Copy of Legal Opinion on Material Information

To enable purchasers to have a sufficient understanding of the background of the vendor and the UPOH, licensed property agents must obtain a legal opinion (“legal opinion”) on material information issued by a lawyer practising in the jurisdiction where the UPOH is situated, before they participate in the sale or the promotional activities for such properties.

Estate agency companies must ensure that the legal opinion on material information with regard to the vendor and the UPOH must cover:

(a)Due diligence on the vendor and the UPOH, confirming:

(i)that the vendor is:

(aa) in existence; (bb) legally entitled to develop the UPOH; and (cc) legally entitled to sell the UPOH;

(ii)the vendor’s source of funds or financial arrangement with regard to the completion of the UPOH;

(iii)the relationship between the vendor and the developer, if they are not the same person/entity (such as, whether the developer is a member of the same group of companies of which the vendor is also a member; whether both the vendor and developer are beneficially owned by the same third party; and/or the percentage shareholding one holds in the other, etc.); and

(iv)the following key information of the development of which the UPOH forms part:

(aa) address (e.g. name of street and number (known or tentative));

(bb) location (including for example, city, district and town, etc.);

(cc) freehold or leasehold (if leasehold, term of the  lease enjoyable by the UPOH);

(dd) development permit or approval number(s) and the issuing authority;

(ee) current ownership;

(ff) subsisting encumbrances (e.g. undischarged mortgages, litigation and/or outstanding claims);

(gg) the permitted user (e.g. for residential, commercial, or industrial purpose) and user restriction (if any) of the UPOH; and

(hh) whether the purchaser is acquiring an interest in the land; an interest in the building to be erected thereon; and/or a right to use and occupy the properties in the building;

(b) whether there is any form of restriction(s) for foreign purchasers to
(i) purchase;
(ii) resell;
(iii) lease; and
(iv) mortgage the UPOH according to the laws of the place where the UPOH is situated; and if so, the nature of such restriction(s); and

(c) whether there is any mechanism in place to safeguard the deposits or part payments made by the purchaser according to (i) the laws of the place where the UPOH is situated; and (ii) the terms of the relevant sale and purchase agreement (if any) which shall not be in conflict with the laws of the place where the UPOH is situated; and if so, the particulars of such mechanism and how the deposits or part payments will be dealt with pending completion of the purchase.

Apart from covering the information in paragraphs (a) to (c) above, the legal opinion must also state or contain the following information:

(a) the name of the issuing lawyer;
(b) the date of the legal opinion;
(c) the date up to which the information contained in the legal opinion is valid;
(d) the contact information of the issuing lawyer (i.e. correspondence address, contact number and email address); and
(e) a copy of a valid practising certificate of the issuing lawyer issued by a relevant recognised authority (e.g. government department or professional body) confirming that the issuing lawyer is authorised to practice law in the jurisdiction where the UPOH is situated.

The legal opinion and the valid practising certificate of the issuing lawyer must be issued in either Chinese or English. If the legal opinion and/or the valid practising certificate are issued in other languages, it must be accompanied by a certified translation of the same in either Chinese or English.

The licensed property agent concerned is required to forthwith produce a copy of the aforesaid legal opinion and the valid practising certificate of the issuing lawyer as well as their certified translation (if applicable) upon request by the EAA.