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SQESalespersons Qualifying Examination✓EAQEEstate Agents Qualifying ExaminationA car park unit's occupation permit and lease permit only parking, but the owner has used it as a shop for years. A buyer's solicitor raises a requisition. Why may the buyer be entitled to refuse to complete?
Answer: The breach of permitted user may make the title defeasible because of the risk of re-entry. Why not the others: - Higher stamp duty for shops: Stamp duty is charged on the instrument, not by reference to the unlawful use. - No key: Possession arrangements are not the legal issue here. - Car parks can never be sold separately: Car parking spaces are commonly sold as separate units. Rule: A material change in use in breach of the permitted user can make the title defeasible (liable to forfeiture and re-entry), which is an incumbrance on title. Hong Kong courts have treated such a breach as a defect entitling a purchaser to object. Source: Buildings Ordinance (Cap. 123), section 25; EAA, A Study Guide to Estate Agency Law and Practice, Part 5 (World Investment Ltd v Young King Asia Ltd [1996] 4 HKC 238); as at Oct 2026
Treating unlawful use as a matter between the owner and the Government that cannot affect a purchaser.
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Start practising →An original question written to the published SQE 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.