Procedure where owner of an encumbrance cannot be found

Section 12A of the Conveyancing and Property Ordinance sets out the procedure to be followed where the owner of an encumbrance (such as a mortgage) is out of the jurisdiction, cannot be found or is unknown or where the identity of the owner is uncertain. It prevents titles from becoming unmarketable because of these encumbrances that the landowner is willing to discharge. In Cheung Ting (or Teng) Fan (or Fun) Tso ([2011] HKEC 1369) the Tso was the Government lessee of land. A Chinese Customary Mortgage of the land had been created in 1923. The Tso was unable to find the person entitled to the benefit of the mortgage and to repay them. In fact, it was highly possible that the mortgage had already been paid off. The Tso made an application under section 12A. The court permitted them to make a payment into court. The Tso was then to advertise the fact of the payment into court in a widely circulated local Chinese newspaper (the last time the mortgagee was heard of he was living in Shenzhen). No less than 21 days after the advertisement, the Tso could apply for a declaration that its title was free of the mortgage. This would facilitate any dealing with the property.

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