Section B – ALL FIVE questions are compulsory and MUST be attempted
Please write your answers to all parts of these questions on the lined pages within the Candidate Answer Booklet.
Mr Dong, the majority shareholder of Lide Company, provided his residential house as a mortgage for a loan agreement between Lide Company and the Bank. Both parties appropriately registered the loan agreement and the mortgage agreement with the relevant government agent.
Before the loan agreement matured, Mr Dong intended to sell the mortgaged house to Ms Lee and disclosed to Ms Lee the fact that the house had been mortgaged. Mr Dong also notified the Bank with respect to the transaction between Ms Lee and himself. Mr Dong and Ms Lee entered into a sales contract of real estate to proceed with the transaction. However, their application for registration was denied by the relevant government authority, because the Bank did not give consent in writing to this transaction.
In accordance with the relevant provisions of the Property Law:
(a) State whether the real estate contract was a valid one if the Bank disagrees with the transaction between Mr Dong and Ms Lee. (2 marks)
(b) Explain whether the government authority should register the contract if Ms Lee promises to repay the outstanding amount of the loan, even though the Bank did not give consent to this transaction. (2 marks)
(c) State whether the government authority should register the contract if Ms Lee repaid the outstanding amount of the loan, even though the Bank refused to give consent to this transaction. (2 marks) (6 marks)