Table of Contents
Chapter 1: Building Deeds: The Invisible Guardian of Property Value
Title Deeds are the lifeblood of Hong Kong’s property market, like a “passcode” that records the fate of property rights. Under the Land Registration Ordinance (Cap. 128), it is not only the legal foundation of title but also a passport for property transactions. The core functions of a building deed are three:
- Ironclad evidence of property rights：covers sales contracts, assignments, mortgage deeds and other documents to ensure that ownership is clear.
- Trading Rings：Record the complete track of all transfers, additional mortgages and releases of mortgages.
- Court Shield: In ownership disputes, it is the key evidence for winning the case.
"The property deed is the lifeline of the property rights chain. If one link is broken, it may collapse." Data from the Lands Tribunal in recent years revealed that 68%'s property rights disputes arose from defects in the property deed. Can the property deed in your hand really protect your wealth?
Chapter 2 The truth about the market for untitled properties: the bitter lessons behind the discounts
The market reality of untitled properties is shocking. Data from 2023 shows that the transaction price of such properties is at an average discount of 25-40%, even dragging down the value of high-quality housing estates. The following cases are thought-provoking:
- Taikoo Shing Lotus Mansion Tragedy: The low-rise three-bedroom unit was sold for HK$10.8 million (HK$11,714 per square foot) in April 2023 due to the disappearance of the owner and the loss of the property deed. This was HK$351,000 lower than the bank's valuation of HK$16.6 million, setting a record for the largest discount in five years.
- The Tragedy of Sham Shui Po's Tenement Buildings: In 2022, a unit was sold at an estimated price of 45% due to the lack of a 1968 transfer deed, and the buyer entered the market with full payment.
- Yuen Long Village House Disturbance: The owner lost the strata deed, the transaction fell through, and he lost $800,000 in deposit and legal fees.
What is even more shocking is that according to statistics from the Rating and Valuation Department, the number of transactions of untitled properties surged by 142% from 2020 to 2023. In the era of high housing prices, are properties without deeds an opportunity or a trap?
Chapter 3 A complete analysis of the four major risks of undeeded buildings
Risk 1: Obstacles on the road to mortgage
The biggest headache for buyers of properties without deeds is financing difficulties. When banks approve mortgages, they require inspection of the original property deeds, and giants such as HSBC and Bank of China are very ruthless. If the documents are missing, Title Insurance can be used to remedy the situation, but the premium can be as high as 0.5-1% of the property price. What's even more cruel is that most of the untitled properties can only be turned to finance companies, and the loan conditions are as follows:
| Institution Type | Highest score | Annual interest rate range | Handling Fees |
|---|---|---|---|
| bank | Rejection | – | – |
| Licensed Financial | 50% | 8-12% | 2-3% |
| Private lending | 30% | 18-36% | 5%+ |
| Are you willing to pay double interest for one unit? |
Risk 2: The bottomless pit of resale
The market liquidity of untitled properties is a nightmare. It takes an average of 42 days for a normal property to be sold, but 189 days for a property without a deed. If the buyer finds that the property deed is incomplete after signing the contract, he or she can terminate the contract and claim compensation in accordance with the Misrepresentation Ordinance, with a success rate of up to 73%. If the real estate agent fails to disclose the truth, his or her licence may be revoked. Would you dare to take a gamble on a property like this?
Risk 3: Value Discount Black Hole
- Discount margin formula:
Actual transaction price = market valuation × (1 – risk factor)
Risk factor = (number of missing files/total number of files) × market correction parameter
- Professional Valuation Differences:
- Surveyors' valuations are usually more conservative than banks' valuations15-20%
- Pay special attention to the "time value depreciation": every year of delay in resale, the value will depreciate by 5-8%
Risk 4: Chain bomb of property rights crisis
There are many risks associated with untitled properties:
- Will not be processed: Subject to the Intestates' Estates Ordinance.
- Adverse possession: It is necessary to comply with the 12 years of continuous occupation stipulated in the Limitation Ordinance.
- Company Liquidation: The asset recovery period can be up to 60 years.
- Legal retrospective period:
- General limitation period for title claims: 12 years
- Limitation period for claiming government land: 60 years
If there is no record at the Land Registry, there is no hope of renewing the deed, and potential lawsuits are an invisible bomb. How big a trap is hidden behind the cheapness?
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