A Home Ownership Scheme owner leased the premise without settling the premium with the Housing authority. The owner was convicted of breaching the Housing Ordinance, and was fined $20,000 at the Shatin Magistracy last month.

A finance company was also convicted for offering an unlawful mortgage and fined $20,000 at the Fanling Magistracy last month.

The company entered into a re-financing agreement with an HOS owner to create a mortgage in 2006, while the owner had not yet settled the premium or obtained  the Director of Housing's prior consent.

The Housing Authority reminds owners of the Home Ownership Scheme, the Private Sector Participation Scheme and Tenants Purchase Scheme to comply with restrictions on the selling, letting, mortgage or re-financing of flats

Owners and finance companies should obtain the prior consent from the Director of Housing or pay the assessed premium to the authority before proceeding to mortgage the property. The maximum penalty for unlawful alienation is a $500,000 fine and one year's imprisonment.

Owners with financial hardship can apply for approval from the Director of Housing for re-financing of their subsidised flats without first paying the premium.