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Kenneth Ko

Industry players are seeking clarification on regulatory measures proposed for the sales description of residential properties.

 The Sales Descriptions of Uncompleted Residential Properties Bill, which was unveiled on Friday, has been hailed as a step forward in protecting consumers, but analysts said fine-tuning was needed.

 The calculation of gross floor area as stated in the Bill is one issue which has created confusion.

 Another question is whether or not the Bill should be extended to include completed properties. There are concerns that a discrepancy could develop between finished and unfinished projects.

 Under the Bill, the gross floor area of a flat is an apportioned share of the total domestic area of the development calculated in accordance with building regulations as approved by the building authority, which is proportionate to the share of saleable area.

 Tony Tse Wai-chuen, executive director of Emperor International Holdings, said there was a need for clarification of the definition of gross floor area.

 Under existing practices, certain areas were exempt from the calculation of gross floor area and it was unclear whether the building authority approved areas built as a result of these exemptions, he said.

 Mr Tse, who is also chairman of the Hong Kong Institute of Surveyors' general practice committee, said the Bill was generally acceptable but the Government should make some clarifications.

 He said measures should not be too rigid because of practical difficulties in implementation.

 Mr Tse said new rules should focus on ensuring sufficient information was available to the public as there was no standard definition of gross floor area.

 Developers use different ways to measure gross floor area. Some include the podiums, for example, while others may include gardens.

 This has been a big problem as unscrupulous developers have taken advantage of loopholes to inflate floor area for sale.

 It is not uncommon to find that the total floor area of flats on sale is 10 per cent or more above the gross floor area approved by the Government in the building plan.

 By inflating the gross floor area for sale, analysts said developers could work out a lower average selling price per square foot to entice buyers.

 SK Pang Surveyors & Co managing director Pang Shiu-kee said the calculation method for gross floor area as stated in the Bill indicated tighter controls which would restrict manipulation of property area for sale.

 Buyers would be better protected if gross floor area was based on the ratio between saleable area and the domestic floor area approved by the building authority, he said.

 However, Mr Pang said the Bill might not be enough to protect consumers as it only focused on incomplete residential properties.

 This meant that developers would not be governed by the Bill if they sold their properties after receiving occupation permits or upon completion, he said.

 He suggested that by simply dropping the word 'uncompleted' the Bill could be extended to all residential properties.

 Other areas Mr Pang said might need to be amended were the provision requiring that developers provide information brochures about other development works in and outside the project, and the expected date of these works.

 The provision requiring that sales brochures contain financial arrangements made available to buyers by any person other than banks was also unnecessary, he said.

 The Bill is open for public consultation until July 7. The Government hopes to table it in the Legislative Council at the end of the year.



Confusion over Bill sparks call for changes