Rules for developers on flat sizes apply from next week
Developers will be required to follow new guidelines on the sale of uncompleted flats from December 1, including a realistic declaration of floor size that excludes common areas.
The Real Estate Developers' Association yesterday issued guidelines under which its members may calculate flat sizes. The guidelines, which are not legally binding, followed government instructions last week to introduce self-regulatory measures on the pre-sale practices for residential properties.
Developers are under fire for exaggerating the size of flats by including 'common areas' such as lift lobbies and security-guard rooms in calculating floor sizes.
Under the new measures, the developers will have to state a unit's price per square foot in terms of saleable area, instead of gross area. That will exclude the common areas. In addition, transaction information for individual flat sales, including the price and purchase date, will have to be published on the developers' website and at sales offices within five days after the signing of a preliminary agreement for sale and purchase. Currently, the transaction records have to be registered with the Land Registry within 30 days.
Marketing tactics by the city's big developers have been in the spotlight since Henderson Land Development 'skipped' 48 floor numbers at its 39 Conduit Road residential building in West Mid-Levels to make it appear taller than it was. That triggered the government to tighten guidelines on floor-numbering, under which developers have to state the floor numbers on sales brochures more clearly.
The Cheung Kong (Holdings) development Le Prime, the second phase of The Capitol in Tseung Kwan O to be launched this week, will be the first project to follow the new measures. Francis Wong See-chung, real estate director at Cheung Kong, yesterday said the firm would state a flat's price per square foot of saleable area on the price list of Le Prime, and also that based on gross area.
Having both prices meant it 'will be easier for the buyers to compare the flat price with the other residential projects', he said.
He believed it would not confuse the market, but buyers would need time to get used to it.
Chief Executive Donald Tsang Yam-kuen said last Friday that the government was reviewing the policy on 'green features' at new residential projects. Green features, which can include balconies and utility platforms - built, for example, for air conditioners and washing machines - may no longer be exempt from a building's gross floor area in new developments. That means those areas may not be included in the sale price.
Wong said it was acceptable as long as the new rules were clear enough for the developers to follow.
Executive Council convenor Leung Chun-ying said: 'No matter whether or not the government cancels the incentive policy on green features or not, the key issue is to let the buyers know what is included in the sale of flats.'
Surveyor Alnwick Chan Chi-hing said the government should announce as soon as possible whether the two sites in Tai Po opened for land auction next month would be affected by the review of green features. 'The policy will affect the offers from the developers.' he said.
1 Developers have to state a unit's price per square foot both in terms of saleable area and gross floor area
2 Transaction information of flats, including the price and purchase date, have to be published on the developers' website and sales offices within five working days of the signing of preliminary agreement for sale and purchase
3 Developers have to state the floor-numbering on sales brochures clearly