XN000022-1996-02-14 — Page 31

- 29.

Court's interpretation of "owner" under HOS property

Following is a question by the Hon Bruce Liu Sing-lee and a written reply by the Secretary for Housing, Mr Dominic Wong, in the Legislative Council today (Wednesday):

Question:

In the judgment in M.P. 3630 of 1994 (Chan Chi Hung and Law Lai Wan vs Tse Ying Piu and Wong Yin Lai Flavia) (the "said judgment") delivered in September 1995, the judge interpreted paragraph (a) of the Schedule to the Housing Ordinance, Cap 283 to mean that an owner of a Home Ownership Scheme Property ("HOS Property") shall have "first paid to the Authority the amount of the premium" before completing the sale of the property to a new purchaser. That is to say, such owner cannot use the proceeds of sale to pay the premium to the Authority. In this connection, will the Government inform this Council:

(a) whether the administration accepts the reality which is that an owner of HOS property would sell his property and concurrently on completion of his sale pay the premium to the Authority from the proceeds of such sale; and

(b) if so, in order to remove any doubt cast by the said judgment, whether the Administration intends to amend the Schedule to the Housing Ordinance?

Answer:

Mr President,

When a Home Ownership Scheme (HOS) flat is sold, it is common practice for the purchaser's solicitor to send the assignment document and the sale proceeds to the vendor's solicitor, subject to an undertaking that the vendor will pay the premium to the Housing Authority before the completion of the sale. The assignment takes effect only after payment of the premium. In this way, the vendor can cover the required premium payment from the sale proceeds. The use of this form of transaction is subject to mutual agreement between the vendor and the purchaser.

The requirement for payment of premium under the Schedule is clear, and solicitors have generally not encountered difficulties in handling the sale of HOS flats either before or after the court case mentioned.

End