Property Collateral Agreement for Hong Kong

Property Collateral Agreement Template for Hong Kong

A comprehensive legal document governed by Hong Kong law that creates a security interest over real property in favor of a lender or security holder. The agreement details the terms and conditions under which the property serves as collateral for specified obligations, typically a loan or other financial facility. It includes provisions for the creation, perfection, and enforcement of the security interest, complying with Hong Kong's Conveyancing and Property Ordinance and related legislation, while establishing the rights and obligations of both the security provider and the secured party.

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What is a Property Collateral Agreement?

A Property Collateral Agreement is a crucial security document used in Hong Kong's financial and real estate sectors when property is offered as security for financial obligations. This document is essential in both commercial and residential property financing transactions, providing lenders with security over real property assets. The agreement must comply with Hong Kong's property and security laws, particularly the Conveyancing and Property Ordinance (Cap. 219) and the Land Registration Ordinance (Cap. 128). It sets out the terms of the security arrangement, including property details, secured obligations, enforcement mechanisms, and the parties' respective rights and obligations. The document is commonly used alongside facility agreements in lending transactions and requires registration with the Hong Kong Land Registry to ensure enforceability and priority.

What sections should be included in a Property Collateral Agreement?

1. Parties: Identification of the security provider (property owner) and the secured party (typically a lender)

2. Background: Context of the security arrangement, reference to any facility agreement or main debt obligation

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Grant of Security: Core provision creating the security interest over the property

5. Secured Obligations: Definition and scope of the obligations being secured

6. Representations and Warranties: Security provider's confirmations regarding ownership, authority, and property status

7. Covenants: Security provider's ongoing obligations regarding the property and security interest

8. Events of Default: Circumstances triggering enforcement rights

9. Enforcement: Rights and remedies upon default, including power of sale

10. Power of Attorney: Appointment of secured party as attorney for enforcement purposes

11. Further Assurance: Obligation to execute additional documents and take necessary steps

12. Miscellaneous: Standard boilerplate provisions including notices, amendments, assignment

13. Governing Law and Jurisdiction: Hong Kong law as governing law and jurisdiction clause

What sections are optional to include in a Property Collateral Agreement?

1. Insurance: Detailed insurance requirements - include if property insurance is not covered in facility documentation

2. Property Management: Include if specific property management obligations need to be imposed

3. Rental Income: Include if the property is or may be leased and rental income is to be secured

4. Multiple Properties: Additional provisions for cases involving multiple properties as collateral

5. Third Party Rights: Include if there are existing third party rights that need to be addressed

6. Priority Arrangements: Include if there are other security interests requiring priority arrangements

7. Environmental Matters: Include for commercial properties with potential environmental issues

What schedules should be included in a Property Collateral Agreement?

1. Property Description: Detailed legal description of the secured property

2. Form of Notice of Assignment: Template for notifying relevant parties of the security interest

3. Secured Obligations: Detailed list or description of secured obligations if complex

4. Existing Encumbrances: List of existing security interests or encumbrances on the property

5. Insurance Requirements: Detailed insurance specifications if applicable

6. Form of Property Manager Consent: Template for property manager acknowledgment if required

7. Required Consents and Registrations: List of required regulatory or third party consents and registrations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Hong Kong

Publisher

Genie AI

Document Type

Complaint Letter

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking

Real Estate

Financial Services

Property Development

Insurance

Legal Services

Construction

Property Management

Commercial Property

Residential Property

Relevant Teams

Legal

Real Estate

Credit Risk

Compliance

Banking Operations

Property Management

Security Administration

Loan Operations

Transaction Management

Portfolio Management

Relevant Roles

Legal Counsel

Property Lawyer

Banking Lawyer

Finance Manager

Credit Risk Manager

Real Estate Manager

Loan Officer

Compliance Officer

Property Developer

Security Trustee

Transaction Manager

Real Estate Director

Chief Legal Officer

Banking Operations Manager

Property Portfolio Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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