SRPA releases updated "Notes to Purchasers of First-hand Residential Properties" and reminds prospective purchasers to study payment terms and registers of transactions
******************************************************************************************
The SRPA also reminded prospective purchasers that purchases of first-hand residential properties entail huge expenses, and called on them to look into details of payment terms and mortgage plans and take into account affordability before purchases to make suitable arrangements. Prospective purchasers should also read the register of transactions of the first-hand residential development concerned to learn about the sales conditions of the development and transaction information of every residential property.
The Residential Properties (First-hand Sales) Ordinance requires vendors of first-hand residential properties to make available the price list at least three days immediately before the date of sale. A price list sets out information including the prices of properties; terms of payment; discounts on prices, gifts, financial advantages or benefits to be made available in connection with the purchase of the residential properties; and the party liable to pay the solicitor's fees and stamp duty.
When studying price lists, prospective purchasers should pay attention to whether there are any conditions attached to the discounts offered by vendors and details of various payment plans. If they intend to opt for any of the mortgage loan plans offered by financial institutions specified by the vendor, they should study details of the plans such as the requirements for mortgagors on minimum income level, the loan limit under the first mortgage and second mortgage, the maximum loan repayment period, the change of mortgage interest rate throughout the entire repayment period, and the payment of administrative fees.
Vendors must, throughout the sales period, make available the registers on the designated websites of developments, sales offices and the Sales of First-hand Residential Properties Electronic Platform (www.srpe.gov.hk). A vendor must, within 24 hours after entering into a preliminary agreement for sale and purchase (PASP) with a purchaser, enter transaction information of the PASP in the register and within one working day after entering into an agreement for sale and purchase (ASP) enter transaction information of the ASP in the register. Prospective purchasers can learn about the sales conditions of the development from the register.
The Ordinance stipulates that a register must set out information required by the Ordinance, which includes the transaction price under the PASP or the ASP, and the terms of payment (including any discount on the price, and any gift (such as furniture and chattels) or financial advantage or benefit, made available in connection with the purchase).
"The transaction prices which prospective purchasers found on the registers are the prices under the PASP or the ASP of the properties concerned. That means the transaction prices have factored in discounts on prices. As for gifts, financial advantages or benefits, since they may not be applicable to every purchaser (such as the right to purchase a car parking space at a specified discount) or they are offered only upon satisfying certain conditions after signing of the ASP (such as stamp duty rebate), these gifts, financial advantages or benefits will not be factored into the transaction prices. Notwithstanding, the vendor is required to set out the gifts, financial advantages or benefits in the 'Terms of Payment' column in the register to enhance the transparency of every transaction. Even for the sale of a residential property by way of auction or tender, though the vendor is not required to make available a price list, it is required to set out the above-mentioned information in the register," the SRPA spokesman said.
The SRPA spokesman emphasised, "The purchase of first-hand residential properties is a significant issue to the majority of people. Prospective purchasers must assess affordability when deliberating on which terms of payment and mortgage plans they will opt for. They should take note that they may not be able to obtain every single discount or the gift, financial advantage or benefit in connection with the purchase offered by the vendor. They should never enter into a PASP rashly if they are uncertain whether their application for certain mortgage loan plans will be approved."
The spokesman added, "As stipulated in the Ordinance, if a purchaser does not execute the ASP within five working days after entering into the PASP, the PASP is terminated. The preliminary deposit at 5 per cent of the purchase price will be forfeited."
Ends/Tuesday, August 1, 2017
Issued at HKT 17:18
Issued at HKT 17:18
NNNN