To fully utilise every inch of space in a property, some people may carry out alteration and addition (“A&A”) works to their properties. However, purchasing or renting properties with A&A works may have potential risks or legal liabilities. It may also affect the property’s valuation or a purchaser’s application for mortgage loans.
One of the common A&A works in Hong Kong is to convert a standard kitchen to an open one. Such a conversion may involve the removal of the fire rated door, resulting in the direct exposure of the property to fire hazard. Hence, property owners are strongly recommended to seek advice from a building professional before carrying out such works. Another common A&A works in Hong Kong is cockloft construction. In general, if the works are carried out without the prior approval and consent of the Building Authority such works may be considered as unauthorised building works (“UBW”).
I would like to remind potential property purchasers and tenants that properties with UBW may be subject to enforcement action under the Buildings Ordinance. It may also affect the results of bank valuations or mortgage loan applications, and at the same time occupants may face safety risks. Therefore, consumers should check with their appointed estate agents to find out whether the property concerned has any UBW before making any decision to purchase or rent.
According to the Estate Agents Practice (General Duties and Hong Kong Residential Properties) Regulations, estate agents shall, immediately before an agreement for sale and purchase or a lease of a residential property is entered into, carry out a land search in the Land Registry in respect of the property they are handling and provide a copy of the land search to the purchaser/tenant of the property. The EAA has also issued guidelines for estate agents to follow in respect of properties with UBW. Estate agents are required to carry out a land search of the property and carefully check the land search records to see if any order issued by the Building Authority requiring demolition/alteration of UBW has been registered and, if so, whether the order has been complied with.
In addition, in every case where the land search record reveals that there is such an order and that the order has not been complied with, estate agents should inform their clients accordingly. Estate agents should advise their clients of the risks involved in the purchase or renting of properties with UBW and the need to seek legal advice. Estate agents should advise the owners of properties which have building orders for the demolition/alteration of unauthorised building works to comply with the orders, explain to them the consequences of non-compliance, and point out that it is the owners’ general duty to keep the structure of the properties in good repair and condition. If a buyer is willing to buy a property with UBW, the estate agent should clearly state the related responsibilities of both parties in the sale and purchase agreement, including which party shall be responsible for the cost of demolition and reinstatement, as well as other legal liabilities.
To help consumers better understand the risks of purchasing and renting properties with A&A works or UBW, the EAA will organise a free public seminar (in Cantonese) titled “Be alert when renting or purchasing properties with alteration works” on 28 September 2019. Different professionals with surveying, legal and banking backgrounds will share with the audience the important points-to-note when purchasing or renting properties with A&A works. Members of public who are interested can register at https://eaa.ievent.hk
Furthermore, to learn more about the issue of UBW, consumers can also visit the “Smart Advice” section of this website: http://smart.eaa.org.hk/smart-advice/unauthorised-building-works/
Chief Executive Officer
Estate Agents Authority