In recent years, many Hong Kong residents have chosen to emigrate, but some still own property in Hong Kong that has not yet been sold before they leave. If they are unable to find a suitable buyer right away, renting out the unit can help ease mortgage pressure. But if the owner wants to sell the property after moving overseas, how can the sale be handled?
For owners who have emigrated, the most important step is to sign a Power of Attorney for the sale before leaving Hong Kong, authorising a relative or friend to handle the transaction on their behalf. This document must be prepared and signed at a law firm, and executed in the presence of an independent witness in order to be legally valid.
A valid authorisation document for a property sale should include: (1) the owner’s full name — if the property is jointly owned, the names of all owners must be included; (2) the full property address; (3) the authorised person’s personal details, including their full name, Hong Kong ID number, and address; and (4) the validity period of the authorisation.
It is also important that the details entered and the way the document is signed match the information on the title deed exactly. For example, if the owner originally purchased the property and registered the deed using a Hong Kong ID number or passport number, the same identification details should be used in the authorisation document. This helps avoid inconsistencies that could affect the sale process.
Just as importantly, the document must clearly set out the scope of authority granted to the authorised person. For example, does the authorised person have the right to appoint an estate agent, sign the provisional sale and purchase agreement and the formal agreement, receive the deposit and final payment, and handle matters such as redeeming the title deeds and repaying the mortgage? If the scope of authority is drafted too narrowly, the authorised person may not have enough power to complete the transaction.
The authorised person must be at least 18 years old, be physically in Hong Kong, and have mental capacity. To protect their own interests, owners often add extra terms to the authorisation document, such as stating that the property must be sold at market value or rented out at market rent, or that it must not be sold for less than a specified amount. This helps ensure the property is not sold or leased on unreasonable terms.
There are also three main types of power of attorney: a General Power of Attorney, an Enduring Power of Attorney, and an Irrevocable Power of Attorney. The key difference is how long the authority remains valid and under what circumstances it can be cancelled. A General Power of Attorney will automatically become invalid if the person granting the authority loses mental capacity.
An Enduring Power of Attorney remains valid even if the person granting it later loses mental capacity. This type of authorisation is often used by elderly people when planning how their assets will be managed. For example, if they are worried that illness, dementia or other health issues may affect their ability to handle their own finances in the future, they can appoint someone in advance while they are still mentally capable.
An Irrevocable Power of Attorney is different. Its main feature is that the authorised person has already given something of value to the owner in return for that authority. Because money or other consideration is involved, the owner cannot cancel the authorisation at will, as they could with a General Power of Attorney, since doing so could affect the authorised person’s rights.
If a property you are interested in is being sold by an authorised representative rather than the owner directly, buyers should be extra careful to avoid fraud. Before signing anything, make sure to check both the scope of authority stated in the power of attorney and the identity of the authorised person. The deposit cheque should also be made payable to the seller’s law firm, not to the owner or the authorised representative personally.
