Many people are given false confidence in legal documents; simply because they are written in black and white doesn’t mean much in the obscure face of the law.

In a typical real estate transaction, the parties enter into a sale and purchase agreement (SPA) that contemplates a closing where the real estate is assigned by a deed. What happens to the obligations stated in the SPA after the deed is delivered? Under the “merger doctrine”, which some lawyers assert is trite law, those obligations likely disappear and are no longer enforceable.

For example, Morgan Stanley negotiates a purchase agreement to buy a parcel of undeveloped land that is zoned agricultural. They include in the SPA a requirement that the seller rezone the land before the closing to enable them to build a villa. The seller fails to rezone the land, but MS closes anyway and accepts a deed from the seller. MS will not be able to sue the seller after the closing to enforce the rezoning requirement in the SPA. The merger doctrine says that all prior negotiations and agreements – including that purchase agreement, are deemed “merged” into the deed. The prior SPA ‘disappears’, and the rights of the parties are governed solely by the deed. Unless the deed restates the obligation that was in the purchase agreement, the obligation ceases to exist.

See, e.g. Ho King Yim v Lau King Mo 1980 HKCA and the root key case of Leggott v Barrett (1880) 15 ChD 306. Join the forum discussion on this post – (1) Posts

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As any owner of a decent flat in Hong Kong would be aware, the rights and obligations of an owner is governed (at least in part and mostly) by a deed of mutual covenant (DMC). The DMC is responsible for allowing co-owners of a building exclusive rights of enjoyment in their own respective flats and units. It is also responsible for restraining co-owners from doing things injurious to other co-owners, such as prohibiting: funeral ceremonies in the building; running brothels; ……

As we all may know, a Court makes a bankruptcy order only after a bankruptcy petition has been presented – either by the bankrupt himself, or a creditor. This order lasts 4 years (simple discharge) or after all the debts have been paid. During the duration of the order, someone (a trustee) counts all your assets and manages them to repay the debts.

Sometimes, it is useful to annul a bankruptcy order, e.g. if you want to be a director or lawyer, it is not good to have a bankruptcy record. Under s.33(1)(b) of the Bankruptcy Ordinance, you can do so. However, it is a contentious piece of legislation. ……

Hong Kong land law is based on English land law; but, in relation to multi-storey buildings in multi-occupation, Hong Kong has developed a method of regulating the rights and duties of a multiplicity of owners among themselves. This involves each owner becoming what is called in English land law a ‘tenant in common’ of the land on which the building is erected; each tenant in common is treated as having a quantified but undivided share in the land, and as being entitled, as an incident of his ownership of that undivided share, to the exclusive use of his unit in the building.

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Say, when you buy a car park space and the conditions say that one residential tenant shall have one car park space, can you park two vehicles on that space, one on top of the other, using a stacking device? Join the forum discussion on this post – (1) Posts