Watchdog backs flat-sales legislation

PUBLISHED : Friday, 25 August, 2006, 12:00am
UPDATED : Friday, 25 August, 2006, 12:00am

Consumer Council lends its weight to calls for regulation on the purchase of unfinished units

The consumer rights watchdog yesterday added its weight to calls for legislation to regulate the sales of uncompleted flats in Hong Kong, ahead of today's four-party meeting to discuss recent sales strategies.

The strongly worded remarks from Pamela Chan Wong Shui, chief executive of the Consumer Council, followed the government's warning that it would not rule out the possibility of introducing stringent measures to regulate the sale of uncompleted flats, including the option of legislative control.

Mrs Chan said there had been a significant reversion in the protection for consumers' rights in flat sales.

'The method of selling uncompleted residential units in Hong Kong is the most creative in the world. There are all sorts of pretexts to promote sales, such as priority sales, 'handshaking price' and 'sincerity price',' she said.

Hong Kong has no legislation to regulate sales of unfinished flats. There used to be administrative measures to manage this, but the rules were abolished phase by phase in 1998, 2001 and 2003.

In its internal guidelines introduced in June last year and revised this year, the Real Estate Developers Association requires its members to publish a price list of the first batch of sales units 24 hours before they are sold.

But the recent handling of sales of Le Point in Tiu Keng Leng, Tseung Kwan O, by Cheung Kong, and that of Park Island's Ocean Crest by Sun Hung Kai have raised concerns.

Cheung Kong was accused by the media of not providing a price list when it began selling Le Point, while Sun Hung Kai Properties is alleged to have demanded $50,000 from potential buyers to see the price list for sales of 50 Ocean Crest units.

The developers denied accusations of breaching the guidelines, while the association would only admit that there were grey areas in the guidelines, leaving room for improvement.

Mrs Chan's call was yesterday supported by Democratic Party chairman Lee Wing-tat.

'How could we expect the developers to self-regulate, especially [when] those who violate the guidelines are the biggest. The situation is absolutely unacceptable.'

The Housing, Planning and Lands Bureau, the Consumer Council and the Estate Agents Authority will meet the association this afternoon to discuss breaching of the cartel's internal guidelines on the sales on uncompleted flats.

Speaking at his company's meeting to announce the interim results, Victor Li Tzar-kuoi, deputy chairman of Cheung Kong (Holdings), said legislation was unnecessary.

Mr Li said: 'Sales volume of projects developed by the group is huge, but the company has not received any complaints from customers.

'I am satisfied with the [existing] arrangement for selling uncompleted flats. It is not necessary to regulate pre-sales through legislation. However, if the authority plans to do it, I personally will not oppose the idea.'

Executive director of HKR International, Victor Cha Mou-zing, also opposed legislation, adding that the existing arrangement was sufficient.

Mr Cha said some developers might not follow the guidelines but the government should not penalise the entire industry.

A government source said it would study the existing guidelines first.