BOVAEP Estate Agent TPC key terms

A short binding contract signed before the formal sale and purchase agreement, recording price, deposit, completion date and parties, and usually forfeiting the deposit if the purchaser defaults.

The statutory system requiring estate agents and salespersons to hold a licence from the Estate Agents Authority before carrying out estate agency work in Hong Kong.

Any work done in connection with the sale, purchase, letting, or acquisition of an interest in real property for a client in return for commission or other remuneration.

The statutory body that licenses estate agents and salespersons, issues practice circulars, investigates complaints and disciplines licensees for breaches of the Ordinance and Code of Ethics.

The EAA's mandatory standards requiring licensees to act honestly, with due diligence and in the client's best interest, including duties of disclosure, confidentiality and fair dealing.

The duty to tell a client in writing about any personal or financial interest, dual agency, or relationship that could bias advice, and to obtain informed consent before continuing to act.

Acting for both the vendor and the purchaser, or both landlord and tenant, in the same transaction; permitted only with full written disclosure and consent of both parties.

The requirement to state clearly, before or at the time of engagement, the amount or rate of commission, who pays it, and any rebate or benefit received from the other side.

The standard contract, usually on the Law Society format, that supersedes the provisional agreement and sets out full terms, warranties, title requirements and completion mechanics.

A document evidencing ownership of or an interest in land, forming part of the chain of title that a purchaser's solicitor investigates before completion.

A document that adequately identifies the property, shows the seller's ownership and reveals no encumbrance, from which the chain of ownership can be traced to the present.

Any right, interest, charge or restriction over land that lessens its value or limits its use, such as a mortgage, easement, covenant or caveat.

A right enjoyed by one piece of land over another, such as a right of way or drainage, that benefits the dominant tenement and burdens the servient tenement.

A promise in a deed restricting how land may be used or built on, which can bind successors in title and may be enforceable by affected parties even without ownership of the land.

An interest in land held for a fixed term of years under a lease or government lease, as distinct from freehold ownership, and central to Hong Kong land tenure.

The Crown or government lease under which land in Hong Kong is granted for a term of years, subject to conditions such as user, building covenants and rent.

A formal variation of government lease conditions, such as user or plot ratio, granted by the Lands Department usually on payment of a premium or subject to conditions.

The consideration paid to the government for the grant, extension or modification of a lease, reflecting the development value conferred by the change in rights.

A valuation approach that derives value from recent transaction prices of similar properties, adjusted for differences in time, location, size, condition and tenure.

A valuation approach that capitalises a property's net rental income at an appropriate yield to indicate market value, used mainly for income-producing property.

The rate, expressed as a percentage, used to convert a property's net income into value; it reflects risk, growth expectations and comparable market yields.

A development appraisal that deducts total development costs, including finance and developer's profit, from the completed value to arrive at the site's residual land value.

The estimated total market value of all units or space in a proposed development on completion, before deducting construction, finance, professional and marketing costs.

The allowance in a development appraisal for the entrepreneur's risk and return, commonly expressed as a percentage of gross development value or of total development cost.

The loss in value of a building from physical deterioration, functional obsolescence or external factors, often measured by the age-life or breakdown method.

The cost to rebuild or replace a building to its existing standard for insurance purposes, excluding land value and often including demolition and professional fees.

A document binding all owners in a multi-unit building, allocating shares, management responsibilities, common parts, and restrictions on use and alienation.

A body corporate formed by owners under the Building Management Ordinance to manage common parts, maintain the building and administer funds and DMC obligations.

The periodic sum owners pay, usually in shares under the DMC, to cover building management, cleaning, security, repairs and reserve fund contributions.

A reserve accumulated from owners' contributions to finance future major repairs, replacement of installations or capital works, kept separate from routine management expenses.

The annual income from a property expressed as a percentage of its capital value or price; gross yield uses rent, net yield deducts outgoings.

The proportion of rentable space in a market or building that is unoccupied and available to let, a key indicator of supply-demand balance and rental direction.

The pace at which available space or new units are taken up by occupiers or buyers over a period, used to gauge demand strength and future supply pressure.

The recurring pattern of boom, slowdown, recession and recovery in property prices, rents and construction activity, driven by credit, supply lags and economic conditions.

The best rent reasonably obtainable for a property let on standard terms between willing parties at the valuation date, reflecting current comparable lettings.

A lease clause allowing rent to be reset periodically to market level or by a formula, preserving the landlord's income against inflation over a long term.

The Hong Kong legislation empowering the Town Planning Board to prepare statutory plans, zone land, consider applications for planning permission and enforce against unauthorized development.

A statutory plan showing land-use zones, such as residential, commercial or green belt, with a schedule of permitted uses and uses requiring planning permission.

Formal consent from the Town Planning Board to carry out development or a change of use that is not permitted as of right under the applicable statutory plan.

The ratio of total gross floor area of a building to the site area, controlling development density under lease conditions and statutory or outline zoning plans.

The proportion of a site covered by the building footprint, controlling bulk and open space; often capped alongside plot ratio in lease and planning controls.

A statutory process identifying, predicting and mitigating the environmental effects of designated projects before approval, with public inspection and conditions attached to permits.

Customer due diligence, record-keeping and suspicious transaction reporting duties imposed on estate agents to prevent money laundering and terrorist financing in property deals.

The law governing collection, use, storage and disclosure of personal data, requiring a stated purpose, accuracy, security and access rights for clients' information.

A separate bank account in which client money such as deposits and rent is held in trust, kept distinct from the agent's own funds and properly accounted for.

The sum paid by a purchaser on signing the provisional agreement as evidence of good faith, usually forfeited to the vendor if the purchaser fails to complete.