What is a Formal Sale and Purchase Agreement? Will I be bound to it?

A Formal Sale and Purchase Agreement (SPA) is a legally binding contract that outlines the terms and conditions agreed by the parties to the agreement i.e. the purchaser and seller of the property.  The Conveyancing and Property Ordinance requires all contracts for sale of land (including house/property/building) to be made in writing to be enforced … Read more

What is a Provisional Sale and Purchase agreement? Is it binding?

A Sale and Purchase Agreement (SPA) is an agreement signed and agreed upon by both the seller and purchaser regarding the terms of the purchase. The provisional agreement is prepared by the estate agent and is signed by both the purchaser and seller. The agreement contains the preliminary terms of the sale of the property … Read more

What is due diligence in a commercial real estate transaction?

Property due diligence is a fact-finding process done by the purchaser, to ensure there are no legal and/or financial concerns relating to the property. The purchaser would usually instruct a lawyer to conduct property due diligence, and the lawyer should inform them of any encumbrances related to the property. An encumbrance is anything that can … Read more

Can the landlord terminate a commercial lease?

Normally, commercial leases do not have a break clause in Hong Kong. However, if the lease agreement contains a termination clause then a tenancy may be brought to an end by the landlord due to: Non-payment of rent Breach of agreement by tenant Sale/development of property To exercise this right, the landlord will have to … Read more

How do I renew my office lease?

Mostly, commercial leases provide an option to the tenant to renew an existing tenancy. This option to renew gives the tenant a right to continue to rent the property after the expiry of the existing tenancy.  However, in absence of such an option to renew, you must negotiate a new lease before the expiration of … Read more