Beware of the pitfalls of buying properties with unauthorised building work or illegal alterations

Unauthorised building work may render the property title defective, while potentially saddling buyers with repair or remedial costs

Estate agents should remind both parties to seek legal advice before arranging for them to enter into a transaction

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People looking at the layout plan for a residential project in Kai Tak, Hong Kong. Photo: David Wong

Ruby Hon Yuen-ping

Ruby Hon Yuen-ping is chief executive officer of Estate Agents Authority

Published: 12:00pm, 6 Jul 2021Updated: 7:25pm, 6 Jul 2021

There was a recent media report about a purchaser’s mortgage application being rejected by local banks as the property had unauthorised building work. While some properties might look attractive due to a redesign or modification of their original layout plan, purchasers should be wary of the risks if they involve illegal alterations. They could be in breach of the city’s Buildings Ordinance.

To protect their clients’ interests, estate agents have a duty to check whether there is any undischarged building order registered against the property. Upon learning about such illegal work or building order, estate agents should inform their clients of the government’s right of re-entry to the property.

This may render the title of the property defective, while their clients may still need to bear the cost of removing the infringing conditions, or any repair work required by the building order.

Thus, estate agents should remind both parties to seek legal advice before arranging for them to enter into a provisional agreement for sale and purchase.

A real estate agent shows a prospective buyer the layout of a luxury flat project. Photo: AFP

I would like to share a case to remind property purchasers to seek professional and legal advice on the issue of unauthorised building work or building order before they commit to any provisional agreement.