or part of an undivided share in
land; and (Added, 31 of 1988, s. 2)

(e)things attached to land or permanently fastened to anything attached to
land;

'legal charge' means a mortgage expressed to be a legal charge;

'legal estate' means

(a) a term of years absolute in land;

(b)the legal interest in any easement, right or privilege in or over land for an
interest equivalent to a term of years absolute; and

(e) a legal charge;

'lender', where used in the First, Second and Third Schedules, includes

'mortgagee';

'mortgage' means a security over land for securing money or money's worth;

'mortgage money' means the money, or money's worth, secured by a

mortgage;

'mortgagee' includes any person claiming under a mortgagee;

'mortgagor' includes any person claiming under a mortgagor;

',sale', in relation to the sale of land, includes the disposition of all or part of the

vendor's estate and interest under a Crown lease;

'term of years absolute' includes a term for less than a year, for a year or years

and a fraction of a year and from year to year.

PART 11

GENERAL RULES AFFECTING PROPERTY

Land contracts to be in writing

3. (1) Subject to section 6(2), no action shall be brought upon any contract for
the sale or other disposition of land unless the agreement upon which such action
is brought, or some memorandum or note thereof, is in writing and signed by the
party to be charged or by some other person lawfully authorized by him for that
purpose.

(2) This section applies to contracts or other dispositions whenever made and
does not affect the law relating to part performance or sales by the court.

[cf. U.K. 1925 c. 20, s. 401

Legal estate to he disposed of etc. by deed

4. (1) A legal estate in land may be created, extinguished or disposed of only
by deed.





(2) This section does not apply to-

(a) an assent in writing by a personal representative;

(b)a disclaimer made in accordance with section 59 of the Bankruptcy
Ordinance (Cap. 6) or section 268 of the Companies Ordinance (Cap. 32);

(e)a surrender by operation of law, including a surrender which may, by law,
be effected without writing;

(d)the grant, disposal or surrender of a lease taking effect in possession for a
term not exceeding 3 years (whether or not the lessee is given power to
extend the term) at the best rent which can be reasonably obtained
without a premium;

(e) other assurances not required by law to be made in writing;

(f) a receipt not required by law to be under seal;

(g)a vesting order or vesting declaration by a court or other competent
authority;

(h)a creation, extinguishment or disposal of a legal estate in land by
operation of law.

[cf. U.K. 1925 c. 20, s. 521

Certain instruments to be in writing

5. (1) Subject to section 6-

(a)no equitable interest in land can be created or disposed of except by
writing signed by the person creating or disposing of the same, or by his
agent thereunto lawfully authorized in writing, or by will, or by operation
of law;

(b)a declaration of trust respecting land or any interest therein shall be
manifested and proved in writing signed by the person who is able to
declare such trust or by his will. (Amended, 31 of 1988, s. 3)

(2) This section does not affect the creation or operation of resulting, implied
or constructive trusts.

[cf. U.K. 1925 c. 20, s. 531

Creation of interest in land by parol

6. (1) All interests in land created by parol and not put in writing and signed by
the persons creating the same, or by their agents thereunto lawfully authorized in
writing, have, notwithstanding any consideration having been given for the same,
the force and effect of interests at will only.

(2) Nothing in section 3 or 5 or in subsection (1) shall affect the creation by
parol of leases taking effect in possession for a term not exceeding 3 years (whether
or not the lessee is given power to extend the term) at the best rent which can be
reasonably obtained without a premium.

[cf. U.K. 1925 e. 20, s. 54]





Savings in regard to sections 5 and 6

7. Nothing in section 5 or 6 shall-

(a) invalidate dispositions by will;

(b)affect any interest validly created before the commencement of this
section;

(c)affect the right to acquire an interest in land by virtue of taking
possession; or

(d) affect the operation of the law relating to part performance.
[cf. U.K. 1925 c. 20, s. 55]

Severance of joint tenancy

8. (1) A joint tenancy of an estate or interest in land may be severed at
law only by-

(a) a notice served by a joint tenant on the other joint tenants; or

(b) an instrument.

(2) A joint tenancy of an estate or interest inland maybe severed inequity
by a notice served by a joint tenant on the other joint tenants or by any other
method that is effective in equity or that would, but for subsection (1), be
effective at law.
(Replaced, 31 of 1988, s. 4)

Presumption in favour of tenancy in common

9. (1) Where a tenancy in the same estate or interest in land vests in 2 or
more persons under an instrument or a will, it shall be presumed, unless the
contrary intention is expressed in that instrument or will, that the tenancy vests
in those persons as tenants in common rather than as joint tenants.

(2) This section shall not apply to any instrument or will made before the
commencement of this section.

(3) This section shall not apply to a tenancy vesting in trustees or personal
representatives. (Added, 31 of 1988, s. 5)

Corporation may hold as joint tenant

10. (1) A corporation shall be capable of acquiring and holding any
property in joint tenancy in the same manner as if it were an individual.

(2) Where a corporation is a joint tenant of any property, on its dissolu-
tion, that property shall devolve on the other joint tenant.
[cf. U.K. 1899 c. 20, s. 11

Presumption of survivorship

11. (1) Except for the purposes of section 4(11) of the Intestates' Estates
Ordinance (Cap. 73), where, after the commencement of this section, 2 or more
persons die in circumstances rendering it uncertain that any one of them, or





which of them, survived the other or others, such deaths shall, for all purposes
affecting the title to property, be presumed to have occurred in order of seniority,
and accordingly the younger shall be deemed to have survived the elder.

[cf. U.K. 1925 c. 20, s. 1841

(2)-(3) [Amendments incorporated]

Application to court by vendor and purchaser

12. (1) A vendor or purchaser of land may apply by petition or by originating
summons to the court in respect of any question arising out of or connected with
any contract for the sale or exchange of land (not being a question affecting the
existence or validity of the contract or relating to compensation payable by the
Crown or a public body), and the court may make such order upon the petition or
originating summons and as to costs as to the court appears just.

(2) In this section, 'court' means the High Court unless the vendor and
purchaser submit to the jurisdiction of the District Court.

[cf. U.K. 1925 c. 20 s. 491

Proof of title and recitals

13. (1) Unless the contrary intention is expressed, a purchaser of land shall be
entitled to require from the vendor, as proof of title to that land, only production of
the Crown lease relating to the land sold and

(a) proof of title to that land-

(i) where the grant of the Crown lease was less than 15 years before the
contract of sale of that land, extending for the period since that grant;or

(ii) in any other case, extending not less than 15 years before the
contract of sale of that land commencing with an assignment, a mortgage
by assignment or a legal charge, each dealing with the whole estate and
interest in that land; (Replaced, 31 of 1988, s. 6)

(b)production of any document referred to in the assignment, mortgage or
charge mentioned in paragraph (a) creating or disposing of an interest,
power or obligation, which is not shown to have ceased or expired and
subject to which any part of that land is disposed of, and

(c)production of any power of attorney under which any document
produced is executed where that document was executed less than 15
years before the contract of sale of that land. (Amended, 31 of 1988,s.6)

(2) Where this section requires the production of any document, it shall be
sufficient to produce a copy

(a) attested, before 1 November 1984, by 2 solicitors' clerks; or

(b) certified by a public officer or a solicitor,

to be a true copy.(Amended, 31 of 1988, s. 6)





(3) Subject to subsection (1), where any document produced as proof of title to
any land contains a recital of any document dated or made before the date from
which a vendor is required to prove title, the purchaser of that land shall assume,
unless the contrary is proved, that

(a) the recital is correct;

(b) the recital gives all the material contents of the document recited; and

(c) the document recited was duly executed and perfected.

(4) A recital, statement, and description of any fact, matter or party contained in
any document of title, mortgage, declaration or power of attorney relating to any
land and dated or made not less than 15 years before the contract of sale of that
land shall, for the purposes of any question as to proof of title concerning the
parties to that contract and unless the contrary is proved, be sufficient evidence of
the truth of that recital, statement and description.

(4A) Where any document is or has been produced by a vendor as proof of title
to any land and that document purports to have been executed, not less than 15
years before the contract of sale of that land, under a power of attorney, it shall for
the purposes of any question as to the title to that land be conclusively presumed

(a) as between the parties to that contract; and

(b)in favour of the purchaser under that contract as against any other
person,

that the power of attorney-

(i) was validly executed;

(ii) was in force at the time of the execution of that document; and

(iii) validly authorized the execution of that document. (Added, 31 of 1988,s.6)

(5) This section affects only the rights and obligations of the parties to a
contract for the sale of land entered into after the commencement of this section.

Conversion of equitable interest to legal estate
where right to Crown lease

14. (1) Where a person has a right to a Crown lease of any land upon
compliance with any conditions precedent, then, upon compliance with those
conditions

(a)the equitable interest under that right shall become a legal estate in that
land as if held under a Crown lease issued in accordance with that right;
and (Amended, 31 of 1988, s. 7)

(b)for the purposes of section 42 and any other law, such a Crown lease shall
be deemed to have been issued upon compliance with those conditions.

(2) Where, under an agreement for a Crown lease entered into before 1 January
1970, a person has a right to a Crown lease upon compliance with any conditions
precedent he shall be deemed, for the purposes of this section, to have complied
with.those conditions on the commencement of this section.





(3) Where under an agreement for a Crown lease entered into on or after 1
January 1970, a person has a right to a Crown lease upon compliance with any
conditions precedent, he shall be deemed, for the purposes of this section, to have
complied with those conditions

(a)upon the issue by the Crown of a certificate that those conditions have
been complied with and the registration of that certificate in the Land
Office under the Land Registration Ordinance (Cap. 128); or

(b)upon the endorsement by the Crown on the Crown lease of a note to the
effect that those conditions have been complied with and the registration
of a copy of that endorsement in the Land Office under the Land
Registration Ordinance; or

(c)upon the entry on the register kept in the Land Office under the Land
Registration Ordinance relating to the land of a note to the effect that
those conditions have been complied with. (Amended, 31 of 1988,s. 7)

(4) Where a person has a right to a Crown lease of any land and that right is
not subject to any conditions precedent

(a)the equitable interest under that right shall become a legal estate in that
land as if held under a Crown lease issued in accordance with that right;
and

(b)for the purposes of section 42 and any other law, such a Crown lease shall
be deemed to have been issued on the commencement of the
Conveyancing and Property (Amendment) Ordinance 1988 (31 of 1988) or
on the date of the grant of that right, whichever is the later. (Added, 31 of
1988, s. 7)

(5) Where a person has a right to a Crown lease of any land and that land is
partitioned by assignment or otherwise by deed, this section shall apply to each part
of that land constituted by that partition, as it applies to the whole of that land, as if
there were a right to a Crown lease of each such part. (Added, 31 of 1988, s. 7)

(6) Where a person has a Crown lease, or a right to a Crown lease, of any land
and additional land is granted to that person with the intent that he should hold it
as part of the land leased, this section shall apply to that additional land as if that
additional land were part of the land originally leased and held subject to any
further conditions precedent imposed when that additional land was granted.
(Added, 31 of 1988, s. 7)

Modification of Crown lease

14A. (1) Any modification in writing by the Crown of the covenants, terms or
conditions of a Crown lease shall have the same effect as if made by deed.

(2) Subsection (1) applies to a modification made before or after the
commencement of the Conveyancing and Property (Amendment) Ordinance 1988.

(Added, 31 of 1988,s.8)





PART 111

INSTRUMENTS

Construction of words and expressions

15. Unless the contrary intention appears, in any instrument affecting
land made after the commencement of this section-

(a)any definition used in, or, by this section, incorporated into, that
instrument shall extend to the grammatical variations and cognate
expressions of the word or expression defined;

(b)words and expressions importing the masculine gender include the
feminine; (Amended, L.N. 387187)

(c)words and expressions in the singular include the plural and words
and expressions in the plural include the singular; (Amended, L.N.
387187)

(d)Chinese words and terms shall be construed according to Chinese
language and custom and, if there is any conflict between Chinese
words and terms and English words used in the instrument, the
meaning of the English words shall prevail; and

(e) 'act' includes a series of acts, an omission or a series of omissions;

'Colony' and 'Hong Kong' mean the area of land and the area of
Deep Bay and Mirs Bay lying within the boundaries specified in
the Second Schedule to the Interpretation and General Clauses
Ordinance (Cap. 1) and the territorial waters appertaining
thereto;

'contravene' includes failure to comply;

'court' means any court of Hong Kong of competent jurisdiction;

'Crown lease' means any lease granted by the Crown, any instrument
whereby the term of the Crown lease may have been extended or
the provisions thereof varied and any agreement for a Crown
lease;

'document' means any matter written, expressed or described upon
any substance by means of letters, characters, figures or marks or
by a combination of these;

'Government' means the Government of Hong Kong;

'Kowloon' means the area specified in the Fourth Schedule to the
Interpretation and General Clauses Ordinance;

'law' means any law for the time being in force in, having legislative
effect in, extending to or applicable to Hong Kong;

'month' means calendar month;

'New Kowloon' means the area specified in the Fifth Schedule to the
Interpretation and General Clauses Ordinance;

'New Territories' means the territories leased to Great Britain by the
Emperor of China under the Convention dated 9 June 1898;





,,occupy' includes use, inhabit, be in possession of or enjoy the land to
which the word relates otherwise than as a mere servant or for the
mere purpose of the care, custody or charge thereof.,

'or', 'other' and 'otherwise' shall be construed disjunctively and not as
implying similarity, unless the word 'similar' or some other word of
like meaning is added;

'per cent', when used in relation to a rate of interest payable in any
circumstances, means the rate of interest specified payable in respect
of a year, unless it is expressly provided that it is payable in respect
of any other period;

'person' includes any public body or body of persons, corporate or
unincorporate;

'power' includes any privilege, authority or discretion;

'public holiday' and 'general holiday' mean any day which is a general
holiday under the Holidays Ordinance (Cap. 149);

'registered', in relation to a document, means registered under any law
applicable to the registration of that document;

'sign' includes, in the case of a person unable to write, the affixing or
making of his seal, mark, thumbprint or chop;

'year' means a year according to the Gregorian calendar.

What an assignment is deemed to include

16. (1) Unless the contrary intention is expressed in the assignment, an
assignment shall operate to assign, with the land, all rights, interests, privileges,
easements or appurtenances in, over, belonging or appertaining to that land or at
the time of the assignment used, held, occupied or enjoyed with that land and
things attached to the land or permanently fastened to anything attached to the
land. (Amended, 31 of 1988, s. 9)

(2) This section shall not operate to give to any person a better title than that
assigned or any better title than that enjoyed by the assignor.

[cf. U.K. 1925 c. 20, s. 621

Assignment passes whole estate

17. Unless the contrary intention is expressed in the assignment, an
assignment shall operate to assign all the estate, right and interest in the land
assigned which the assignor has in that land and which he has the power to assign.

[cf. U.K. 1925 c. 20, s. 631

Receipt in body of an instrument

18. (1) A receipt for consideration in the body of an instrument shall be a
sufficient discharge to the person paying the consideration and, in favour of any
other person acting on the faith of the receipt, shall be sufficient evidence of
payment.





(2) A solicitor producing an instrument containing a receipt for consideration
shall be deemed to be authorized to receive that consideration unless the person
liable to pay that consideration is served with a notice in writing stating that the
solicitor is not so authorized.

[cf' U.K. 1925 c. 20, ss. 67, 68 691

Execution of deed by individual

19. (1) A deed by an individual shall be signed by him.

(2) A document shall be presumed to have been scaled by an individual if the
document signed by him

(a) describes itself as a deed; or

(b) states that it has been sealed.. or

(c)bears any mark, impression or addition intended to be or to represent a seal
or the position of a seal.

(3) Subsection (1) applies only to documents executed after the commencement
of this section.

(4) Subsection (2) applies to a document executed before or after the
commencement of this section.

(5) This section does not affect any other law by which an individual may
authorize another person to sign a deed on his behalf. (Added, 31 of 1988,s. 10)

Execution of deed by corporation

20. (1) In favour of a person dealing with a corporation aggregate in good faith,
his successors in title and persons deriving title under or through him or them, a
deed shall be deemed to have been duly executed by the corporation if the deed
purports to bear the seal of the corporation affixed in the presence of and attested by
its secretary or other permanent officer of the corporation and a member of the
corporation's board of directors or other governing body or by 2 members of that
board or body. (Amended, 31 of 1988,s. 11)

(2) Where a person is empowered to execute a deed by a corporation, he may
execute the deed as agent by signing the name of the corporation or his own name
and by affixing his own seal. (Amended, 31 of 1988, s. 11)

(3) Where a corporation aggregate is empowered to execute a deed by another
person, an officer appointed for that purpose by the board of directors or other
governing body of the corporation may execute the deed in the name of such other
person; and where a deed purports to be so executed then the deed shall, in favour
of a person dealing with the corporation in good faith, be deemed to have been
executed by an officer duly authorized.

(4) This section applies to transactions wherever effected, but only to deeds
executed after the commencement of this section; except that, in the case of powers
of appointment of an officer, they apply whether the power was conferred or the
appointment was made before or after the commencement of this section.

[cf. U.K. 1925 c. 20, s. 74]





Rights as to execution

21. A person shall be entitled, at his own cost, to require that an assignment to
him be executed in the presence of his agent.

[cf. U.K. 1925 c. 20, s. 751

Presumption as to capacity

22. A party to any instrument shall be presumed, until the contrary is proved,
to have full legal capacity to execute that instrument, to bind himself in terms of that
instrument and to dispose of or hold any property or rights assigned under that
instrument.

Presumption as to due execution

23. An instrument appearing to be duly executed shall be presumed, until the
contrary is proved, to have been duly executed.

Reservation of rights

24. A reservation of any rights or interests in land may be effected in an
assignment of the land in respect of which those rights are exercisable or interests
are vested and a regrant of the rights or interests reserved shall not be necessary.

Agreements, assignments etc. by person with or to himself

25. (1) A person may, in one legal capacity, assign to, or agree or covenant
with, himself in another legal capacity.

(2) An assignment, agreement or covenant

(a) by a person to, or with. himself and another or others; or

(b) by a person and another or others to, or with, himself,

shall, unless the contrary intention is expressed and otherwise without prejudice to
its effect in law, be enforceable between the parties as if that assignment, agreement
or covenant were made

(i) in the case of paragraph (a), to, or with, the other or others alone; or (ii) in
the case of paragraph (b), by the other or others alone.

(3) This section shall not prevent any assignment, agreement or covenant
being set aside on the grounds of fraud or breach of trust or other fiduciary
relationship.

(4) This section shall apply to an assignment, agreement and covenant made
or entered into before or after the commencement of this section.

(5) This section shall apply to assignments, agreements and covenants
relating to land and other property.

[cf. U.K. 1925 c. 20, ss. 72 821





Benefits to non-parties

26. A person may take an immediate or other interest granted to him in land or
the benefit of any condition, right of entry, covenant or agreement granted to him
over or in respect of land, although he may not be named as a party to the
instrument.

[cf. U.K. 1925 c. 20, s. 56(1)l

Description of deeds

27. (1) A deed between parties, to effect its objects, has effect as an indenture
although not indented or expressed to be an indenture.

(2) A deed, whether or not an indenture, may be described as a deed simply or
according to the nature of the transaction intended to be effected.

[cf. U.K. 1925 c. 20, ss. 56(2) 571

Supplemental instruments

28. Any instrument (whether executed before or after the commencement of this
section) expressed to be supplemental to a previous instrument shall be read and
have effect as if the supplemental instrument contained the full recital of the
previous instrument.

[cf. U.K. 1925 c. 20, s. 581

Effect of licences or permits granted to lessees

29. (1) Where a licence or permit is granted to a lessee to do any act, the licence
or permit, unless otherwise expressed, extends only to

(a) the permission actually given; or

(b) the specific breach of any provision or covenant referred to; or

(c) any other matter thereby specifically authorized to be done,

and the licence or permit does not prevent any proceeding for any subsequent
breach unless otherwise specified in the licence or permit.

(2) Notwithstanding any such licence or permit-

(a)any right of re-entry contained in the lease remains in full force and is
available as against any subsequent breach of covenant, condition or
other matter not specifically authorized or waived, in the same manner as if
no licence or permit had been granted; and

(b)any right of re-entry remains in force in all respects as if the licence or
permit has not been granted, except in respect of the particular matter
authorized to be done.

(3) Where in any lease there is a right of re-entry on the lessee assigning,
subletting or doing any other specified act without a licence or permit, and a licence
or permit is granted

(a)to any one of 2 or more lessees to do any act, or to deal with his share or
interest; or

(b)to any lessee, or to any one of 2 or more lessees to assign or underlet part
only of the land, or to do any act in respect of part only of the land,





the licence or permit does not operate to extinguish the right of re-entry in case of
any breach of covenant or condition by the co-lessee of another share or interest in
the land, or by the lessee of the rest of the land (as the case may be) in respect of
such share or interest or remaining land, but the right of re-entry remains in force in
respect of the share, interest or land not the subject of the licence or permit.

(4) This section applies to a licence or permit granted before or after the
commencement of this section.

(5) Nothing in this section shall affect the provisions of the Crown Rights (Re-
entry and Vesting Remedies) Ordinance (Cap. 126).

[cf. U.K. 1925 c. 20, s. 1431

Apportionment of conditions on severance

30. (1) Notwithstanding the severance by assignment or otherwise of the
reversionary estate in any land comprised in a lease, and notwithstanding the
avoidance or cesser in any other manner of the term granted by a lease as to part
only of the land comprised therein, every condition or right of re-entry, and every
other condition contained in the lease, shall be apportioned, and shall remain
annexed to the severed parts of the reversionary estate as severed, and shall be in
force with respect to the terms whereon each severed part is reversionary, or the
term in the part of the land as to which the term has not been surrendered, or has not
been avoided or has not otherwise ceased, in like manner as if the land comprised in
each severed part, or the land as to which the term remains subsisting, as the case
may be, had alone originally been comprised in the lease.

(2) In this section 'right of re-entry' includes a right to determine the lease by
notice to quit or otherwise or to give notice or make an application under any law
which may result in the determination of the lease or the grant of a new lease; but
where the notice or application is served by a person entitled to a severed part of
the reversion so that it extends to part only of the land demised, the lessee may
within one month determine the lease in regard to the rest of the land by giving to
the owner of the reversionary estate therein a counter notice effective at the same
time as the notice or application served by the person entitled to the severed part of
the reversion is effective to determine the lease of that part.

(3) This section applies to leases made before or after the commencement of
this section and whether the severance of the reversionary estate or the partial
avoidance or cesser of the term was effected before or after such commencement.

[cf. U.K. 1925 c. 20, s. 1401

Rent and benefit of lessee's covenants to run with the reversion

31. (1) Rent reserved by a lease, and the benefit of every covenant or provision
therein contained, having reference to the subject-matter thereof, and on the
lessee's part to be observed or performed, and every condition of re-entry and other
condition therein contained, shall be annexed and incident to and shall go with the
reversionary estate in the land, or in any part thereof, immediately expectant on the
term granted by the lease, notwithstanding





severance of that reversionary estate, and without prejudice to any liability
affecting a covenantor or his estate.

(2) Any rent, covenant or provision mentioned in subsection (1) shall be
capable of being recovered, received, enforced, and taken advantage of, by the
person from time to time entitled, subject to the term granted by the lease, to the
income of the whole or any part, as the case may require, of the land leased.

(3) Where the person mentioned in subsection (2) becomes entitled as
mentioned in that subsection by assignment or otherwise, the rent, covenant or
provision mentioned in subsection (1) may be recovered, received, enforced or
taken advantage of by him notwithstanding that he becomes so entitled after the
condition of re-entry or forfeiture has become enforceable, but this subsection
does not render enforceable any condition of re-entry or other condition waived
or released before such person becomes entitled as aforesaid.

(4) This section applies to leases made before or after the commencement
of this section, but does not affect the operation of-

(a) any severance of the reversionary estate; or

(b)any acquisition by assignment or otherwise of the right to receive or
enforce any rent covenant or provision,

effected before the commencement of this section.

(5) Nothing in this section shall affect the provisions of the Crown Rights
(Re-entry and Vesting Remedies) Ordinance (Cap. 126).
[cf. U.K. 1925 c. 20, s. 1411

Obligation of lessor's covenants to run with reversion

32. (1) The obligation under a condition or of a covenant entered into by
a lessor with reference to the subject-matter of the lease shall, if and as far as the
lessor has power to bind the reversionary estate immediately expectant on the
term granted by the lease, be annexed and incident to and shall go with that
reversionary estate, or the several parts thereof, notwithstanding severance of
that reversionary estate, and may be taken advantage of and enforced by the
person in whom the term is from time to time vested by assignment, devolution
in law, or otherwise; and, if and as far as the lessor has power to bind the person
from time to time entitled to that reversionary estate, the obligation aforesaid
may be taken advantage of and entered against any person so entitled.

(2) This section applies to leases made before or after the commencement
of this section, whether the severance of the reversionary estate was effected
before or after such commencement.

(3) This section takes effect without prejudice to any liability affecting a
covenantor or his estate.

(4) Nothing in this section shall affect the provisions of the Crown Rights
(Re-entry and Vesting Remedies) Ordinance.
[cf. U.K. 1925 c. 20, s. 1421

Lessor or mortgagee to have benefit of informal insurance

33. The person entitled to the benefit of a covenant on the part of a lessee
or mortgagor to insure against loss or damage by fire shall, on loss or damage





by fire happening, have the same advantage from any then subsisting insurance
relating to the building covenanted to be insured which has been effected by the
lessee or mortgagor in respect of his interest under the lease or in the property or by
any person claiming under him, but not effected in conformity with the covenant, as
he would have from an insurance effected in conformity with the covenant.

Protection of purchaser against forfeiture under covenant for insurance

34. (1) Where, on the bona fide purchase of a leasehold interest under a lease
containing a covenant on the part of the lessee to insure against loss or damage by
fire, the purchaser is furnished with the written receipt of the person entitled to
receive the rent, or his agent, for the last payment of rent accrued due before the
completion of the purchase, and there is subsisting at the time of the completion of
the purchase an insurance in conformity with the covenant, the purchaser or any
person claiming under him shall not be subject to any liability, by way of forfeiture
or damages or otherwise, in respect of any breach of the covenant committed at any
time before the completion of the purchase of which the purchaser had no notice
before the completion of the purchase; but this provision is not to take away any
remedy which the lessor or his personal representatives may have against the lessee
or his personal representatives for breach of covenant.

(2) Nothing in subsection (1) shall affect the provisions of the Crown Rights
(Re-entry and Vesting Remedies) Ordinance (Cap. 126).

PART IV

FORMS, COVENANTS AND
CONDITIONS

Implied covenants

35. (1) There shall be implied-

(a)in any assignment of the whole of the interest in land held under a Crown
lease, the covenant by a person who assigns, and the covenant by a
person to whom an assignment is made, mentioned in Part 1 of the First
Schedule; (Amended, 31 of 1988, s. 12)

(b)in an assignment to a purchaser for valuable consideration, the
covenants, by a person who is expressed to assign as beneficial owner,
mentioned in Part 11 of the First Schedule;

(c)in an assignment by way of voluntary disposition, the covenant, by a
person who is expressed to assign as donor, mentioned in Part III of the
First Schedule;

(d)in any assignment, the covenant, by a person who is expressed to assign
as trustee, confirmor mortgagee, legal chargee personal representative of a
deceased person or under an order of court, mentioned in Part IV of the
First Schedule; and

(e)in a legal charge, the covenants, by a person who is expressed to charge
as beneficial owner, mentioned in Part V of the First Schedule.





(IA) The covenants implied under subsection (1)(a) shall be covenants to
which section 41 applies. (Added, 31 of 1988, s. 12)

(IB) The benefit of the covenants implied under this section shall run with the
land and shall be enforceable by the covenantee and his successors in title and
persons deriving title under or through him or them. (Added, 31 of 1988,s. 12)

(1C) In paragraphs (a) to (d) of subsection (1), 'assignment- does not include a
legal charge. (Added, 31 of 1988, s. 12)

(ID) Unless the contrary intention is expressed, the liability of joint parties to
any assignment or legal charge in respect of the covenants mentioned in subsection
(1) shall be joint and several. (Added, 31 of 1988, s. 12)

(2) The covenants implied under this section may be excluded, varied or
extended in the assignment or legal charge.

(3) This section shall not affect any assignment or legal mortgage executed
before the commencement of this section.

[cf. U.K. 1925 c. 20, s. 76]

Other covenants and conditions

36. The covenants and conditions mentioned in the Second Schedule, or any
of them, may be incorporated into any instrument by reference.

Standard forms

37. A deed, agreement or receipt in the appropriate form given in the Third
Schedule shall, in regard to form and expression, be sufficient.

[cf. U.K. 1925 c. 20, s. 206]

Protection of solicitors etc.

38. (1) The powers given by this Ordinance to any person and the covenants
and conditions implied by, or incorporated by reference under, this Ordinance in
any instrument shall be deemed in law proper to be included in the appropriate
instrument and a solicitor, acting in good faith and with reasonable diligence, shall
not be liable for failing to exclude those powers, covenants or conditions or to insert
others in their place:

Provided that this subsection shall not imply that the inclusion of other
powers, covenants or conditions is improper.

(2) A person acting in a fiduciary position, whether with or without a solicitor,
shall be entitled to the protection afforded to a solicitor by subsection (1).

[cf. U.K. 1925 c. 20, s. 182]

Benefit of covenants relating to land

39. (1) A covenant relating to any land of the covenantee shall be deemed,
unless the contrary intention is expressed, to be made with the covenantee and his
successors in title and persons deriving title under or

through him or them.(Amended, 31 of 1988, s. 13)





(2) This section shall apply to covenants entered into before or after the
commencement of this section.

[cf. U.K. 1925 c. 20, s. 781

Burden of covenants relating to land

40. (1) A covenant relating to any land of a covenantor or capable of being
bound by him, shall be deemed, unless the contrary intention is expressed. to be
made by the covenantor on behalf of himself, his successors in title and persons
deriving title under or through him or them.

(2) This section extends to a covenant to do some act relating to the land,
notwithstanding that the subject matter may not be in existence when the covenant
is made.

(3) This section shall apply to covenants entered into before or after the
commencement of this section.

[cf. U.K. 1925 c. 20, s. 79]

Enforcement of covenants

41. (1) This section applies to an express covenant and a covenant implied by
or under this Ordinance or any other law.

(2) This section applies to any covenant, whether positive or restrictive in
effect

(a) which relates to the land of the covenantor;

(b)the burden of which is expressed or intended to run with the land of the
covenantor; and

(c)which is expressed and intended to benefit the land of the covenantee and
his successors in title or persons deriving title to that land under or
through him or them.

(3) Notwithstanding any rule of law or equity but subject to subsection (5), a
covenant shall run with the land and, in addition to being enforceable between the
parties, shall be enforceable against the occupiers of the land and the covenantor
and his successors in title and persons deriving title under or through him or them
by the covenantee and his successors in title and persons deriving title under or
through him or them.

(4)(a) For the purposes of the enforcement of a covenant, the following
remedies shall be available

(i) proceedings for an injunction (including a mandatory injunction) or
other equitable relief;

(ii) an action for money due under the covenant;

(iii) an action for damages (whether in respect of pecuniary or non-
pecuniary kinds of damage).

(b)For the purposes of ascertaining the existence, nature and effect of a
covenant, a court of competent jurisdiction may make a declaration
relating to those matters.

(5) A positive covenant shall not, by virtue only of this section, be enforceable
against





(a)a lessee from the covenantor or from a successor in title of the
covenantor or from any person deriving title under or through the
covenantor or a successor in title of the covenantor; or

(b) any person deriving title under or through such a lessee; or

(c) any person merely because he is an occupier of land.

(6) A positive covenant is a covenant to expend money, do something or
which is otherwise positive in nature.

(7) A covenant shall be enforceable under this section whether or not the
covenant is between owners of the same land.

(8) A covenant shall not bind a person after he has ceased to have any
estate or interest in the land affected by that covenant except in respect of a
breach of that covenant committed by him before that cessation.

(9) A covenant in an instrument registered in the Land Office under the
Land Registration Ordinance (Cap. 128) against the land affected by the
covenant shall bind the successors in title of the covenantor and the persons
deriving title under or through him or them whether or not they had notice of
the covenant.

(10) This section shall apply to covenants whether entered into before or
after the commencement of the Conveyancing and Property (Amendment)
Ordinance 1988 (31 of 1988).
(Replaced, 31 of 1988, s. 14)

Saving of covenants, terms and conditions

42. (1) Any instrument entered into and taking effect after an agreement
for the Crown lease of the land affected by the instrument but before the issue of
the Crown lease of that land shall have the same force and effect in relation to
that land after the issue of that Crown lease as it had immediately before that
issue. (Amended, 31 of 1988, s. 15)

(2) Where any instrument referred to in subsection (1) is registered under
the Land Registration Ordinance, that registration shall continue in force after
the issue of, and in relation to, the Crown lease of the land affected by the
instrument with effect from the date of registration; and the Land Officer may
make an entry directing attention to the provisions of this section in the Land
Office registers relating to any land affected by that instrument. (Amended,
31 of 1988, s. 15)

(3) Where a Crown lease expires and is either renewed or replaced by a
new Crown lease relating to the same land, any covenant relating to that land
shall, unless the contrary intention is expressed, continue to have effect.

Effect of agreement with 2 or more jointly

43. (1) Any agreement or covenant relating to land or other property,
express or implied, with 2 or more persons jointly to do any act for their benefit
shall be deemed, unless the contrary intention is expressed, to include an
obligation to do that act for the benefit of the survivor or survivors of them and
for the benefit of any other person to whom the right to sue on the agreement
devolves; and shall be construed as being made with each of them.





(2) This section applies only to agreements entered into after 22 June 1979.

[cf. U.K. 1925 c. 20, s. 81]

PART V

MORTGAGES

Mortgage of legal estate

44. (1) After the commencement of this section, a mortgage of a legal estate,
including any second or subsequent mortgage of that legal estate, may be effected
at law only by a charge by deed expressed to be a legal charge.

(2) Under a mortgage effected by a legal charge, the mortgagor and the
mortgagee shall, subject to this Ordinance, have the same protection, powers and
remedies (including but not limited to those relating to foreclosure and the equity of
redemption but excluding the power of the mortgagee to enter into possession
before any default by the mortgagor) as if the mortgage had been effected by way of
assignment of the legal estate before the commencement of this section.

(3) Upon the commencement of this section, a mortgage of a legal estate
effected by way of assignment of the legal estate before the commencement of this
section shall be deemed, for the purposes of this Ordinance, to be reassigned and
discharged and replaced by a legal charge in the same terms and having the same
validity and priority, subject to this Ordinance, as the mortgage which it replaces.

(4) Subsection (3) does not affect-

(a) the mortgagee's right to the possession of any documents; or

(b)any rights or obligations, under any guarantee, suretyship or otherwise,
ancillary to the mortgage replaced under that subsection.

(5) Subject to any agreement between the mortgagor and the mortgagee, where
the mortgaged land is mortgaged by way of legal charge, the mortgagor may execute
a second or subsequent charge against the mortgaged land by a legal charge.

(6) Unless the contrary intention is expressed, the mortgagee under the first
mortgage of a legal estate shall be entitled to possession of the deeds of title
relating to the mortgaged land.

(7) This section does not affect any mortgage, including a mortgage by sub-
demise, effected before the commencement of this section which is not replaced
under subsection (3).

(8) This section does not affect any mortgage, charge or lien arising under any
Ordinance or by operation of law.

(9) This section does not affect the right or interest of any person arising out
of or consequent on the possession by him of any documents relating to a legal
estate in land.





Tacking

45. (1) A mortgagee under prior mortgage may make a further advance or re-
advance to rank in the same priority over a subsequent mortgage as the original
advance under that prior mortgage

(a) if the subsequent mortgagee so consents; or

(b)where the further advance or re-advance does not exceed, with any other
outstanding advance or re-advance, the specified maximum amount
secured under that prior mortgage; or

(c)where that prior mortgage is in favour of an authorized institution (as
defined in the Banking Ordinance (Cap. 155) and is expressed to secure
all money which may, from time to time, be owing to the prior mortgagee,
(Amended, 27 of 1986, s. 137)

and paragraphs (b) and (c) shall have effect whether or not the prior mortgagee had
notice of the subsequent mortgage at the time when the further advance or re-
advance was made by the prior mortgagee.

(2) The priority to which a prior mortgagee is entitled under subsection (1) shall
extend, in addition to the amount secured under the prior mortgage, to interest on
that amount and to all costs, charges and expenses secured under the mortgage.

(3) Subject to subsection (1), the right to tack in relation to land is abrogated:
(Amended, 31 of 1988, s. 16)

Provided that nothing in this section shall affect any priority acquired before
the commencement of this section.

Conversion of equitable mortgage

46. (1) Where an equitable interest becomes a legal estate under section 14, any
equitable mortgage by deed over that equitable interest shall become a legal charge
over that legal estate in the same terms, subject to this Ordinance, as are contained
in that deed.

(2) This section applies to equitable mortgages by deed executed before or
after the commencement of this section.

Inspection of title deeds

47. (1) A mortgagor and a mortgagee not having possession of the deeds of
title relating to the mortgaged land, for so long as they have an interest in that land,
shall be entitled at any reasonable times to inspect and make copies of those deeds
in the possession of a mortgagee.

(2) This section applies to a mortgage made before or after the commencement
of this section and notwithstanding any agreement to the contrary.

Mortgage to 2 or more jointly

48. Where any mortgage effected after the commencement of this section is
expressed to be made to 2 or more persons jointly, the mortgage money shall (if and
so far as the contrary intention is not expressed in the mortgage), as





between them and the mortgagor, be deemed to be owing to these persons on a
joint account and the receipt of the survivors or the last survivor of them or of
the successor or personal representative of the last survivor shall be a complete
discharge.

Action for possession of land by mortgagor
49. (1) A mortgagor under any mortgage (whether effected before or
after the commencement of this section) entitled for the time being to the
possession or receipt of the rents or profits of any land in respect of which no
notice has been given by the mortgagee of his intention to take possession or to
enter into the receipt of the rents and profits of that land may sue for such
possession, or for the recovery of the rents and profits, or to prevent or recover
damages in respect of any trespass or other wrong relating to that land, in his
own name only, unless the cause of action arises upon a lease or other contract
made by him jointly with any other person.
(2) This section does not affect the power of the mortgagor, apart from
this section, in right of the legal estate or otherwise, to take proceedings in his
own name.
[cf. U.K. 1925 c. 20, s. 98(1) 1

Power to appoint a receiver
50. (1) There shall be implied in any legal charge or equitable mortgage
by deed, where the mortgage money has become due, a power exercisable in
writing by the mortgagee and any person entitled to give a receipt for the
mortgage money on its repayment to appoint a receiver or receivers of the
mortgaged land and the income thereof, to remove any receiver appointed and
appoint another in his place.
(2) Any receiver so appointed will be deemed the agent of the mortgagor
and the mortgagor will be solely responsible for the receiver's acts and defaults.
(3) Any receiver so appointed may act in his own name or the name of the
mortgagor.
(4) Where 2 or more receivers are appointed, the appointment shall be
deemed to be a joint and several appointment.
(5) The mortgagee may, from time to time, fix the remuneration of the
receiver and the receiver shall be entitled to retain out of any money received by
him that remuneration and all costs, charges and expenses properly incurred by
him as a receiver.
(6) Without prejudice to the powers mentioned in the Fourth Schedule,
the receiver shall have power to demand and recover all the land of which he is
appointed receiver and the income thereof, by action, distress, or otherwise, in
the name either of the mortgagor or of the mortgagee, to the full extent of the
estate or interest which the mortgagor could dispose of, and to give effectual
receipts accordingly for the same. (Amended, 31 of 1988, s. 17)
(7) A person paying money to the receiver shall not be concerned to
inquire whether any event has happened to authorize the receiver to act.
(8) The provisions of this section are subject to contrary intention
expressed in the mortgage deed and may be varied or extended by the mortgage
deed, and, as so varied or extended, shall have effect as if contained in this
Ordinance.





(9) This section shall not apply to any mortgage executed before the
commencement of this section.

Powers of mortgagee and receiver

51. (1) Unless the contrary intention is expressed, there shall be implied
in any legal charge or equitable mortgage by deed, the powers, exercisable by
the mortgagee, a receiver (acting personally or through their agents) and any
person entitled to give a receipt for the mortgage money on its repayment,
mentioned in the Fourth Schedule.
(2) Any power exercisable under a mortgage shall be subject to any prior
estates, interests and rights to which the mortgaged land is subject.

(3) No power of sale shall empower a mortgagee or a receiver under an
equitable mortgage, by virtue of that mortgage only, to assign the legal estate in
the mortgaged land.

(4) The powers implied by subsection (1), and the provisions of the
Fourth Schedule relating to the exercise of those powers may be varied or
extended by the mortgage deed and, as so varied or extended, shall have effect
as if contained in this Ordinance.

(5) This section shall not apply to any mortgage executed before the
commencement of this section.

Protection of purchaser

52. Where a sale is made under a mortgage, the title of the purchaser shall
not be affected by the fact that no case had arisen to authorize the sale or that
due notice was not given or that the power was otherwise improperly or
irregularly exercised; but any person who suffers loss through an unauthorized,
improper or irregular exercise of the power of sale shall have a remedy in
damages against the person exercising the power.

Sale by mortgagee

53. (1) Where a mortgagee or receiver sells under an express or statutory
power of sale, the assignment shall operate- (Amended, 31 of 1988, s. 18)
(a)to assign to the purchaser the mortgagor's estate in that land, subject
to any other mortgage having priority to the mortgage under which
the sale is made; and

(b)to discharge that land from the mortgage under which the sale is made
and any subsequent mortgage.
(2) Where a mortgagee obtains an order of foreclosure absolute, that
order shall (unless it otherwise provides) operate-

(a)to assign to the mortgagee the mortgagor's estate in the mortgaged
land, subject to any other mortgage having priority to the mortgage
under which the foreclosure order was obtained; and
(b)to discharge that land from the mortgage under which the foreclosure
order was obtained and any subsequent mortgage.
[cf. U.K. 1925 c. 20, s. 891





Application of money received

54. Any money received by a mortgagee or a receiver from the sale or other
dealing with the mortgaged land or any security comprised in the mortgage shall be
applied according to the following priority

(a)in discharge of all rent, taxes, rates and other outgoings due and affecting
the mortgaged land;

(b)unless the mortgaged land is sold subject to a prior incumbrance, in
discharge of that prior incumbrance;

(c)in payment of the receiver's lawful remuneration, costs, charges and
expenses and all lawful costs and expenses properly incurred in the sale or
other dealing;

(d)in payment of mortgage money, interest and costs due under the mortgage,

and any residue shall be paid to the person who, immediately before any sale or
other dealing, was entitled to the mortgaged land or authorized to give a receipt for
the proceeds of the sale of that land.

[cf. U.K. 1925 c. 20, ss. 105 107(2) 1

Mortgagee's receipt

55. (1) A receipt in writing of a mortgagee or a receiver shall be a sufficient
discharge for any money arising under a power of sale or for any money or security
comprised in the mortgage or arising under it; and a person paying that money or
transferring that security shall not be concerned to inquire whether any money
remains due under the mortgage.

(2) A receipt mentioned in subsection (1) need not be under seal.

[cf. U.K. 1925 c. 20, s. 1071

Discharge of mortgage by signed receipt

56. (1) A receipt, written on or annexed to a mortgage deed, for all money
secured by that mortgage, which is executed by the mortgagee or the person in
whom the mortgage is vested and who is legally entitled to give a receipt for the
mortgage money, shall operate, without any surrender or release as a discharge and,
where applicable, reassignment of the mortgaged property from all principal money
and interest secured by, and from all claims under, that mortgage, but without
prejudice to any term or other interest which is paramount to the estate or interest of
the mortgagee or other person in whom the mortgage is vested. (Amended, L.N.
387187 and 31 of1988, s. 19)

(2) Upon performance of the terms of a mortgage, a mortgagor shall be entitled,
at his cost and charge, to a receipt mentioned in subsection (1).

(3) In a receipt mentioned in subsection (1), there shall be implied, unless the
contrary intention is expressed, a covenant by the person who executes the receipt
that such person has not executed or done, or knowingly suffered, or been party or
privy to, any deed or thing, whereby or by means whereof the mortgaged property
or any part thereof is or may be impeached, charged, affected or incumbered in title,
estate or otherwise.





(4) Where the mortgage is contained in more than one deed, a receipt
may, for the purposes of this section, refer to all those deeds and be written on
or annexed to one of those deeds.

(5) A receipt under this section need not be under seal.

(6) This section applies to the discharge of any mortgage by deed, whether
that deed was executed before or after the commencement of this section, but
only to discharges effected after the commencement of this section.
[cf. U.K. 1925 c. 20, s. 115]

Floating charges

56A. (1) A floating charge over property (whether or not it purports to
restrict the chargor's right to alienate the property) shall not affect any estate or
interest in any land, being part of the property, acquired by any other person
before crystallisation of the floating charge, whether or not the other person
had actual or constructive notice of the floating charge or of any such purported
restriction.

(2) This section applies to any floating charge granted on or after
1 November 1984.
(Added, 31 of 1988, s. 20)

57. [Amendment incorporated]

PART VI

RELIEF AGAINST FORFEITURE

Restrictions on and relief against forfeiture of leases
and under-leases

58. (1) A right of re-entry or forfeiture under any proviso or stipulation
in a lease for a breach of any covenant or condition in the lease shall not be
enforceable, by action or otherwise, unless and until the lessor serves on the
lessee a notice-

(a) specifying the particular breach complained of, and

(b)if the breach is capable of remedy, requiring the lessee to remedy the
breach; and

(c)specifying the compensation, if any, which the lessor requires in
respect of the breach,

and the lessee fails, within a reasonable time thereafter, to remedy the breach, if
it is capable of remedy, and to make reasonable compensation in money, to the
satisfaction of the lessor, for the breach.

(2) Where a lessor is proceeding, by action or otherwise, to enforce such a
right of re-entry or forfeiture, the lessee may, in the lessor's action, if any, or in
any action brought by himself, apply to the court for relief; and the court may
grant or refuse relief, as the court, having regard to the proceedings and conduct
of the parties under the foregoing provisions of this section, and to all the other





circumstances, thinks fit; and in case of relief may grant it on such terms, if any, as
to costs, expenses, damages, compensation, penalty, or otherwise, including the
granting of an injunction to restrain any like breach in the future, as the court, in the
circumstances of each case, thinks fit.

(3) A lessor shall be entitled to recover as a debt due to him from a lessee, and
in addition to damages (if any), all reasonable costs and expenses properly incurred
by the lessor in the employment of a solicitor and surveyor or valuer, or otherwise,
in reference to any breach giving rise to a right of re-entry or forfeiture which, at the
request of the lessee, is waived by the lessor, or from which the lessee is relieved,
under the provisions of this section.

(4) Where a lessor is proceeding by action or otherwise to enforce a right of re-
entry or forfeiture under any covenant, proviso, or stipulation in a lease, or for non-
payment of rent, the court may, on application by any person claiming as under-
lessee any estate or interest in the property comprised in the lease or any part
thereof, either in the lessor's action (if any) or in any action brought by such person
for that purpose, make an order vesting, for the whole term of the lease or any less
term, the property comprised in the lease or any part thereof in any person entitled
as under-lessee to any estate or interest in such property upon such conditions as
to execution of any deed or other document, payment of rent, costs, expenses,
damages, compensation, giving security, or otherwise, as the court in the
circumstances of each case may think fit, but in no case shall any such under-lessee
be entitled to require a lease to be granted to him for any longer term than he had
under his original sub-lease.

(5) For the purposes of this section-

(a)'lease' includes an original or derivative under-lease; also an agreement
for a lease where the lessee has become entitled to have his lease granted;

(b)'lessee' includes an original or derivative under-lessee, and the persons
deriving title under a lessee;

(e)'lessor' includes an original or derivative under-lessor, and the persons
deriving title under a lessor;

(d)'under-lease' includes an agreement for an under-lease where the under-
lessee has become entitled to have his under-lease granted;

(e) 'under-lessee' includes any person deriving title under an under-lessee.

(6) This section applies although the proviso or stipulation under which the
right of re-entry or forfeiture accrues is inserted in the lease under any Ordinance.

(7) For the purposes of this section, a lease limited to continue as long only as
the lessee abstains from committing a breach of covenant shall be and take effect as
a lease to continue for any longer term for which it could subsist, but determinable
by a proviso for re-entry on such a breach.

(8) This section does not extend to a covenant or condition against assigning,
underletting, parting with the possession, or disposing of the land leased or any
part thereof where the breach occurred before the commencement of this section.





(9) Except in subsection (4), this section does not apply to a condition for
forfeiture on the bankruptcy of the lessee or on taking in execution of the lessee's
interest. (Amended, 31 of 1988, s. 21)

(10) This section does not, save as mentioned in subsection (4), affect the law
relating to re-entry or forfeiture or relief in case of non-payment of rent.

(11) This section has effect notwithstanding any stipulation to the contrary.

(12) Nothing in this section shall affect the provisions of the Crown Rights (Re-
entry and Vesting Remedies) Ordinance (Cap. 126).

(13) In this section, 'court' includes the Lands Tribunal.

(14) This section shall have effect subject to the Landlord and Tenant
(Consolidation) Ordinance (Cap. 7) and the District Court Ordinance (Cap. 336).

[cf. U.K. 1925 c. 20, s. 1461

PART VII

VOIDABLE
DISPOSITIONS

Purchase not voidable for undervalue

59. (1) No purchase, made bona fide and without fraud, of any interest in
property of any kind within Hong Kong shall be opened or set aside merely on the
ground of undervalue.

(2) For the purpose of this section, 'purchase' shall include every kind of
disposition under or by which any beneficial interest in any kind of property may be
acquired.

[cf. U.K. 31 32 Vict c. 4, s. 1]

Voidability of dispositions to defraud creditors

60. (1) Subject to subsections (2) and (3), every disposition of property made,
whether before or after the commencement of this section, with intent to defraud
creditors, shall be voidable, at the instance of any person thereby prejudiced.

(2) This section does not affect the law of bankruptcy for the time being in
force.

(3) This section does not extend to any estate or interest in property disposed
of for valuable consideration and in good faith or upon good consideration and in
good faith to any person not having, at the time of the disposition, notice of the
intent to defraud creditors. (Amended, 31 of 1988,s.22)

[cf. U.K. 1925 c. 20, s. 1721

Voluntary disposition of land: how far voidable
as against purchasers

61. (1) Every voluntary disposition of land made with intent to defraud a
subsequent purchaser is voidable at the instance of that purchaser.





(2) For the purposes of this section, no voluntary disposition shall be
deemed to have been made with intent to defraud by reason only that a
subsequent disposition for valuable consideration was made.
[cf. U.K. 1925 c. 20, s. 1731

PART VIII

MISCELLANEOUS

Service of notices

62. (1) Any notice relating to land required or authorized by this
Ordinance to be served or given shall be in writing.
(2) Any notice required or authorized by this Ordinance to be served on
a mortgagor or lessee shall be sufficient, although only addressed to the
mortgagor or lessee by that designation, without his name, or generally to the
persons interested, without any name, and notwithstanding that any person to
be affected by the notice is absent, under disability, unborn, or unascertained.
(3) Any notice required or authorized by this Ordinance to be served shall
be sufficiently served if it is left at the last-known place of abode or business in
Hong Kong of the mortgagee, mortgagor, or lessee or other person to be served,
or, in case of a notice required or authorized to be served on a mortgagor or
lessee, is affixed or left for him on the land comprised in the mortgage or
lease. (Amended, 31 of 1988, s. 23)

(4) Any notice required or authorized by this Ordinance to be served shall
also be sufficiently served if it is sent by post. (Amended, 31 of 1988, s. 23)
(5) Unless the contrary intention is expressed, the provisions of this
section shall extend to-
(a) notices required to be served by any instrument affecting land; and

(b) notices to terminate any lease.

(6) This section does not apply to notices served in proceedings in any
court or tribunal.
[cf. U.K. 1925 c. 20, s. 1961

63. [Amendment incorporated]

Amendment of Schedules

64. The Legislative Council may by resolution amend the First, Second,
Third and Fourth Schedules.

FIRST SCHEDULE [s. 351

PART I

IMPLIED COVENANTS IN ANY ASSIGNMENT OF LAND
(Replaced, 31 of 1988, s. 24)

A. BY A PERSON WHO ASSIGNS

That, in the event of the land being partitioned by assignment, the assignor shall from the date of the
assignment or other date therein stated pay the balance of the Crown rent on the due dates and





observe and perform all the covenants (other than the covenant to pay the whole of the Crown
rent) agreements and conditions contained in the Crown lease and any Deed of Mutual Covenant
and on the part of the lessee to be observed and performed so far as the same relate to the
portion of the land remaining vested in the assignor.

(Amended, 31 of 1988, s. 24)

B. BY A PERSON TO WHOM AN ASSIGNMENT IS MADE

That the assignee and any person deriving title under the assignee shall at all times from the date
of the assignment or other date therein stated pay the Crown rent or as the case may be the
apportioned Crown rent and observe and perform all the covenants (other than the covenant to
pay the whole of the Crown rent if the Crown rent has been apportioned) agreements and
conditions contained in the Crown lease and any Deed of Mutual Covenant and on the part of
the lessee to be observed and performed so far as the same relate to the land assigned.

(Amended, 31 of 1988, s. 24)

PART II

COVENANTS FOR TITLE IMPLIED IN AN ASSIGNMENT OF LAND
TO A
PURCHASER FOR VALUABLE CONSIDERATION BY A PERSON
WHO IS
EXPRESSED TO ASSIGN AS BENEFICIAL OWNER ('THE VENDOR')

That the liability of the vendor in respect of a breach of any of the following covenants shall
extend and shall extend only to such a breach arising from anything made, done, executed or
omitted, or knowingly suffered

(a) by the vendor;

(b) by any person through whom the vendor derives title otherwise than by purchase for
value,

(c) by any person assigning by the direction of the vendor;

(d)by any person rightfully claiming through, under or in trust for the vendor or any person
assigning by his direction;

(e)by any person rightfully claiming by, through or under any person (other than in respect of
an estate or interest subject to which the assignment is expressly made) through whom the
vendor derives title otherwise than by purchase for value.

1 That the Crown lease is good, valid and subsisting,

2. That, so far as the same relate to the land assigned-

(a)the premium or other money (if any) and the Crown rent payable under and reserved by
the Crown lease have been paid; and

(b)the covenants, terms and conditions contained in the Crown lease and any Deed of
Mutual Covenant have been observed and performed,

up to the date of the assignment.

(Replaced, 31 of 1988, s. 25)

3.That the vendor now has good right and title to assign the land free from encumbrances save
as specified in the assignment and subject to the manner in which the assignment is expressed
to be made.

4.That the land may be quietly entered into and during the residue of the term of years created
by the Crown lease (and any renewal thereof) held and enjoyed by the person to whom the
assignment is expressed to be made ('the purchaser') and any person deriving title under him






without any lawful interruption or disturbance.

5.That all such lawful acts, assurances and things for further or more perfectly assuring the land
and every part thereof to the purchaser and to those deriving title under the purchaser shall,
from time to time and at all times at the request and cost of the purchaser or any person
deriving title under him, be executed and done (subject to the manner in which the assignment
is expressed to be made) as by the purchaser or any such person may be reasonably required.

PART III

COVENANT FOR TITLE IMPLIED IN AN ASSIGNMENT
BY WAY OF VOLUNTARY DISPOSITION BY A PERSON
WHO
IS EXPRESSED TO ASSIGN AS DONOR

That the donor and any person assigning the land by his direction and any person deriving title
under him by deed or act or operation of law in his lifetime subsequent to that assignment, or by
testamentary disposition or devolution in law, on his death, shall from time to time after the date
of
that assignment, at the request and at the cost of the person to whom the land is expressed to be





assigned or any person deriving title under such person execute and do all such lawful acts,
assurances and things for further or more perfectly assuring the land and every part thereof to
the person to whom the land is expressed to be assigned and to those deriving title under him
(subject to the manner in which the assignment is expressed to be made) as by him or any such
person may be reasonably required.

PARTIV

COVENANT FOR TITLE IMPLIED IN AN ASSIGNMENT BY A PERSON WI-
10
IS EXPRESSED TO ASSIGN AS TRUSTEE, CONFIRMOR MORTGAGEE,
LEGAL
CHARGEE, PERSONAL REPRESENTATIVE OR UNDER AN ORDER OF
COURT

That the person so assigning has not executed or done, or knowingly suffered, or been party or
privy to, any deed or thing, whereby or by means whereof the land or any part thereof, is or
may be impeached, charged, affected or incumbered in title, estate or otherwise or whereby or by
means whereof the person who so conveys is in any way hindered from assigning the land or any
part thereof in the manner in which it is expressed to be assigned.

PART V

COVENANTS FOR TITLE IMPLIED IN A LEGAL CHARGE
BY
A PERSON WI-10 IS EXPRESSED TO CHARGE AS
BENEFICIAL OWNER ('THE BORROWER')

1. That the Crown lease is good, valid and subsisting.

2. That, so far as the same relate to the land mortgaged

(a)the premium or other money (if any) and the Crown rent payable under and reserved
by the Crown lease have been paid; and

(b)the covenants, terms and conditions contained in the Crown lease and any Deed of
Mutual Covenant have been observed and performed,

up to the date of the legal charge and will continue to the paid, observed and performed
during
the subsistence of the legal charge. (Replaced, 31 of1988, s.
26)

3.That the borrower now has good right and title to charge the land free from incumbrances
save as specified in the legal charge and subject to the manner in which the charge is
expressed to be made.

4.That, upon the lender being entitled so to do under the terms of the legal charge, the land
may be quietly entered into and during the residue of the term created by the Crown lease
(and any renewal thereof) held and enjoyed by the lender without any lawful interruption or
disturbance by the borrower, any person charging by his direction or any person rightfully
claiming through, under or in trust for the borrower (other than in respect of an estate or
interest subject to which the legal charge is expressly made).

5.That the borrower and any person charging the land by his direction and any person
deriving title under them and any other person having or rightfully claiming any estate or
interest in the land or any part thereof (other than an estate or interest subject whereto the
legal charge is expressly made) shall from time to time and at all times at the request of the
lender or any person deriving title under him at the cost, until sale of the land in accordance
with the legal charge, of the borrower and, after such sale, at the cost of the person making
the request execute and do all such lawful acts assurances and things for further or more
perfectly assuring the land and every part thereof to the lender and to those deriving title
under him (subject to the manner in which the legal charge is expressed to be made) as by
the lender or any such person may be reasonably required.







SECOND SCHEDULE [s. 361

COVENANTS AND CONDITIONS WHICH MAY BE INCORPORATED BY
REFERENCE

PART A

(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.

2. INSURANCE

(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

(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.

(2)Subject to subclause (1), the property shall be conveyed subject to all easements, rights,
privileges and liabilities adversely or beneficially affecting it.

5. TENANCIES

(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 he prejudiced by the difference.

(5) The Misrepresentation Ordinance (Cap. 284) applies to this agreement.





7. REQUISITIONS

(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 relate exclusively to the property the subject of the agreement
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.

9. GOOD TITLE

The vendor shall give good title to the property. The vendor shall 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 of1988, s. 27)

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 Office,
to register at the Land Office 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.

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)

PART B

(In an Equitable Mortgage of a Residential, Commercial, Industrial
or Other Unit in an Uncompleted Building)

(a) That the Crown lease is good, valid and subsisting.

(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 he 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.

PART C

(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 Crown rent and perform and observe the covenants terms and
conditions by and in the Crown 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 Crown 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.

(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;

(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).

(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.

(e)That if the borrower shall make default in payment of the said premium and other
moneys (if any) or the Crown 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 Crown 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 he a charge upon the property as if the same had formed
part of the loan and bear interest accordingly.

(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.

THIRD SCHEDULE [s. 371

FORM 1

Assignment of a Lot or Section of a Lot or of a Residential, Commercial,
Industrial or Other Unit in a Completed Building

THIS ASSIGNMENT is made the day of 19

BETWEEN

(1)
('the Vendor') and

(2)
('the Purchaser').

In consideration of the sum of paid by the Purchaser to the Vendor (receipt
whereof is acknowledged) the Vendor as ASSIGNS to the Purchaser the land

described in the Schedule hereto ('the Property') TO HOLD the same unto the Purchaser
[as 1 for the residue of the term of years created by the Crown lease referred to in
the
Schedule subject to the payment of the [apportioned] yearly Crown rent reserved by and the
covenants conditions and provisos contained in the Crown lease [and subject to and with the
benefit
of the Deed of Mutual Covenant registered in the Land Office by Memorial No. I.

SCHEDULE

1 The Property-

(a) Description and address:







(b) Lot number, sections, undivided shares etc.:

(c) Exceptions and reservations, etc.:

(d) Easements and other appurtenant rights, if any:





2. The Crown Lease-
(a) Date:
(b) Parties:
(c) Term:
(d) Lot number: (Amended, 31 of 1988, s. 28)
SIGNED SEALED AND DELIVERED etc.

FORM 2

Agreement for Sale of a Residential, Commercial, Industrial
or Other Unit in a Completed Building

THIS AGREEMENT is made the day of 19
BETWEEN
(1)

('the Vendor') and

(2)

('the Purchaser').

1. The Vendor sells and the Purchaser purchases the land described in the Schedule hereto ('the
Property') for the residue of the term of years created by the Crown lease referred to in the
Schedule.

2. The purchase price is the sum of

3. A deposit of shall be paid by the Purchaser to [the Vendor's solicitors,
Messrs as stakeholders on the signing of this Agreement and the balance of the
purchase price shall be paid on completion. The deposit shall be paid to the Vendor on
completion.

4. Completion shall take place at the offices of the Vendor's solicitors at or as they

may direct, on the day of 19

5. [Vacant possession of the Property shall be given to the Purchaser on completion].
6. [Time shall in every respect be of the essence of this Agreement].
7. The Vendor shall assign the Property as
8. The title shall commence with the Crown lease and
9. The Property is sold subject to and with the benefit of
10. There are incorporated into this Agreement as if they were herein written the conditions
respectively on the part of the Vendor and the Purchaser set out in Part A of the Second Schedule
to
the Conveyancing and Property Ordinance.
11. The stamp duly and land registration fees payable on the assignment made pursuant to this
Agreement shall be borne by I.

SCHEDULE

1. The Property-
(a) Description and address:
(b) Lot number, sections, undivided shares etc.:
(c) Exceptions and reservations etc.:
(d) Easements and other appurtenant rights, if any:
2. The Crown Lease-
(a) Date:
(b) Parties:
(c) Term:





(d) Lot number: (Amended, 31 of 1988, s. 28)

SIGNED etc.

RECEIVED the day and year first above written of and from the Purchaser the above mentioned
deposit of 5

[Messrs

as stakenholders

FORM 3

Equitable Mortgage of a Residential, Commercial, Industrial
or Other Unit in an Uncompleted Building

THIS EQUITABLE MORTGAGE is made the day of 19

BETWEE
N

(1)

('the Borrower') and

(2)

('the Lender').

(A) By an Agreement dated the day of 19 made between

('the Vendor') and the Borrower ('the Agreement') the Borrower purchased
the land described in the Schedule hereto ('the Property') for the sum of ('the
Purchase Price') subject to the terms and conditions set out in the Agreement.

(B) Upon the issue of the [Occupation Permit] [Certificate of Compliance] relating to the
Property by the [Building Authority] [Crown] and upon payment of the balance of the Purchase
Price the Borrower will be entitled to an assignment of the Property.

1 In consideration of (the whole or any part whereof and any interest thereon
remaining owing for the time being is hereinafter called 'the Loan') paid by the Lender to the
Borrower (the receipt whereof is acknowledged) the Borrower covenants with the Lender to repay
the Loan on [demand] [a date being one month next after the date hereof] together with interest
thereon from the date hereof day by day at the rate [of... 1 [from time to time notified by the
Lender
to the Borrower].

2.Notwithstanding Clause 1 the Borrower may repay and the Lender shall accept repayment of
the Loan by equal monthly instalments of [or such other sum as may be notified
from time to time by the Lender to the Borrower].

3. In consideration of the Loan and as security for the repayment thereof the Borrower charges
his interest in the Property and assigns his rights in the Agreement to the Lender by way of
equitable mortgage. (Amended, 31 of1988, s. 28)

4. The Borrower irrevocably appoints the Lender and any receiver or receivers appointed by the
Lender by way of security jointly and each of them severally to be the attorney of the Borrower
(with full power of substitution) and in the Borrower's name or otherwise and on his behalf and as
his act and deed

(a) to comply and require compliance in all respects with the Agreement;

(b) to accept the Assignment to the Borrower;

(c)to execute a legal charge of the Property in favour of the Lender such legal charge to be






in such form and to contain such covenants and provisions as the Lender shall require;
and

(d)to sign seal execute deliver perfect and do all other deeds instruments acts and things
which may be required or which the Lender or any such receiver or receivers shall think
fit for carrying out any obligation imposed on the Borrower hereunder or for carrying
into effect any sale lease charge or dealing by the Lender or by any such receiver or
receivers or for giving to the Lender the full benefit of this charge.

5. There are incorporated herein as if they were herein written the covenants on the part of the
Borrower set out in Part B of the Second Schedule to the Conveyancing and Property Ordinance.

SCHEDULE

1 The Property

(a) Description and address:





(b) Lot number, sections, undivided shares etc.:

(c) Exceptions and reservations, etc.:

(d) Easements and other appurtenant rights, if any:

2. The Crown Lease

(a) Date:

(b) Parties:

(c) Term:

(d) Lot number: (Amended, 31 of 1988, s. -28)

SIGNED SEALED AND DELIVERED etc.

FORM 4

Legal Charge

THIS LEGAL CHARGE is made the day of 19

BETWEEN

(1)

('the Borrower') and

(2)

('the Lender'),

1. In consideration of (the whole or any part whereof and any interest thereon

remaining owing for the time being is hereinafter called 'the Loan') paid by the Lender to the
Borrower (the receipt whereof is acknowledged) the Borrower covenants with the Lender to repay
the Loan on [demand] [a date being one month next after the date hereof] together with interest
thereon from the date hereof day by day at the rate [of ... [from time to time notified by the
Lender
to the Borrower].

2.[Notwithstanding Clause 1 the Borrower may repay and the Lender shall accept repayment of
the Loan by equal monthly instalments of or such other sum as may be notified from
time to time by the Lender to the Borrower].

3. In consideration of the Loan and as security for the repayment thereof the Borrower as
beneficial owner charges the land described in the Schedule hereto ('the Property') to the
Lender by way of legal charge subject to the covenants conditions and provisos contained in the
Crown lease [and subject to the Deed of Mutual Covenant registered in the Land Office by
Memorial No. (Amended, 31 of 1988, s. 28)

4. The Borrower hereby irrevocably appoints the Lender and any receiver or receivers appointed
by the Lender by way of security jointly and each of them severally to be the attorney of the
Borrower (with full power of substitution) and in his name or otherwise and on his behalf and as
his act and deed to sign seal execute deliver perfect and do all deeds instruments acts and things
which may be required or which the Lender or any such receiver or receivers shall think fit for
carrying out any obligation imposed on the Borrower hereunder or for carrying into effect any
sale lease charge or dealing by the Lender or by any such receiver or receivers or for giving to
the Lender the full benefit of this charge.

5. There are incorporated herein as if they were herein written the covenants on the part of the
Borrower set out in Part C of the Second Schedule to the Conveyancing and Property Ordinance.







SCHEDULE

1. The Property

(a) Description and address:

(b) Lot number, sections, undivided shares etc.:

(c) Exceptions and reservations, etc.:

(d) Easements and other appurtenant rights, if any:





2. The Crown Lease

(a) Date:

(b) Parties:

(c) Term:

(d) Lot number: (Amended, 31 of 1988, s. 28)

SIGNED SEALED AND DELIVERED etc.

FORM 5

Legal Charge to secure General Banking Facilities

THIS LEGAL CHARGE is made the day of 19

BETWEEN

(1)

('the Borrower') and

(2)

('the Lender').

1. In consideration of the provision of geners banking facilities provided or to be provided by
the Lender to the Borrower ('the Facility') the Borrower covenants to pay on demand to the
Lender

(a)all present and future indebtedness of the Borrower to the Lender according to the Books
of the Lender on any current or other account together with all bank charges thereon;
and

(b)all costs charges and expenses however incurred by the Lender or by any receiver or any
delegate appointed by the Lender in relation to this Legal Charge on a full indemnity
basis; and

(c)all other liabilities of the Borrower to the Lender according to the Books of the Lender
whether present future actual or contingent or as principal or guarantor and whether due
alone or with any other person,

and interest on all of the foregoing in accordance with the provisions of Clause 3 hereof.

2. (a) The Borrower as beneficial owner charges the land described in the Schedule hereto ('the
Property') to the Lender by way of legal charge subject to the covenants conditions and
provisos contained in the Crown lease [and subject to the Deed of Mutual Covenant
registered in the Land Office by Memorial No. 1 as security for the repayment of the
Facility up to the extent of$and all interest thereon and for all costs charges
and expenses due from the Borrower to the Lender. (Amended, 31 of1988, s. 28)

(b)The charge created by this Clause shall be a continuing security and shall not be
considered satisfied or discharged by any intermediate payment or satisfaction of the
whole or any part of the Facility from time to time.

3. Interest shall be calculated and shall be paid in the following manner

(a)at such rate as may be notified from time to time by the Lender to the Borrower from
the lime any part of the Facility shall have been advanced until repayment thereof.,

(b)on the daily balance from time to time outstanding with monthly rests until full
discharge; and







(c)on the last business day of each month or on such date or dates as may be determined at
the sole discretion of the Lender.

4. The Borrower irrevocably appoints the Lender and any receiver or receivers appointed by the
Lender by way of security jointly and each one of them severally to be the attorney of the
Borrower (with full power of substitution) and in his name or otherwise on his behalf and as his
act and deed to sign seal execute deliver perfect and do all deeds and instruments acts and things
which may be required or which the Lender or any such receiver or receivers shall think fit for
carrying out any obligations imposed on the Borrower hereunder or for performing any sale lease
charge or dealing by the Lender or by any such receiver or receivers or for giving to the Lender
the full benefit of this security.





5. This Legal Charge is in addition to and shall not affect or be affected by any other
security
or

guarantee which the Lender may now or at any time hold or take from the Borrower or from
any

other person in respect of the Facility.

6. There are incorporated herein as if they were herein written the covenants on the
part of
the

Borrower set out in Part C of the Second Schedule to the Conveyancing and Property Ordinance.

SCHEDULE

1. The Property-
(a) Description and address:
(b) Lot number, sections, undivided shares etc.:
(c) Exceptions and reservations, etc.:
(d) Easements and other appurtenant rights, if any:

2. The Crown Lease-
(a) Date:
(b) Parties:
(c) Term:
(d) Lot number: (Amended, 31 of 1988, s. 28)

SIGNED SEALED AND DELIVERED etc.

FORM 6

Receipt on discharge of a Charge

The Lender acknowledges receipt of all money secured by the annexed/within written Charge.

Dated. [Signature]
or
[Seal]

FOURTH SCHEDULE [s. 5 11

POWERS OF MORTGAGEE AND
RECEIVER

1 To insure the mortgaged land or any part thereof for any sum not exceeding its full
reinstatement value, and any money paid for such insurance shall be a charge on the
mortgaged land in addition to the mortgage money, with the same priority, with interest at
the same rate as the mortgage money; and the mortgagee shall account to the mortgagor for
all money received by him on an insurance effected on the mortgaged land.

2. To take possession of the mortgaged land and, for that purpose, to take any legal
proceedings.

3. To do all things necessary or desirable to preserve, maintain and manage the
mortgaged land.

4. To lease, surrender and accept the surrender of leases of, the mortgaged land.

5. To exercise any powers or rights incidental to the ownership of the mortgaged land.

6.To settle, adjust, refer to arbitration, compromise and arrange any claim, demand or dispute
relating to the mortgaged land.







7.To bring, prosecute, enforce, defend, compromise and abandon any claim, action, suit or
proceeding in relation to the mortgaged land.

8.To sell and assign the mortgaged land, subject to any prior estates, interests and rights to
which the mortgaged land is subject, but free from the mortgage and all other estates,
interests and rights to which the mortgage has priority, in such manner and subject to such
lawful conditions as the mortgagee or receiver thinks fit; with power to vary or rescind any
contract for sale, buy in at any auction and to resell without being answerable to the
mortgagor for any loss occasioned.





9. To do all things necessary or desirable for realizing the mortgaged land.

10.In the case of any equitable mortgage over the mortgagor's interest in the mortgaged land
and in any agreement of purchase of that land

(a) to comply and require compliance in all respects with that agreement;

(b) to accept the assignment to the mortgagor;

(c)to execute a legal charge over that land in favour of the mortgagee in such form and
containing such covenants and provisions as the mortgagee may require; and

(d)to sign, seal, execute, deliver, perfect and do all other deeds, instruments, acts and
things which may be required or which the mortgagee or receiver shall think fit for
carrying out any obligation imposed on the mortgagor under the mortgage or for
carrying into effect any sale, lease, charge or dealing by the mortgagee or receiver or
for giving to the mortgagee the full benefit of that charge. (Amended, 31 of 1988, s. 29)

11. The powers mentioned in paragraphs 2 to 9 shall not be exercisable unless

(a)notice requiring payment of the mortgage money has been served on the mortgagor, or
on one of the several mortgagors, and default has been made in payment of the
mortgage money or part thereof for one month after such service; or

(b) interest under the mortgage is in arrear and unpaid for one month after becoming due;
or

(c)there has been a breach of a provision, express or under this Ordinance, of the
mortgage other than a covenant for payment of the mortgage money and interest..

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