EAQE Land search and property information question: possession of a flat after the owner defaulted

EAA EAQELand search and property information

A bank has taken possession of a flat after the owner defaulted and now instructs an agency to sell it. Which statement is correct?

A The defaulting owner must sign the provisional agreement and the assignment as well as the bank
B The bank may sell under its power of sale, usually 'as is' with limited information
C The bank cannot sell without first obtaining an order of the Court of First Instance in every case
D The purchaser must take over the owner's outstanding mortgage debt to the bank on completion

Show the answer and explanation

Answer: B. The bank may sell under its power of sale, usually 'as is' with limited information

Answer: The bank sells under its power of sale, usually 'as is' with limited information from the vendor. Why not the others: - The owner must also sign: The mortgagee exercises its own power of sale; the mortgagor need not sign. - A court order in every case: A legal charge commonly confers a power of sale exercisable without a court order once it has arisen. - The purchaser takes over the debt: The mortgage is discharged out of the price; the buyer takes free of it. Rule: A mortgagee in possession may sell under its power of sale. Because the bank lacks first-hand knowledge, it often sells on an 'as is' basis and may decline to give a Vendor's Statement, so the agent's own due diligence matters more. Source: Conveyancing and Property Ordinance (Cap. 219), section 51 and Fourth Schedule; Practice Regulation (Cap. 511C), Form 1; as at Oct 2026

Common mistake

Requiring the defaulting owner's signature on a mortgagee sale.

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Related EAQE questions

On 2 May, owner Mr Kam signs a provisional agreement to sell his flat to Ms Lui, who does not register it. On 10 May he signs a second agreement with Mr Pang, who knows about Ms Lui's agreement and registers his own on 12 May. Under the Land Registration Ordinance, whose agreement has priority?Which of these registered incumbrances is normally removed by the vendor on completion rather than continuing to bind the purchaser?Spouses hold a flat as joint tenants and are separating. Which of the following can convert their joint tenancy into a tenancy in common?

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An original question written to the published EAQE syllabus. Figures in the explanation carry their effective dates; check them against the current law before relying on them. Independent exam practice. Not affiliated with or endorsed by the Estate Agents Authority (EAA) or the examination administrator.

EAQE Land search and property information question: possession of a flat after the owner defaulted

EAA EAQELand search and property information

A bank has taken possession of a flat after the owner defaulted and now instructs an agency to sell it. Which statement is correct?

A The defaulting owner must sign the provisional agreement and the assignment as well as the bank
B The bank may sell under its power of sale, usually 'as is' with limited information
C The bank cannot sell without first obtaining an order of the Court of First Instance in every case
D The purchaser must take over the owner's outstanding mortgage debt to the bank on completion

Show the answer and explanation

Answer: B. The bank may sell under its power of sale, usually 'as is' with limited information

Common mistake

Requiring the defaulting owner's signature on a mortgagee sale.

Practise more EAQE Land search and property information questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Build a daily practice habit : a few exam-style questions a day, with worked answers. Free to start.

Start practising →