Sale and Purchase of Property
(Real Estate)
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III. Provisional Sale and Purchase Agreement

Under section 3 of the Conveyancing and Property Ordinance (Cap. 219 of the Laws of Hong Kong), no legal action concerning any contract for sale of land (including house/flat/building) will be enforced by the courts unless the contract is made in writing. In other words, you will lose the protection from the courts if you sell or buy a flat through an oral agreement.

Despite bearing the word "provisional", a duly signed provisional sale and purchase agreement is a legally binding contract that must be fully obeyed by the parties involved. If the formal sale and purchase agreement (which is intended to replace the provisional agreement) cannot be signed, the parties can rely on the provisional agreement to proceed with the deal or to sue for compensation.

  1. I want to purchase a flat. What should I do before I sign the provisional sale and purchase agreement and pay the initial deposit?
  2. When the property is sold with an existing tenancy, what should the purchaser and the vendor be aware of?
  3. What are the usual terms that would be contained in the provisional sale and purchase agreement?
  4. Should the provisional sale and purchase agreement be stamped and registered?
  5. What should a purchaser be aware of if there is an existing mortgage on the flat before he/she signs the provisional sale and purchase agreement?
  6. If a purchaser intends to buy a flat over which there is a negative equity (the purchase price to be paid cannot fully offset the outstanding mortgage loan), how can the purchaser deal with the risk?
  7. What should a purchaser do if a mortgage is needed?
  8. Can a purchaser re-sell the property after signing the provisional sale and purchase agreement?
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