| The Freshman |
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| Vacant possession is essential, purchaser's rights are paramount |
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Mr Lin and his family were recently granted a loan under the Home Purchase Loan Scheme and decided to buy a residential unit. An estate agent took them to view a number of flats in Kowloon Bay but they were not quite satisfied with what they saw. After looking around for a long time, they found one which was well-situated, easily accessible and reasonably priced. Mr Lin liked it very much. During the inspection, a tenant was seen living in the flat. The owner said that the tenant had requested to terminate the lease early and promised to move out of the flat within a short time. Therefore, the owner said, he was in a position to sign an agreement for sale and purchase with Mr Lin.
The Home Purchase Loan Scheme gives financial aid to applicants purchasing uncompleted or newly-completed private residential units or vacant private residential units not exceeding a stipulated age. The unit purchased is solely for the applicant's own use and cannot be rented out. Mr Lin worried that the tenant might go back on his word and refuse to move out. He would then be unable to live in it and also contravene the Home Ownership Loan Scheme. Mr Lin made his misgivings known to the owner and the estate agent and hoped that the owner would take the flat back as soon as possible before going on with the negotiations. The owner showed understanding for Mr Lin's anxiety and promised to reach an agreement with the tenant to vacate the flat.
A week later, the owner called Mr Lin to say the tenant had moved out of the flat. Mr Lin inspected the flat again and saw that it had indeed been vacated. Only then did he feel secure to enter into an agreement for sale and purchase with the owner.
In the above property transaction, some people may think that Mr Lin made a fuss for nothing and wasted some time. However, one should remember that in buying a flat, the deposit alone involves a sizable amount of money, and the tenancy law of Hong Kong tends to protect the tenant's rights. Once the deposit or even the full price of the flat is paid but vacant possession is not obtained or only obtained after a drawn-out lawsuit, the purchaser's sense of loss and desperation can only be imagined. Thus, for the purchaser, the vendor's ability to deliver up vacant possession is an essential matter.
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