Consumer watchdog seeks new laws in wake of Icon fiasco
The Consumer Council is demanding the government draft legislation to regulate the sale of new flats following an outcry over 'rubbish-dump' flats in a new Mid-levels estate.
Several buyers of the Icon in Mid-Levels were shocked by the condition of their flats, which included exposed flooring and walls and unfinished kitchens. Their cases reflected how vulnerable flat buyers could be if their properties fell outside existing regulations, the council warned.
Although the government has set up a committee to consider legislation, the council said officials should speed up the process and make sure flats in redevelopment projects - such as the Icon - were covered by it.
'It is necessary to have a law governing sales of all kinds of residential properties. There is an urgent need for that,' said Ambrose Ho Pui-him, convenor of the council's working group on consumer issues relating to residential property.
The council has received three complaints about the Icon sales.
Ho said two loopholes had been exposed by the controversy and they should be plugged.
Flats in redevelopment projects do not come under the Lands Department Consent Scheme, which approves developers' applications for presales but only for those in new-lease agreements.
Inaccuracies may arise in redevelopment sales brochures as developers are not obliged to hand them to authorities for approval.
It is also not necessary for developers who are not members of the Real Estate Developers' Association - such as Winfoong of the Icon - to follow voluntary guidelines that the government set for the association concerning the sales of unfinished flats.
Nine rules to enhance market transparency and avoid manipulation and a further 12 proposed requirements for show flats came into effect in June. They only apply to association members, making it difficult for consumers to know the difference.
Ho said the new law should cover all types of flats, including finished and unfinished ones, those that fall under the consent scheme and those that don't, to ensure all buyers had the same protection.
The steering committee on the Regulation of the Sale of First-hand Residential Properties by Legislation, set up in October, is expected to complete its work in a year.
It will deliberate on the definition of new flats, sales practices, price lists, show flats, saleable area, the enforcement mechanism and penalties.
Ho said while no laws were available in the meantime, the Estate Agents' Authority should make sure agencies follow its guidelines requiring them to provide accurate property information.
The council also called on the Law Society to add warnings on contracts for transactions of non-consent scheme flats so that buyers would be more cautious when considering the deal.
The Estate Agents' Authority started its investigation into The Icon case on Tuesday. It called on representatives of Centaline Property Agency to meet its officers at the authority office and passed them a list of questions to be answered within seven days.
The probe is to find out whether Centaline agents provided inaccurate information to flat buyers.
Earlier this week, Winfoong offered two options for buyers of problematic flats at The Icon. They can either receive HK$600,000 compensation and allow the developer two more months to finish the flats or accept a buyback offer valued at 120 per cent of their purchase price.