| Monograph : Encumbrances |
Contents |
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8. |
Others |
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| a. |
Unperformed sale
and purchase agreement
Doubt occurs when a sale and purchase agreement
is shown registered in the land register in respect
of a property, the completion date has long passed,
but no assignment has been registered. In the
absence of a cancellation agreement, one does
not know the cause of non-completion (for example,
is it due to the vendor's default or the purchaser's
default or the parties' agreement?), or
whether there will be any claim for specific performance
or any other claim against the property. In other
words, one does not know the existence or extent
of any interest or claim of the purchaser in the
property under the unperformed agreement.
It is therefore advisable for an owner to seek
a written cancellation agreement of any previous
unperformed sale and purchase agreement before
resale. In the absence of such a cancellation
agreement, the vendor should provide proper and
sufficient evidence that the previous purchaser
has no further interest in or claim to the property
whatsoever. In case of doubt, an estate agent
should advise his clients to obtain legal advice
before entering into any provisional agreement
for sale and purchase.
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| b. |
Lis pendens
This is a notice to anyone that the holder of
the lis pendens is alleging a claim over the property
and that he intends to litigate that claim if
necessary.
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| c. |
Court orders
In matrimonial proceedings, the court, in awarding
ancillary relief, is empowered to order the sale,
transfer or settlement of property which order
may also govern the manner of sale or class of
purchasers. Where property is subject to such
an order, the registered owner is not free to
deal with the property.
In other situations, the court may also grant
an injunctive or prohibitory order limiting the
rights of the owner to dispose of the property.
This would happen in the event of a party in litigation
proceedings successfully convincing the court
that the owner will dissipate the property to
avoid satisfaction of any judgment liability.
Intending vendors and purchasers should consult
their lawyers before they agree to sell and purchase
property subject to any such order.
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| d. |
Breach of terms
of deed of mutual covenant
The co-owners of a building are entitled to restrain
certain transactions by obtaining an injunction
if the transaction would constitute a breach of
the terms of the deed of mutual covenant.
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In Lo Chi Wai Arthur v Liu Wing Cheung Wilfred
[1983] HCA 11459/82, the deed of mutual covenant provides
that the car parking space cannot be alienated separately
from the flat, and the sale of a car parking space on
its own was held to be a breach of the terms of the deed
of mutual covenant, thereby rendering the title defective.
Another common restriction under the deed of mutual covenant
is that a car parking space must not be sold to a person
who is not the owner of a unit in the building.
In the sale and purchase of a car parking space separately
from a flat in the building, steps should be taken to
ensure that there is no restriction against such alienation
in the deed of mutual covenant or government grant.
In addition, the terms of a deed of mutual covenant
may specify the uses of different parts of a building.
A breach of the permitted user may lead to a claim by
the building manager, the other owners or owners incorporation.
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