Loopholes remain in rules for flat sales

PUBLISHED : Wednesday, 14 April, 2010, 12:00am
UPDATED : Wednesday, 14 April, 2010, 12:00am

There are still many loopholes in the rules for the sales of uncompleted flats despite the government's efforts to make developers give better information to buyers - including three new rules announced this week - real estate professionals say.

The key problem about the lack of vital information such as selling prices and transaction records has yet to be resolved, academics and a surveyor said.

They have called for disclosure of a comprehensive price list for all flats at least 24 hours before they are put on the market, and immediate announcement of transaction details.

Currently, developers are required to publish a price list of the first batch of flats before they go on sale but not for additional flats that go on the market later. Agents usually supply details of selected flats, not all those that are on sale, to buyers.

'The government has been seeking ways to enhance transparency in different aspects such as show-flats information. But, in terms of the transparency of selling prices, it should seek to improve it,' Professor Eddie Hui Chi-man from Hong Kong Polytechnic University's building and real estate department said.

Especially, when developers launched additional flats on the market, the lack of a price list had caused some buyers to make wrong decisions, Hui said. 'There should be a price list similar to what the Housing Authority publishes when selling flats.'

Dr Lawrence Poon Wing-cheung, of the Institute of Surveyors' general practice division, said developers should disclose transaction details within a day of sale. 'This is direct market information, which is important to buyers,' he said.

Their comments came a day after housing minister Eva Cheng announced three new rules. They include requiring developers to provide accurate information in show flats, as well as printing the address of a project in their promotional material. The government also wants developers to give details of transactions linked to their senior executives.

A Transport and Housing Bureau spokesman said the government had been working on ways to improve the transparency of flat sales. He said officials yesterday met the Real Estate Developers Association to discuss the new rules. The association did not comment.

Professor Wong Chack-kie, associate director of Chinese University's Hong Kong Institute of Asia Pacific Studies, said the current sales procedures for unfinished flats 'is very different from that 10 years ago' and was unfair to buyers. A clear price list giving a full picture was essential to buyers, he said. Developers should also provide show flats of different types of units instead of just installing only one or two.