 Mr Yip had been living in a leased flat and always wanted to have his own flat. Seeing that property prices had come down considerably in recent months, he planned to draw on his savings to purchase a flat. As funds were limited, he would not mind an older property.
Through the introduction of an estate agent, he inspected a residential flat in To Kwa Wan. Although the building was not new, the interior of the flat was reasonably neat and clean. After discussion, Mr Yip and the vendor reached an agreement and immediately signed a provisional agreement for sale and purchase. After leaving the flat, Mr Yip asked the agent to show him the rest of the building, including common areas such as the fire escapes, corridors and lifts. He saw a number of notices on the walls of the corridors and near the lifts saying that the owner of each flat had to pay for the maintenance of the building and improvement of the various facilities in it. It was estimated that each household would have to pay more than $50,000 and the matter had been approved by the owners' corporation.
Mr Yip turned back and asked the vendor about the cost of maintenance. The vendor said that he had just learned about it himself and was willing to bear the cost. The agent then proposed that a clause be added to the agreement stating that the vendor shall be responsible for such cost and agreed to stakehold $70,000 out of the purchase price with his solicitors for payment of the cost until the maintenance works were completed.
In the above transaction, Mr Yip had been very fortunate as he learned about the maintenance cost in time and the vendor was willing to bear it. Otherwise, it would probably end up in dispute and affect the transaction. Most people, when inspecting flats, only concentrate on the interior, and neglect the common areas of the development or the building. Generally speaking, most provisional agreements for sale and purchase do not contain a clause that provides for the maintenance costs. If such costs are discovered only after a provisional agreement for sale and purchase is signed, then the ensuring dispute may not have been resolved as smoothly as in the above case. As a purchaser, one should examine carefully the common areas of the property so that one may get to know what facilities there are in the development or building. One can also check whether there are illegal structures on the outside walls of the building, or whether the power system is properly installed. If the purchaser pays more attention to the notices on the bulletin board of the management office, he may be rewarded with discoveries.
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