Registered and Unregistered Titles: Protection for Purchasers and Beneficiaries
The Registration of Titles and Land (Miscellaneous Amendments) Bill has passed its third reading on 25 September 2025. The new system is expected to take effect to “new land” in 2027, upon the passing of related subsidiary legislations and completion of preparatory and public education by the Government[1].
A key theme of the new system is that the title register constitutes conclusive evidence of title. As explained in the article by Emily Ting and Eunice Lui, the Bill provided that a bona fide purchaser for value and in possession would enjoy an indefeasible title even if the transaction was effected by fraud. In respect of sale of property by a trustee in breach of trust, to further strengthen the concept of supremacy of registered title, in the second reading of the Bill, it was further amended such that, to acquire an indefeasible title, not only does the purchase have to be for bona fide and valuable consideration, but the purchaser must also have no knowledge of the trustee’s breach of trust. Yet, the purchaser has no duty to inquire beyond the title registered and should not be deemed to have knowledge of the breach simply because they have not made such inquiries[2].
As we understand, the Land Registry has initiated an internal study on the conversion of the existing 2.9 million unregistered titles to the title registration system, and the Government is going to consult stakeholders next year on the feasible conversion options. It would indeed take some time before the conversion may take place.
Thus, it remains germane to review the protection afforded to purchasers and beneficiaries of trust under the current legal framework.
Protections for purchasers
The legislative framework in Hong Kong, consistent with the common law, is designed to protect bona fide purchasers for value who acquire property from trustees, even where the sale constitutes a breach of trust. The rationale is to promote certainty and reliability in property transactions, ensuring that innocent purchasers, short of knowing receipt or dishonest assistance, are not unduly prejudiced by the internal affairs of a trust.
It is expressly provided under section 19 of the Trustee Ordinance (Cap. 29) that purchasers or mortgagees dealing with trustees are not required to investigate the necessity or propriety of the transaction or the application of the proceeds. The upshot is that the title of the equity’s darling is protected from being set aside solely due to a breach of trust by the trustee.
Section 52 of the Conveyancing and Property Ordinance (Cap. 219) extends similar protection to purchasers in the context of sales made under a mortgage. Even if the sale was unauthorized or improperly exercised, the purchaser’s title is not affected, although those harmed by the breach are entitled to a remedy in damages against the person exercising the power of sale.
Section 8 of the Land (Compulsory Sale For Redevelopment) Ordinance (Cap. 545) also provides that, immediately upon the purchaser of the lot becoming the owner, all the rights of any prior owner including the prior owner’s assigns or personal representatives in the lot shall absolutely cease (see however the exception concerning possessory title in Chan Wing Tong v Kam Chung Building (Jaffe Road) (IO) [2024] 2 HKLRD 1). This further reinforces the security of the purchaser’s title.
Statutory Protections for Beneficiaries
While purchasers are protected, beneficiaries are not left without recourse.
In Tao Soh Ngun v HSBC International Trustee Ltd [2019] HKCFI 1268, it was held that the Trustee Ordinance (Cap. 29) prevents trust instruments from exonerating trustees for breaches involving fraud, wilful misconduct, or gross negligence. This statutory safeguard ensures that beneficiaries can hold trustees accountable for serious breaches, even if the trust deed purports to limit liability.
Meanwhile, section 55 of the Probate and Administration Ordinance (Cap. 10) provides that if a personal representative purchases, either directly or indirectly, any property of the deceased, the sale shall be voidable at the instance of any interested party giving beneficiaries a statutory right to challenge such transactions.
Case law further supports the imposition of constructive trusts on surplus proceeds from the sale of mortgaged property, ensuring that mortgagees are under an equitable duty to account for the surplus to the mortgagor: examples include Kwok Lam Kuk v The Personal Representative Of Yip Wai Ming Kavin, Deceased [2025] HKDC 188 at [36] and Re Wing Fung Credit Ltd [2025] HKDC 1268 at [23]-[27]. This provides an additional layer of protection for beneficiaries or those with an interest in the property.
Section 20 of the Limitation Ordinance (Cap. 347) provides that, in general, actions by beneficiaries to recover trust property or for breach of trust must be brought within six years, unless it involves fraud or fraudulent breach of trust by the trustee, or where the action is to recover trust property or proceeds thereof in the trustee’s possession or previously received and converted to the trustee’s use: see Timmerton Company Inc v Equity Trustee Ltd [2015] 1 HKLRD 247 for an application of section 20. This ensures that beneficiaries can pursue claims in the most serious cases, regardless of the passage of time.
Conclusion
After the passing of the Registration of Titles and Land (Miscellaneous Amendments) Bill, subsidiary legislations will be introduced and the full implementation of the title registration to “new land” is expected in the first half of 2027. We shall keep track of the development and examine the effects of and questions arising from the actual implementation of the new registration system when the chance comes.
[1] Speech by the Secretary for Development on resumption of Second Reading debate on the Registration of Titles and Land (Miscellaneous Amendments) Bill 2025, retrieved from:
https://www.devb.gov.hk/tc/publications_and_press_releases/press/index_id_15300.html
[2] Speech by the Secretary for Development in moving Committee Stage Amendments to Registration of Titles and Land (Miscellaneous Amendments) Bill 2025, retrieved from:
https://www.devb.gov.hk/tc/publications_and_press_releases/press/index_id_15305.html
Authors: Ross Yuen, Eunice Lui.
Ross Yuen
Ross has his practice mainly in property law (including Chancery, Trust and Probate) and commercial law. He regularly acts in compulsory sale and adverse possession cases. Advising on other land related matters such as conveyancing, building management and tenancy is also his regular practice.
Visit Ross’s profile for more details.
Eunice Lui
Eunice was called to the Bar in 2024 and joined Chambers in the same year. Eunice is developing a broad civil practice, with particular emphasis on land-related matters. Eunice has recently appeared in two compulsory sale cases with Ross, in which one case concerns a building in Wong Nai Chung Road, and the other case being Tai Chung Property Ltd v Chen Lan Sum Irene (LDCS 4000/2023) [2025] HKLdT 40, which involves a building erected under the old Civil Servants’ Cooperative Building Society Scheme. Eunice accepts instructions in all areas of Chambers’ work.
Visit Eunice’s profile for more details.
This article was first published on 2 October 2025.
Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case. The photographs which appear in this article are included for decorative purposes only and should not be taken as a depiction of any matter to which the case is related. The views and opinions expressed in this article/material are solely those of the members authoring it and do not necessarily reflect the official policy or position of Denis Chang’s Chambers, or of any other member or members of Denis Chang’s Chambers.