Opinion | Why hasn’t Hong Kong updated its antiquated property title system yet?
- The Land Titles Ordinance was enacted in 2004 to set up a new registration system, but it still has not been implemented
- Homebuyers and owners need a digitised land register, like those in other leading cities, to reduce disputes, costs and uncertainty
A friend recently paid a 5 per cent deposit on an upscale apartment on Hong Kong Island. To his horror, his lawyer later informed him that the title to the property had been assigned to the seller by a court in a matrimonial case. For such properties, where the title is unclear, banks are reluctant to extend mortgages.
Our friend did check with the Land Registry before paying the deposit. All he saw regarding the seller’s title was the word “Assignment”. Nothing more.
This asymmetry of information about title does not arise in Boston, the San Francisco Bay Area, Los Angeles, Singapore, or England. In multiple cities in China, such as Beijing and Guangzhou, land and property titles are registered and open for examination online.
In 2004, the Legislative Council enacted the Land Titles Ordinance to set up a new registration system for land title and interests. However, the government still has not implemented the system.
As a result, to inspect the title deed, a buyer must engage a solicitor to liaise with the seller and/or bank (if the property is mortgaged). This adds to the cost and complexity of buying a home. More seriously, it takes time to retrieve the paper deed (to save on storage costs, some banks store deeds in offshore repositories).
