Protection plan for buyers of new flats
Home buyers will gain full ownership of unfinished flats as long as they continue to make mortgage payments under a Lands Department proposal to provide better protection to purchasers, Director of Lands Patrick Lau Lai-chiu told legislators yesterday.
This move comes after the collapse of the luxury Villa Pinada and Aegean projects last June, which exposed a dangerous flaw in the consent scheme regulating the presale of unfinished flats.
Hundreds of people who had bought flats at the two Tuen Mun estates faced the prospect of being forced to repay their mortgages while losing ownership of their flats to banks and lenders. Rescue packages were eventually put together to complete the developments.
The new proposal would avoid a repeat of this situation as buyers who had made down payments and mortgage payments would have unconditional ownership of the flats upon completion.
'This is the best way to protect flat purchasers,' Mr Lau told legislators at a joint meeting of Legco's housing and lands panel.
Other key changes include:
Requiring developers to provide proof of adequate finances to the government's Legal Advisory and Conveyancing Office within six weeks if they face an overrun of 10 per cent of total construction costs;
Requiring developers to declare any conflict of interest with the lawyers they hire to carry out conveyancing.
Yesterday's meeting was called to brief legislators on details of the proposal, which will later be tabled to Legco for approval. But panel legislators said the government should go further and ban solicitors from representing any developer if they were also company directors.
Independent legislator Albert Chan Wai-yip said the government must outlaw this direct conflict of interest.
Democrat James To Kun-sun said: 'It is the government's responsibility to protect the interests of the public.'
