2024-05-17 28Hse Editor
The Residential Properties (First-hand Sales) Ordinance, which has been in force since 29 April 2013 to regulate the sale of new properties, has been implemented for 10 years. But for the first time, a property agent has been convicted and sentenced to imprisonment, shocking the local real estate industry.
The agent was convicted of contravening section 78 of the Ordinance for disseminating false or misleading information that was likely to induce another person to purchase a specified residential property on 6 and 8 December 2019 respectively. Imprisoned immediately, the agent was sentenced to two months' imprisonment on each of the two charges, to be served concurrently.
It is understood that the new property in question was The Grand Marine in Tsing Yi, developed by Grand Ming Group, which was launched in the fourth quarter of 2019. The first round of sale involved 375 units, which were all sold out within 11 hours of sales commencement, and the misleading information was related to the property's floor plans.
Based on the limited information available, it is unclear how the agent misled the buyers. According to the information, floor height refers to the height distance between floors, which is the height distance between the concrete floor of the floor and the concrete floor of the previous floor, including the thickness of the floor slab, so it is not the same as the actual floor height of the flat.
As at the end of last year, the SRPA had taken out 147 prosecutions involving 14 new flats. Among them, 145 charges were against developers and all were fined. The remaining two charges, the present case, were against estate agents and the charges were punishable by imprisonment.
The Residential Properties (First-hand Sales) Ordinance was introduced to strengthen the transparency of first-hand residential property sales, to enhance consumer protection, and to provide fair competition for first-hand residential property vendors. What should buyers be aware of in order to avoid fraud?
The most important point: buyers should read sales documents carefully instead of relying on marketing materials. To make it easier for buyers to access property information, some agents will consolidate and produce their own promotional materials, which include flat descriptions, price lists, and flat orientation.
However, some agents will use exaggerated wording to promote their properties in order to sell. They might even provide false or misleading information. For example, if a flat is a one-bedroom flat with a storage room, they may introduce it to buyers as a two-bedroom flat in order to attract buyers.
In addition, the price is also very misleading. For instance, new flats are only entitled to 10 per cent discount when using a certain payment method. But an agent who touts the 10 per cent discount for the sale of the unit will mislead buyers into thinking that all flats are entitled to a 10 per cent discount. Such advertisements or promotional materials may disseminate false and misrepresented information.
To reduce the risk of property fraud, it is always best to check the brochures and price lists provided by developers. Under the Residential Properties (First-hand Sales) Ordinance, developers are required to upload their sales brochures onto their websites at least seven days before the commencement of sale, and to announce the price list and sales arrangements at least three days before the sale of the flats.
Although the sales information provided by the developer is complex and cannot be understood at a glance, these details will enable buyers to have a clear understanding of the property in advance, such as location convenience, to decide whether to purchase a new home.
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