測量師時代 SURVEYORS TIMES

Issue: 2012.01

The Right Dose?

The government recently proposed to tighten the rules and regulations governing first hand sale of residential properties by legislation. By the time this article is published the consultation period would have ended, but I would still like to share some of my thoughts and observations.

The first and foremost impression given by the proposal is that the Steering Committee (or may be the government) considers developers as the sole culprit of all problems in the market which a tighter rein would eradicate. The image of the government as saviours in shining armour taming greedy developers intent in wringing every cent out of citizens’ pockets do sell well, but if the ultimate goal is to ensure buyers’ best interests, are these draconian regulations the magic cure-all for all problems?

It is easy to establish a misguided impression that first hand sales are particularly problematic as reflected by the number of complaints compared with second hand properties. Putting the sheer volume of transactions in an extremely short time into the equation, we would arrive at a very different conclusion. Second hand properties have their fair share of complaints, only because they are scattered all over town that the problems evade public and media attention.

One should also note that first hand sales contribute to less than 15% of total transaction volume, it would therefore seem extremely puzzling that first hand sales, i.e. developers, is the only problem! Property agents who are involved in almost every transaction in the market would deem to be another sector to look into in ensuring the best performance of the property market.

Proposed exemption arrangement is another area which amplifies problems arising from not regulating the whole market. With these exceptions, some properties would have fallen out of the scope of control, which ultimately may defeat the purpose of the proposed legislation.

The Committee’s efforts in stepping up on banning misleading advertisement are commendable, but would it be the same hand which stifles creativity and artistic expression? Where, how and who to draw a line between “misrepresentation” and “innovative promotion”? The foreseeable and regrettable outcome would either advertisements becoming boring or the number of litigations going through the roof!

The Steering Committee’s report is no doubt detailed --- so much so the requirement may further confuse prospective buyers rather than clearing things up for them. A case in point is the requirements on sales brochures. While it facilitates readers by banning too small a font, would it be going too far by making aerial photos mandatory? Purchasing property is a life affecting decision for a lot of people, and it is unfathomable how a photograph would be sufficient area survey in place of actual site inspection. Instead of cluttering up sales brochure with too much information, wouldn’t it be more meaningful to boil down to the essentials in one to two pages, thus, prospective purchasers know the key issues to consider instead of swamped by too much information?

A lot of our esteemed peers are deeply troubled by the proposed use of saleable area only. While it is understandable that due to no commonly adopted definition of GFA, changing from the current practice in particular of expressing “unit price in GFA” to “unit price in saleable area” would be a clearer way for comparison, a drastic change overnight would likely result in adaptation difficulties and confusion. Furthermore, as violation carries criminal punishments, their worries are not unfounded. It would seem a just and practical solution to extend a grace period, for all parties to get used to such change.

I am in full support of a centralised government on-line platform for disclosure of property information. This would guarantee a fast and accurate source information, and would be convenient as a one-stop destination for the comparing of different developments. But I do have great sympathies for the developers on the requirement that all transaction information must be disclosed within 24 hours of signing of the PASPs. Entering data and double-checking details to ensure accuracy seem not much of a feat --- if there are 10 transactions in one day or even 100 is still manageable. But come 500 or more, which is not uncommon in the first day the new projects hit the market, it would be almost impossible to ensure no mistakes are made, not to mention the extra manpower engaged to this highly intense job. Would it be unacceptable if a little more time be allowed? Given a little longer, it would be reasonable to demand all unusual terms and conditions for any of the transactions be disclosed and highlighted.

On the time limit for prosecution, given the volatility of the property market in Hong Kong, and to avoid abuse of such provisions, the suggested 3 year period from the date of commission of the offense would seem too long. To ensure buyers’ interests are well safeguarded, one year from the date of handing over of the property would be a more reasonable period. After all, the whole purpose of the proposal is to ensure a transparent and better functioning of the property market, and not to penalise the developers.

 

 

 

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