• Fri
  • Nov 21, 2014
  • Updated: 12:33am
NewsHong Kong
PROPERTY

Home sales confusion looms ahead of new law

With developers issuing multiple brochures for the same projects before the new law kicks in, some homebuyers could also be at a disadvantage

PUBLISHED : Wednesday, 20 March, 2013, 12:00am
UPDATED : Wednesday, 20 March, 2013, 5:43am
 

The new law on flat sales may end up confusing buyers when it comes into force next month, as developers put out multiple brochures for the same projects.

Preparations are in full swing before the law - aimed at shielding buyers from dishonest practices - takes effect on April 29.

The Transport and Housing Bureau held a workshop yesterday to guide developers on the use of a centralised electronic database to upload sales information.

But there is little sign that developers are fully embracing the change. A check by the South China Morning Post found that most of them had yet to make any changes in brochures for new projects launched this month.

This includes the Urban Renewal Authority. In brochures for Park Ivy, a Tai Kok Tsui project co-developed with Sino Land that is expected to go on sale this week, the developers continue to quote the misleading "gross floor area" to describe flat sizes, even though the new standard saleable area is also included. The elimination of the gross floor area is a highlight of the Residential Properties (First-hand Sales) Ordinance. The term is deemed misleading because developers have for a long time included the property's common areas in the calculation. Saleable area specifically refers to the internal flat space plus balconies.

But a spokesman for the authority said: "The law hasn't come into force yet. We follow the Real Estate Developers Association and the prevailing rules. We have prepared a different version of the brochure to use when the new law comes in."

But Lee Wing-tat, a former lawmaker and member of a steering committee that advised the government on drafting the law, said having two sets of brochures for the same project would create confusion in the market.

As a public organisation, the Urban Renewal Authority should go beyond the role of a private developer and follow the new rules now
Lee Wing-tat

"As a public organisation, the Urban Renewal Authority should go beyond the role of a private developer and follow the new rules now," Lee said. "The new rules will mean the developers have to supply a lot more information. Buyers will be confused if there are discrepancies between the old and new sets of brochures."

Those who buy before the new law comes in would also be disadvantaged because the brochures at present do not have to disclose anything that may "affect the enjoyment" of the property. But from April 29, they will. This could be information such as the windows having to be kept closed to reduce noise pollution.

The authority and Sino Land are not the only developers still using gross floor area. The term also remains in brochures for Henderson Land's Green Code in Fanling, and in Parkes Residence in Jordan, by Chuang's Consortium International. Both projects were put on sale last week.

New sale brochures for these projects will be huge if the three-volume, 1,500-page whopper released by Sun Hung Kai Properties last week for its Riva project in Yuen Long is anything to go by.

Lee suggested developers prepare a summary of key points from their brochures to help buyers find important information.

 

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