Properties, estates and ownership of properties in Hong Kong1

1. Two fundamental concepts of land law: Tenure and estate

1.1. Tenure and the doctrine of tenure:
1.1.1. Developed during the feudal system of the Middle Ages in England.
1.1.2. A social system in which all land was held directly from the King.
1.2. ‘Tenure’ meaning holding.
1.2.1. The person holding the land was called a ‘tenant’
1.2.2. Reflect the fact that he was not an owner of the land, the tangible aspect.
1.2.3. He merely held the land in return for services provided to the King.
1.2.4. The doctrine of tenures developed: details of specific services which had to be
performed by the tenants.

2. Problem with the doctrine of tenure

2.1. Tenant did not own the land, only the Kind did.
2.2. What did a tenant have in the land when in fact he was allowed to be on the land
by the King?
2.3. The concept of ‘estate’: focus on the relationship, right or interest, between the
tenant and the land.

3. The concept of ‘estate’ in land law:

3.1. A particular interest in land being held by the owner of it.
3.2. Defines the length of time for which the right to the land will last, which is the
most important aspect of the concept.
3.3. E.g,.
3.3.1. Fee simple: a perpetual right to the land: see para 6 post.
3.3.2. Life estate: the estate ends on the death of the owner of it and the land goes to
the holder of the next estate: see para 6 post.

4. Basic principles in real estate law

4.1. Only interests in land can be owned by a person. The government always owns
the land, i.e., the tangible aspect of the land.
4.2. Real property comprises land interests, the relation between the owner and the
interest is a real relation, which is against the whole world: see above. The
following are main types of land interests in Hong Kong.
4.2.1. Lease: including Government leases.

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Hong Kong Land Law: Sarah Nield; Property Law – Roger J. Smith

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4.2.2. Undivided shares in a multi-storey building.
4.2.3. Right over another’s land: e.g., easements, land covenant, etc.

5. The concept of real estate

5.1. Refers to the extent or duration in point of time of the right or interest being
exercisable by the person holding them.
5.2. Being defined as such, leasehold interest is, among others, the most important
type of real estate in Hong Kong.
5.3. To layman, same as land.
5.4. Personal estate: chattel real and chattel personal: see Lecture 2.

6. Types of real estate

6.1. Freehold estates: estates with uncertain duration. Among others, fee simple
estate is the largest estate, which lasts for the lifetimes of the tenant and his
heirs.
6.2. Leasehold estates
6.2.1. Fixed term lease: last for a period specified. May be ended before the
expiration of the term when, says, the tenant surrenders or give up the lease
prematurely.
6.2.2. Periodic term lease: continues for a renewable period until it is terminated by
notice from either the tenant or the landlord to the other. The time for
termination of the term is made certain by the notice.

7. Estate: four aspects

7.1.1. Possession
7.1.2. Representing the income value of the land
7.1.3. Includes now or in the future;
7.1.4. The entitlement to the rental of an office of the office owner is also possession
in law.
7.2. Time
7.2.1. The most important aspect of the concept.
7.2.2. All types of estate have the notion of possession, now or in the future, for a
period of time.
7.3. Alienation
7.3.1. Power to transfer of the ownership by, says, a sale, forming security, e.g.,
mortgage.
7.4. Title

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7.4.1. Title to an estate: signifies the owner of the estate has the best right to the
thing or interest, i.e., to exclude the others, within the time to which the estate
relate.
7.4.2. Transaction in real property: conveyance focus
7.4.2.1. Title: who has the immediate right to the property?
7.4.2.1.1. Subject matter of conveyance when the property in question is not in
dispute.
7.4.2.2. Property: estate, interest, etc.

8. Technical meaning of estate in land law

8.1. An interest which is capable of lasting for an indefinite or definite period of
time.
8.2. A particular interest in land being held by the owner of it.
8.3. Defines the length of time for which the right to the land will last.
8.4. E.g., fee simple: a perpetual right to the land; life estate: the estate ends on the
death of the owner of it and the land goes to the holder of the next estate.

9. The meaning of property in the HKSAR: a statutory description

Property is defined generally to include:
9.1. Money, goods, choses in action and land; and
9.2. Obligations, easements and every description of estate, interest and profit,
present or future, vested or contingent, arising out of or incident to money,
goods, choses in action and land: s 3 Interpretation and General Clauses
Ordinance (Cap 1).
9.3. The section does not use the term ‘estate’ in defining the meaning of property;
9.4. Leases, i.e., chattels real, almost completely assimilated into realty, i.e., land;
9.5. The definition does not distinct realty from personalty, reflects many technical
rules apply to both, yet, the range of interests relating to realty is wider than that
of personalty.
9.6. In the HKSAR, the most important example of real estate in Hong Kong is the
government lease, i.e., the lease granted by the Government.

10. Characteristics of property rights: common law

10.1. Characteristics
10.1.1. Definable;
10.1.2. Identifiable by third parties;
10.1.3. Transmissible to third parties;
10.1.4. Some degree of permanence or stability

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National Provincial Bank Ltd v Ainsworth [1965] AC 1175, 1247G-1248A.
In that case, the House of Lords of England held that the occupation of a property by a
deserted wife did not amount to a right in rem and so was not enforceable against
third party mortgagees.

10.2. In common law, the courts have the power to expand the categories of interest
recognized as land interests in or over a piece of land, and the interests have
different rights and obligations attached to it.
 
11. Co-ownership of property2
11.1. Concurrent holding of estates by different persons.
11.2. Two types, viz., joint tenancy and tenancy in common.
11.3. Importance of the concept in Hong Kong: multi-storey building.

11.4. Joint tenancy:

11.4.1. An estate or a piece of land being held by two or more persons concurrently as
joint tenants; hence
11.4.2. Existence of four unities: unity of interest, title, time of acquisition and
possession.
11.4.3. The right of survivorship
11.4.3.1. When a join tenant dies, the land will vest automatically in the survivors.
11.4.3.2. Effect: last survivor of the joint tenants becomes the owner of the estate.
11.4.4. Severance: joint tenancy becomes tenancy in common , which can be done by:
11.4.4.1.1. Agreement between the joint tenants;
11.4.4.1.2. Serving of notice of severance by one to others; or
11.4.4.1.3. Alienation by one of the joint tenants of his interest to an outsider.

11.5. Tenancy in common

11.6. Only unity of possession.
11.7. Right of survivorship does not apply: upon the death of a tenant in common, his
share be passed under the tenant’s will or on an intestancy.
11.8. Interest held by the tenant: separate but undivided share.
11.9. Relationship between the co-owners must be a tenancy in common:
non-existence of any unity of interest or title or time of acquisition.
12. Presumptions
12.1. At law, i.e., in common law: joint tenancy, but now superceded by statutory
law.

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The concept has nothing to do with lease.
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12.2. Statutory law, i.e., ordinance: the presumption now is tenants in common: s 9
Conveyancing and Property Ordinance (Cap 219) (“CAPO”).

13. Main types of interests in land in Hong Kong:

13.1. Government leases.
13.2. Undivided shares in multi-storey developments. The right lasts for the duration
of the government lease unless it terminates earlier.
13.3. Short term leases, i.e., tenancy
13.4. Rights over the land of the others e.g., easements, land covenants, etc.

14. The main transactions in the HKSAR relating to land

14.1. Acquisition of land interests by consent of the parties
14.1.1. Agreement,
14.1.2. Gratuitous transfers, i.e., transfer without charge or obligation or consideration,
e.g., gift.
14.2. by the operation of law:
E.g., where a person die intestate, i.e., without a will, his estate, including both
real and personal, be transferred under the Intestates’ Estates Ordinance (Cap
73)

14.3. By sale and purchase

14.3.1. The object is to transfer the vendor’s interest in the land to the purchaser.
14.3.2. types:
14.3.2.1. Purchase of government land by public auction.
14.3.2.2. Sale between citizens, e.g., purchase of undivided shares in multi-storey
building together the exclusive right to use a flat.

14.4. Mortgage
14.4.1. The mortgage of a legal estate by way of a legal charge by a deed;
14.4.2. Owner of the land creates a charge over his land in favour of the lender as
security for a loan;
14.4.3. The mortgagee has the right to look to the property for the repayment of the
loan forming the subject matter of the mortgage;
14.4.4. As such, the rights or interests of the mortgage in the property is an
encumbrance over the land and is proprietary by nature, i.e., enforceable
against whoever has knowledge of the mortgage.

14.5. Formation of covenants in land

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14.5.1. A covenant: a promise being made in a deed, i.e., under seal.
14.5.2. Effect:
14.5.2.1. Confers a benefit on the land one party and a burden on the land of another.
14.5.2.2. The burden:
14.5.2.2.1. A positive covenant: obligation to do something; or
14.5.2.2.2. A negative covenant: obligation not to do something.

14.6. Leases
The object: to grant exclusive possession of the land by the land owner to
another for a period of time, i.e., a term, in return for a sum of money, i.e., rent.

14.7. Easements
The creation of a right over the land of another, e.g., right of way.

14.8. Licence ?– not an interest in land

14.8.1. Nature of a licence: a mere permission granted by one party to another to do
something on the land of the grantor which without the permission would be
unlawful.
14.8.2. In general, do not create interests in land but are enforceable in contract or
under equitable principles.