SRPA's response to Consumer Council's study
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     The Sales of First-hand Residential Properties Authority (SRPA) today (November 11) said that it would go through carefully the findings and recommendations of the study conducted by the Consumer Council (CC) on the sales of first-hand residential properties.

     According to the survey result of the CC, about 80 per cent of the respondents are aware of the Residential Properties (First-hand Sales) Ordinance (the Ordinance).  The SRPA will continue to step up publicity and public education on the Ordinance, the functions of the SRPA and the Sales of First-hand Residential Properties Electronic Platform (SRPE), a spokesman for the SRPA said.

     The Ordinance is the result of the one year discussion by the Steering Committee on the Regulation of the Sale of First-hand Residential Properties set up by the Transport and Housing Bureau, the public consultation exercise which lasted for two months, and the thorough discussion by the Legislative Council. The CC, the trade and relevant stakeholders have actively participated in the discussion.  The Ordinance has considerably enhanced the transparency and fairness in the sales of first-hand residential properties, strengthened consumer protection, and provided a level playing field for vendors, the spokesman said.

     On the CC's recommendations of providing a longer "cooling-off period" for purchasers to sign the agreement for sale and purchase (ASP) after signing the preliminary agreement for sale and purchase (PASP), lowering the forfeiture amount which applies when purchasers do not proceed to sign the ASP, and requiring vendors to offer to sell all of the first-hand residential properties the prices of which are set out in the price list(s), the spokesman said that those issues and similar suggestions had been deliberated fully in the legislative process.

     The Ordinance stipulates that if a purchaser does not proceed to sign the ASP within five working days after signing the PASP, the PASP is terminated and the preliminary deposit amounting to five per cent of the purchase price of the property will be forfeited.  This takes into account the particular characteristics of the residential property in Hong Kong, including the volatility of the market and the exuberance of speculative activities, as well as the financial loss which a purchaser in the mass market will suffer for not being able to complete a transaction.  Before the Ordinance has come into operation, when a purchaser of a first-hand residential property did not proceed to sign the ASP within three working days after signing the PASP, normally an amount equivalent to 10 per cent of the purchase price of the property would be forfeited.

     The Ordinance does not make it a mandatory requirement for a vendor to offer to sell all of the first-hand residential properties the prices of which are set out in the price list(s) as soon as possible after the vendor has made available the price list(s).  The Ordinance has struck a balance between enhancing the transparency and fairness in the sales of first-hand residential properties, and providing vendors with the flexibility in making business decisions and disposing of their properties lawfully.

     As at November 10, the SRPA has examined about 630 sales brochures (including the revised sales brochures), about 1 400 price lists, about 800 documents containing the sales arrangements, and about 4 700 printed advertisements.  Also, the SRPA has conducted 1 900 inspections on the registers of transactions, and 5 000 inspections on the vendors' designated websites.  The SRPA has conducted about 1 600 inspections on the sales offices and show flats, and some of them were conducted jointly with the Estate Agents Authority.

     The SRPA accords importance on whether the sales arrangements deployed by vendors are consistent with the principles of fairness and transparency.  For sales arrangements which may possibly cause disorders and affect purchaser's interest, the SRPA has advised the vendors to enhance the arrangements.  Also, the SRPA has issued guidelines to the trade.

     When there are situations of suspected contravention of the Ordinance and if the nature of the suspected contravention will likely seriously affect prospective purchasers' interest, the SRPA will, while carrying out investigation, alert prospective purchasers of the situations through various media channels in the first instance.

     The SRPA has all along been paying attention to the inflation of the number of registrations of intent in the sales of first-hand residential properties.  The SRPA has been reminding prospective purchasers that the register of transactions of a development is the most reliable source of information which members of the public may get to know about the sales situation of the development.  Also, it has been reminding prospective purchasers to be cautious in making reference to hearsay information from vendors or the market regarding the number of registrations of intent received before the date of sale and not to take the figures as an indicator of the sales volume of the development.

     Under the Ordinance, any material which purports to promote the sale of first-hand residential properties has to comply with the requirements on advertisements as set out in the Ordinance. Promotional materials distributed by vendors and/or estate agents will have to comply with those requirements on advertisements.  The Ordinance stipulates that advertisements must not contain false or misleading information.  Also, it is an offence under the Ordinance for any person to make misrepresentation, or disseminate false or misleading information, in the sale of first-hand residential properties.  The maximum penalty is a fine of $5 million and imprisonment for seven years.

     The SRPA spares no effort in implementing the Ordinance and carrying out investigations against persons suspected of having contravened the Ordinance.  It takes time to carry out investigations and collect evidences.  The SRPA has been referring cases of suspected contravention of the Ordinance upon completion of the investigations to the Prosecutions Division of the Department of Justice for consideration.    

     On public education, the SRPA published the "Notes to Purchasers of First-hand Residential Properties" to remind prospective purchasers of the issues they should pay particular attention to purchasing first-hand residential properties.  Also, the SRPA published a leaflet to set out in layman terms the major requirements of the Ordinance on vendors.  There are frequently asked questions and answers in the SRPA's website.  Announcements of Public Interest (API) on the implementation of the Ordinance are broadcast on TV and radio channels, and in various other media channels.  The SRPA launched a new API in August this year to remind prospective purchasers to think carefully before signing a PASP, for broadcast in TV and radio channels.  

     The SRPE is a one stop platform for members of the public to browse the sales brochures, price lists and register of transactions of individual developments.  There is on average about 900 visits to the SRPE per day since the SRPE has come into operation.

     The SRPA has set up a hotline to handle public enquiries and complaints.  Prospective purchasers who are in need of assistance are welcome to call the hotline, or contact the SRPA by emails or fax.

Ends/Tuesday, November 11, 2014
Issued at HKT 20:11

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