Guidelines on misleading flat sales brochures tightened

PUBLISHED : Thursday, 08 October, 2009, 12:00am
UPDATED : Thursday, 08 October, 2009, 12:00am

Developers will no longer be able to fool flat owners with artists' impressions of grand clubhouses and expansive green slopes that seldom materialise, under new guidelines that will prevent such features from appearing in sales brochures.

They will also be required to put nearby residential developments and unpopular facilities, such as landfill sites and cargo working areas, on location maps in their brochures.

But critics and the Consumer Council said more should done, because developers would still be allowed to use unrealistic graphics and pictures in promotional materials such as fliers and television advertisements, and purchasers would still not know what kind of common areas they were buying.

The guidelines, which are not legally binding, were announced by the Real Estate Developers Association yesterday in response to recent criticism that pictures and details in sales brochures were misleading.

Green Sense revealed in June that Cheung Kong (Holdings) had failed to show a landfill site opposite Lohas Park in Tseung Kwan O on the sales brochure's location map, while pictures of Lake Silver, a Sino Land development in Wu Kai Sha, did not alert buyers to the reality that sea views from some flats were blocked by another development.

Under the guidelines, promotional materials should be separated from sales brochures, with artists' impressions prohibited in the latter. Developers can include a one-page close-up picture showing the outer appearance or building elevation of developments, but it should be endorsed by the appointed architect.

The location map, used to show the development and limited surrounding areas, will have to show more communal facilities. A total of 34 facilities should be specified if they are near the development, compared with only 16 required by existing guidelines, issued last year. Most of the newly specified facilities to be shown on maps are not popular with residents, including crematoriums, mortuaries, slaughterhouses, bus depots, ventilation shafts, cargo working areas, petrol and LPG filling stations, sewage-treatment facilities and addiction-treatment centres.

Apart from the location map, the brochure should also include the Consumer Council's notes to buyers and a Chinese translation of the Deed of Mutual Covenant. Artists' impressions in promotional material will have to carry a disclaimer.

But the new guidelines, taking effect next month, will only apply to uncompleted residential properties.

Nan Fung Development managing director Donald Choi Wun-hing said that while the guidelines would help clarify things, his company would continue to create images for buyers' 'reference', but would not include them in sales brochures.

A Consumer Council spokesman said: 'This is only an enhancement measure, and more steps need to be taken in the future. We urge buyers to read the sales brochures, and they should be released earlier.'

Under existing guidelines, developers are only required to give buyers sales brochures 24 hours before the flats go on sale. 'That is not enough time for them to read such a thick and complicated brochure,' he said.

Democratic Party lawmaker Lee Wing-tat, who proposed the changes, said the scope of location maps was unclear.

'The landfill site opposite Lohas Park is over a kilometre away from the development,' he said. 'Should it be shown on the map?'

Lee suggested showing facilities within a kilometre of an estate in urban areas and within two kilometres in rural areas. He also said conversations between buyers and property agents should be recorded.

Green Sense project manager Gabrielle Ho Ka-po welcomed the rules but feared that developers would not show approved, but uncompleted projects, near the estates.

Raymond Chan Yuk-ming, chairman of the Hong Kong Institute of Surveyors' public and social affairs committee, said buyers should also be informed about the common areas they paid for.

'This is an important issue which is left out of discussion,' he said.