HOS secondary-market purchase: check these certificates before the provisional agreement
Before signing the provisional agreement, the seller needs a valid Certificate of Availability for Sale and the buyer needs a valid Certificate of Eligibility to Purchase. The buyer's solicitor applies for the Letter of Nomination after signing. Each document has a different role and deadline.
Check the seller's CAS and the buyer's CEP first
For a transaction under the Housing Authority's Home Ownership Scheme (HOS) Secondary Market Scheme, the seller must produce a valid Certificate of Availability for Sale (CAS) and the buyer a valid Certificate of Eligibility to Purchase (CEP) before they sign the provisional agreement for sale and purchase. Once a flat is identified, give both certificates to the solicitors to check names, the property, the applicable eligibility and validity periods. An application for a certificate is not the same as a certificate already issued.
Identify the subsidised sale scheme governing the flat, its first assignment date and the resale restrictions that apply. HOS sale exercises can have different limits on when a flat may be resold and at what price in the secondary market. If the CAS is missing or the CEP has expired, settle the document or eligibility issue before committing to sign and paying a deposit.
The Letter of Nomination comes after the provisional agreement
The Letter of Nomination (LN) is not a third certificate to present before signing the provisional agreement. Under the Housing Authority's published Green Form procedure, the buyer's solicitor applies to the Housing Authority after that agreement is signed to confirm the buyer's eligibility. The buyer must wait until the LN has been issued before signing the formal agreement and the deed of assignment. White Form buyers should check the procedure and deadlines for their own White Form Secondary Market exercise with their solicitor.
| Document | Who arranges it | When to check it |
|---|---|---|
| Certificate of Availability for Sale (CAS) | Seller applies to the Housing Authority | Valid and matches the flat before the provisional agreement |
| Certificate of Eligibility to Purchase (CEP) | Buyer applies to the Housing Authority | Valid for the buyer before the provisional agreement |
| Letter of Nomination (LN) | Buyer's solicitor applies after the provisional agreement | Issued before the formal agreement and assignment |
Have the solicitors check the prescribed documents and dates
The provisional and formal sale agreements and deed of assignment must use the forms prescribed by the Housing Authority or Hong Kong Housing Society, as applicable. Before signing, ask the solicitors to confirm the correct forms, original certificates, parties' identities, flat details and the documents needed for the LN application. Allow for the nomination process when agreeing dates for the formal agreement and completion.
For Green Form purchases, the published Housing Authority procedure says the buyer's solicitor must apply for the LN within one month of the provisional agreement and at least five working days before the formal agreement and deed of assignment, or by the time specified by the Authority. A White Form or Housing Society transaction may involve its own applicable instructions; use those instructions and the timetable confirmed by the solicitors. If documents conflict or the LN has not arrived, ask for the issue to be resolved rather than relying on an oral assurance.
Allow for the unpaid premium when judging the price
A qualifying seller may transfer the flat in the HOS secondary market without first paying the premium. A buyer who later wishes to sell, let or otherwise assign the flat on the open market will have to deal with the premium obligation. This is not a fixed sum due on the day of the provisional agreement. Have the solicitor confirm the restrictions on that particular flat and include the future obligation in your view of its price.
When comparing advertised flats, record the certificate status, first assignment date, resale limits, asking price and proposed timetable side by side. Advertising information helps you shortlist homes; the certificates and transaction documents determine whether a particular purchase can proceed.