Property developers' staff and directors can face up to seven years' jail for providing false information to potential flat buyers, under legislation proposed by a government steering committee yesterday. The stiff penalty is among several measures that have been proposed by the 13-member committee drawing up a list of reforms for the property market. Lee Wing-tat, one of the committee's members, said the proposed law's most serious penalty of seven year's imprisonment could apply to anyone at a developer's firm, whether a director, a salesperson or even a secretary, if they were found to have given false or misleading information, verbally or in writing, to boost sales or prices. 'The top management of a developer has never before been held criminally liable for any mistake or wrongdoing in flat sales. At most they faced only civil claims. This, to some degree, had led to their staff telling buyers things that may not have been accurate,' Lee said. As an example of the proposed new law, he said, 'a developer will commit an offence if he says an overseas merchant has bought its luxury flats at a sky-high price and if he fails to substantiate his claim. This is to prevent someone from trying to boost up prices. 'I believe the [threat of jail] will alert developers to mind their words when promoting or selling flats,' said Lee, who is also chairman of Legislative Council's housing panel. An enforcement arm will be established under the Transport and Housing Bureau to implement the new law. At least some of the recommendations are likely to meet objections from the Real Estate Developers Association (Reda), which will express its view on the proposed legislation at a media briefing today. The committee, which has been working for almost a year on a law to regulate the sale of new flats, met for the last time yesterday. As a reference the committee followed provisions in the Securities and Futures Ordinance, which recommends a maximum penalty of seven years' jail and a HK$1 million fine for the provision of false information in selling investment products. Government lawyers will now draft a bill based on the committee's proposal, which will be released for public consultation and then lawmakers' scrutiny after Chief Executive Donald Tsang Yam-kuen's policy address next month. At present there has been no specific law regulating the sale of new flats. The Lands Department runs a scheme that can forbid developers in breach of its provisions from selling property, but this sanction has never been enforced. Property sales have come under scrutiny in recent years, particularly since the controversial sale of Henderson Land's apartments at 39 Conduit Road. Police have been investigating the collapse of 20 sales in the development, including one reportedly sold for a record-breaking price of HK$88,000 per square foot.