Deed of Mutual Covenant and Owners' Corporation

IX. Deed of Mutual Covenant and Owners' Corporation

A 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).