In the New Territories, the Block Government Leases (BGL) were granted in 1905 pursuant to the New Territories (Land Court) Ordinance 1900 (land parcels held under BGL are known as Old Schedule Lots (舊批約地段)). The Ordinance also declared all unclaimed land in the New Territories as Government Land.
Land parcels in the New Territories which were disposed of after 1905 are known as the New Grant (NG) Lots (新批地段).
In early years, similar to today, the NG Lots were disposed of mostly by public auction. Instead of granting immediate Government leases, the Government sold the NG Lots subject to the Conditions of Sale published in the Government Notices (GNs) prevailing at that time. The main purpose was to ensure the land parcels would be developed within a specified period and could not be held as an investment or as a speculation.
Before the Second World War, the GN conditions were widely used, but Special Conditions were also added to suit individual requirements. The two most common GNs were GN 365 of 1906 and GN 364 of 1934. After the Second World War, this practice was gradually replaced by issuing leases with own Conditions of Sale.
Where a land parcel was sold under the Conditions of Sale, the purchaser received the Conditions of Sales together with a Memorandum of Agreement which he signed. These documents together constituted a binding contract (Attorney General v Tong Iu  HKLR 603). The interest of the purchaser was merely an equitable interest under the contract. The equitable interest was converted into a legal estate when the Conditions had been complied with. The Certificate of Compliance issued by the Government provided such evidence.
Under Section 14(2) of the Conveyancing and Property Ordinance (Cap. 219), the Conditions of Sales signed before 1 January 1970 were deemed to have been complied with and the owner’s title was converted into a legal estate. The Certificate of Compliance as evidence is not required.