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IX. Deed of Mutual Covenant and Owners' Corporation

Deed of Mutual Covenant (“DMC”) is a document containing terms that are binding on all flat owners of a multi-unit or multi-storey building. Once a DMC is signed by the owner of a flat and the developer, it binds all the subsequent owners. It basically sets out rules for the management and regulation of the building. A detailed DMC can run to over a hundred pages. Terms in a DMC may include, for example:

 

  • residential flats cannot be used for commercial activities;
  • definition of the common areas of the building;
  • restrictions on the flat owners (e.g. no keeping of cats and dogs);
  • how to appoint a building manager (or building management company);
  • how to set up an Owners' Corporation;
  • how to make resolutions on matters concerning maintenance or renovation;
  • who should specify the management fees, and how.

No matter how a DMC is drafted, no provision may contravene the Building Management Ordinance (Cap. 344 of the Laws of Hong Kong).

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