In the first of such cases, the Housing Department has successfully prosecuted a tenant of a Home Ownership Scheme flat for entering a tenancy agreement with the owner who had alienated the flat without paying the premium.

The owner bought the flat in Kwong Ming Court, Tseung Kwan O, in 1998. He entered into a tenancy agreement with the tenant in October 2007 for two years at a monthly rent of $6,500, without the Housing Authority's consent or premium paid. The tenant was aware that the owner had not paid it.

Kwun Tong Magistrates' Court convicted both the owner and the tenant on November 3.The owner was fined $6,000 and the tenant $5,000.

The department said owners who have paid a premium will receive a letter from the department, stating that it has been paid. Potential tenants should always ask to see the letter.

If people knowingly rent an HOS flat on which a premium has not been paid, they may be prosecuted and the maximum penalty is a fine of $500,000 and a year in prison. The tenancy agreement will also be void.

So far this year, 10 other owners and one buyer in eight cases have been prosecuted successfully for alienating HOS flats without paying premiums.