Vendor Disclosure Statement (Hong Kong)

A Vendor Disclosure Statement in Hong Kong records the information the relevant body requires to process the matter.

Hong Kong property law applies the caveat emptor (buyer beware) principle as a starting point, but this is substantially modified by the common law duty not to misrepresent and not to actively conceal latent defects known to the vendor. Active concealment of known defects may give rise to claims for misrepresentation or deceit against the vendor, and may entitle the buyer to rescind the PSPA or claim damages. The Conveyancing and Property Ordinance (Cap. 219) governs the formal requirements for sale and purchase transactions.

The Land Registry, maintained under the Land Registration Ordinance (Cap. 128), is the primary source of title information in Hong Kong. A buyer's solicitors will conduct a thorough land search to identify all registered instruments — mortgages, charges, caveats, government orders, and restrictions on the title. However, not all defects appear on the Land Registry search. Unauthorised building works, outstanding repair orders, and certain government notices may only be identified through searches with the Buildings Department, the Food and Environmental Hygiene Department, and the Lands Department.

Unauthorised building works (UBW) are structures built without required approval under the Buildings Ordinance (Cap. 123). Common examples in Hong Kong include illegal rooftop structures, enclosed balconies, internal structural modifications, and added toilet facilities. The Buildings Department actively enforces removal of UBW through repair and demolition orders. A buyer who purchases a property with outstanding UBW may become liable for compliance with any outstanding order after completion.

Stamp duty under the Stamp Duty Ordinance (Cap. 117) applies to the PSPA and the formal Assignment at rates up to 15% of the purchase price or market value. Disclosure of defects does not affect the stamp duty calculation but may affect the negotiated purchase price. Forms-legal.com provides a Vendor Disclosure Statement template suited to Hong Kong residential and commercial property transactions.

The Misrepresentation Ordinance (Cap. 284) provides remedies for buyers who enter into property transactions in reliance on false or misleading statements by the vendor. Where a vendor makes a misrepresentation — even innocently — that induces the buyer to sign the PSPA, the buyer may be entitled to rescind the agreement or claim damages under Cap. 284. A thorough vendor disclosure statement, honestly completed, significantly reduces the vendor's exposure to misrepresentation claims by providing the buyer with a written record of all material facts disclosed before the PSPA was signed.

The Estate Agents Ordinance (Cap. 511), administered by the Estate Agents Authority (EAA), imposes obligations on licensed estate agents advising vendors on disclosure. Agents must not make or permit misrepresentations about the property, must advise their vendor clients on disclosure obligations, and must maintain written records of all material information communicated to buyers. The EAA's Code of Ethics requires agents to act in good faith and to refrain from concealing material facts.

A Vendor Disclosure Statement is needed in Hong Kong property sales to reduce the vendor's legal exposure and to provide the buyer with a structured record of material facts about the property before the PSPA is signed.

Residential property vendors selling flats, houses, or apartments in Hong Kong's private market are expected to disclose known material defects — structural issues, water seepage, pest infestations, and outstanding government orders — to the buyer. Estate agents regulated by the Estate Agents Authority (EAA) under the Estate Agents Ordinance (Cap. 511) are required to advise their clients on disclosure obligations and to refrain from making misrepresentations about the property.

Commercial property vendors selling office units, retail shops, industrial premises, or hotels in Hong Kong need a disclosure statement covering tenancy arrangements (existing leases and licence agreements, rent rolls, lease expiry dates), outstanding government orders, UBW, planning restrictions, and any pending litigation affecting the property.

Vendors of New Territories village houses — ding houses built under the Small House Policy — need a disclosure statement that addresses the alienation restriction condition in the government lease, the status of the Certificate of Compliance, any outstanding Lands Department correspondence, and UBW. Village house buyers face additional complexity compared to urban property buyers due to the unique New Territories land tenure system under the New Territories Ordinance (Cap. 97).

Property sellers going through divorce proceedings, estate administration (under the Intestates' Estates Ordinance, Cap. 73), or corporate restructuring need a disclosure statement to confirm the current ownership status, any pending litigation or court orders affecting the property, and whether all co-owners have consented to the sale.

The disclosure statement is used alongside the Vendor's Solicitors' Requisitions on Title response, the Land Registry title search, and the Buildings Department records search as part of the thorough due diligence package that a buyer's solicitors assemble before advising the buyer to sign the PSPA.

Estate administration sales — where a property is sold by executors or administrators of a deceased owner's estate under the Probate and Administration Ordinance (Cap. 10) — benefit from a disclosure statement that acknowledges the vendor's limited first-hand knowledge of the property and relies on records available to the estate. Buyers purchasing from an estate understand the limitations of disclosure by a party that did not occupy the property.

Sales of tenanted properties — where the property is occupied by a tenant under a subsisting tenancy agreement — require a disclosure that includes the tenant's full name, the monthly rent, the tenancy term, whether the tenancy has been stamped under the Stamp Duty Ordinance (Cap. 117), and whether the tenant has any right of first refusal. A buyer who discovers an undisclosed tenancy after signing the PSPA may have grounds to rescind the agreement.

A complete Hong Kong Vendor Disclosure Statement must address all categories of material facts that a buyer would reasonably need to know before committing to purchase the property and that may not be fully apparent from a Land Registry title search alone.

Vendor and Property Identification: Full legal name(s) of the vendor(s) as they appear on their Hong Kong Identity Card or company registration certificate, the property address, the Land Registry Lot number, the building name and management company details, and the vendor's confirmation of their legal title to sell the property. Where the vendor is a company, its registration number under the Companies Ordinance (Cap. 622) should be stated.

Title Encumbrances: A declaration of all mortgages, charges, caveats, and other encumbrances registered against the property at the Land Registry under the Land Registration Ordinance (Cap. 128). Section 3 of Cap. 128 establishes the priority rules for registered instruments — a registered mortgage takes priority over subsequent unregistered dealings. The vendor must confirm that all mortgages will be discharged on or before completion, or that the transaction is subject to the buyer taking over an existing mortgage with the lender's consent, as approved by the Hong Kong Monetary Authority (HKMA) under its mortgage lending guidelines.

Buildings Department Orders: Disclosure of any outstanding repair orders, demolition orders, or enforcement notices issued by the Buildings Department under Section 24 of the Buildings Ordinance (Cap. 123). Section 24 empowers the Buildings Department to issue orders requiring owners to carry out repairs or remove unauthorised structures. Outstanding orders run with the land and may become the buyer's liability after completion. Buyers should independently search the Buildings Department records as part of their due diligence alongside reviewing the vendor's disclosure.

Unauthorised Building Works: A description of any known UBW affecting the property, including rooftop structures, enclosed balconies, internal structural modifications, or added facilities. Section 14 of Cap. 123 requires prior Buildings Department approval for prescribed building works — any works carried out without such approval constitute UBW. The vendor must disclose whether any removal orders or regularisation notices under Cap. 123 have been received from the Buildings Department.

Government Rent and Rates: Confirmation that government rent under the Government Lease and government rates under Section 4 of the Rating Ordinance (Cap. 116) are current and that there are no outstanding arrears. The Rating and Valuation Department administers rates assessments; the Lands Department administers government rent. Both the Lands Department and the Rating and Valuation Department records should be checked to verify arrears status.

Management Fees and Building Management: Confirmation that all management fees under the Deed of Mutual Covenant (DMC) and the Building Management Ordinance (Cap. 344) are current, and disclosure of any ongoing disputes with the owners corporation or management company. Section 20 of Cap. 344 governs the powers of the Incorporated Owners in enforcing DMC obligations and collecting outstanding management fees.

Tenancy and Occupancy: Disclosure of any existing tenancies — the tenant's full name, the monthly rent in HKD, the tenancy expiry date, and whether the tenancy has been duly stamped under the Stamp Duty Ordinance (Cap. 117). Section 13 of Cap. 117 imposes stamp duty on tenancy agreements at a percentage of the annual rent. The vendor must confirm whether the property will be sold with vacant possession or subject to existing tenancies, as an undisclosed tenancy may entitle the buyer to rescind the Provisional Sale and Purchase Agreement.

Structural and Environmental Issues: Disclosure of any known structural defects, water seepage, pest infestations, fire damage, or contamination issues affecting the property. Water seepage between floors is among the most common property disputes in Hong Kong; the Joint Office of the Food and Environmental Hygiene Department (FEHD) and Buildings Department handles inter-floor seepage complaints.

Vendor's Declaration: The vendor's signed declaration confirming that all information in the disclosure statement is accurate and complete to the best of the vendor's knowledge and belief as at the date of execution. A materially false declaration may give rise to claims under Section 3 of the Misrepresentation Ordinance (Cap. 284) and the estate agent's professional obligations under the Estate Agents Ordinance (Cap. 511). Forms-legal.com provides a Vendor Disclosure Statement template compliant with Hong Kong property law and the Estate Agents Authority (EAA) code of practice requirements. The Vendor's Solicitors' Requisitions on Title response and the formal title deduction process are separate from but complementary to the vendor disclosure statement — together they provide the buyer's solicitors with a thorough picture of the property's legal position before completion at the Court of First Instance or Lands Tribunal if disputes arise.