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Property policies

Veteran lawyer urges Hong Kong government not to rush through land title registration law

Lilian Chiang of Deacons says government should ensure that the interests of property owners are protected and some of the rules must be improved

PUBLISHED : Wednesday, 06 December, 2017, 9:02am
UPDATED : Wednesday, 06 December, 2017, 9:02am

Hong Kong’s new land law, which aims to offer greater certainty of property title and simplify conveyancing procedures, could have lasting consequences, so the government should not rush to implement the legislation that the city might come to regret, according to a legal expert.

Lilian Chiang Sui-fook, senior partner and head of the property department at the law firm Deacons, supports the proposed legislation as the land registration title law simplifies flat buying procedures, benefiting both property owners and legal professionals.

“However, there are a number of contentious issues such as the provisions of the rectification and indemnity schemes that have not yet been resolved,” she said. “The government should ensure that property owners are well protected before implementing the law.”

The Land Title Ordinance, enacted in 2004, aimed to simplify the land and property registration system. But the ordinance has not been enforced for 13 years as the government and the stakeholders have not yet reached a consensus on a number of issues.

Chiang said the existing rules were too complicated and need to be improved.

Under the existing registration system, deeds and other documents relating to property transactions are submitted to the Land Registry for registration. But the Land Registry does not legally prove that a person is the true owner of a property.

The title can be established only if it can be proved that the deeds registered are free of defects and that the property concerned is not subject to any claims. As such, property or land buyers have to hire a lawyer to review each and every title document transacted in the past 15 years before proceeding with the purchase.

Taking into account the rise in home prices in the city, a cap of HK$30 million is not enough to compensate the loss of a luxury property
Lilian Chiang Sui-fook, senior partner at Deacons

“Reviewing all documents is time consuming and the legal cost for flat buyers can be very high,” said Chiang, admitting that the new law can improve the current complicated procedures.

But there were a lot of problems yet to be resolved under the new land law.

For example, even though there is an indemnity scheme proposed for those who suffer a loss because of an inaccuracy in the title register, the cap is set at HK$30 million for each case.

“Taking into account the rise in home prices in the city, a cap of HK$30 million is not enough to compensate the loss of a luxury property,” said Chiang.

Other controversial issues that have failed to reach a consensus between the government and stakeholders include the rectification arrangement and how to convert land and property that involves over three million land registers under the deeds registration system dating back to over a hundred years.

On November 23, the Audit Commission urged the Development Bureau and the Land Registry to set a targeted implementation date and devise an action plan with a timetable for implementing the land title registration system as soon as practicable.

Chiang, who joined Deacons in the late 1970s, has vast experience in all kinds of property related transactions, including sale and purchase of commercial, residential and industrial properties, and tender and auction transactions. She also provides all types of property related advice.

Chiang said there were a number of property issues in Hong Kong that can be improved, citing the Residential Properties (First-hand Sales) Ordinance as an example that needs to be reviewed as it was not effective enough.

The ordinance, which came into effect in April 2013, aimed to enhance the transparency, fairness and consumer protection of the sales arrangement and transactions of first-hand residential properties.

Chiang said the content of the sales brochure was too comprehensive, exceeding what an ordinary buyer needs to know.

“There are not too many buyers who will read through a brochure that contains hundreds of pages,” said Chiang. “There are some technical issues of the law that need to be improved”.

To ensure transparency and fairness, the law requires a developer to make hard copies of the sales brochure available to the public for free and on its website designated for the development at least seven days before the sale of the properties and on the date of sale.

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