Property Novices Warned: Unapproved Law Firm Can Derail Home Transactions
SingTao · 1 SOURCESabout 2 hours ago5 MIN
Summary
A Hong Kong first-time property buyer found themselves in a precarious position when their mortgage bank suddenly informed them that the law firm they had hired was not on the bank's internal approved list, despite having already signed mortgage documents. With only three weeks until the scheduled completion date, the buyer faced the difficult choice between switching law firms or changing banks entirely. Senior barrister Luk Wai-hung (陸偉雄) provided expert analysis on the situation and outlined four practical solutions for buyers facing similar predicaments.
Key Points
- A self-described "beginner adult" posted on social media about discovering their law firm was not on the bank's approved list only after signing mortgage documents
- The bank informed the buyer approximately one week after signing that the law firm was not on their recognized list, leaving less than three weeks before completion
- Banks maintain internal approved law firm lists considering factors such as firm size, past cooperation history, and experience with mortgage and property transactions
- Senior barrister Luk Wai-hung emphasized that buyers should proactively verify with banks whether their chosen law firm is accepted before signing any agreements
- The bank's staff ultimately granted special approval allowing the original law firm to continue, enabling the buyer to proceed with completion
Why It Matters
This case highlights a common yet often overlooked pitfall in Hong Kong's property market, where buyers may face significant financial risks including default penalties if mortgage arrangements are not properly coordinated. Luk's expert guidance underscores the importance of due diligence at every stage of the property transaction process, particularly when engaging law firms and applying for mortgages, to avoid costly delays or deal failures .