Conduit Road contracts 'lenient'
A barrister-turned-politician says he has never seen contracts as lenient as those for the controversial purchases of luxury flats at 39 Conduit Road.
Civic Party legislator Ronny Tong Ka-wah made his comment as he identified unusual conditions in the agreements for 20 transactions that were cancelled in the Henderson Land development.
He urged the housing and financial affairs panels under the Legislative Council to hold a joint meeting to discuss implications of the cancellations handled by the estate's developer, Henderson Land.
Tong said one condition allowed buyers to cancel the agreement at any time as long as they were willing to give up 5 per cent of the total purchase price, despite the fact that the buyers had already paid deposits of 10 to 15 per cent.
'I've never seen such contract terms throughout my 40 years of commercial sales practice,' Tong said. 'The terms are so lenient that they're more akin to a provisional agreement.'
He said buyers usually forfeited all deposits if they failed to complete transactions, displaying a general agreement used for other flat transactions containing such a condition.
He urged the Securities and Futures Commission to investigate the transactions, saying the loss of the 5 per cent deposit could be easily recovered from an increase in share price if someone intended to make use of the record-breaking flat price to boost the company's share price.
It was also hard to understand why Henderson Land did not pursue the interest costs induced by the cancellations, Tong said.
According to letters exchanged between the Lands Department and the developer, Henderson refunded more than HK$175 million to buyers who did not complete the deals.
Tong said the developer should explain to its shareholders why it had given up its compensation rights.
Henderson explained in a letter to the department earlier that it allowed a more flexible arrangement for buyers, such as extending the transaction date, because many banks referred to the granting of mortgages to those buyers as a 'sensitive' issue.