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Hong Kong Law Reform Commission |
DESCRIPTION OF FLATS
ON SALE SUB-COMMITTEE
CONSULTATION PAPER
LOCAL COMPLETED RESIDENTIAL PROPERTIES:
SALES DESCRIPTIONS AND
PRE-CONTRACTUAL MATTERS
This consultation paper can be found
on the Internet at:
<http://www.info.gov.hk/hkreform>.
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was principally responsible for the writing of this consultation paper. |
Page |
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|---|---|
| Preface | 1 |
| Terms of reference |
1
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| The Sub-committee |
1
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| Sub-committee membership |
2
|
| Meetings |
3
|
| Consultative document |
3
|
| 1. The case
for the reference and the scope of
deliberations |
4
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| The case for the additional
reference for local completed
residential properties |
4
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| Scope of deliberations |
5
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| Views against regulating the second-hand market |
5
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| Views in favour of regulating the second-hand market |
6
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| Definition of "completed residential property" |
6
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| Part I – Second-hand Market | |
| 2. The general approach to the second-hand market |
8
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| Completed residential units in the second-hand market |
8
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| Lack of sales brochure |
8
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| 3. Brief
review of the existing law governing the
protection of purchasers of completed units in the second-hand market |
9
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| Introduction |
9
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| Misrepresentation |
9
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| Breach of contract |
10
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| Fraudulent behaviour |
10
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| Obtaining property or pecuniary advantage by deception |
11
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| Conspiracy to defraud |
11
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| Substantive offence of fraud |
12
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| Trade Descriptions Ordinance (Cap 362) |
12
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| Existing disclosure requirements
under the Estate Agents
Ordinance (Cap 511) |
13
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| Lack of vendor's duties of disclosure |
13
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| 4. Disclosure of information by vendors |
15
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| Existing law provides insufficient
protection for purchasers of
second-hand units |
15
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| The Vendor's Information Form |
15
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| The advantages of a VIF |
18
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| The disadvantages of a VIF |
19
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| The seven property particulars
under the Estate Agents
Ordinance |
19
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| Contents of VIF |
20
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| Sundry items |
24
|
| Should the Vendor Information
Form be voluntary or
compulsory? |
24
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| Centralised property information system |
27
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| 5. Standard clauses of preliminary agreements |
28
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| Introduction |
28
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| Standard clauses for protection of homebuyers |
28
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| Cooling-off period |
29
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| Contract subject to finance |
31
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| Survey report |
33
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| Right of inspection |
35
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| How should a standard clause
be inserted into
the preliminary agreement? |
35
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| 6. Summary
of recommendations on completed units
sold in the second-hand market |
37
|
| Part II – First-hand Market | |
| 7. The general
approach to the first-hand market and
the provision of sales brochures |
40
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| Meaning of completed properties in the first-hand market |
40
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| The general approach to the first-hand market |
41
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| Availability of sales brochures to be mandatory |
41
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| Advertisements other than sales brochures |
43
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| 8. Methods
of measurement of floor area to be used
by developers |
45
|
| Introduction |
45
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| Saleable area?????? |
45
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| Gross floor area?????? |
47
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| Quoting of lowest price |
48
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| 9. Disclosure
requirements for completed units offered
for sale by developers |
49
|
| Introduction |
49
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| Floor Plan |
49
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| Fittings and Finishes |
51
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| Location and layout plans |
54
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| Misleading artistic impressions |
57
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| Management of clubhouse and communal facilities |
57
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| Date of completion |
58
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| Sub-sale by original purchaser to sub-purchaser |
59
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| 10. Disclosure
requirements for completed units offered
for sale by developers (continued) |
61
|
| Introduction |
61
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| Financing arrangements |
61
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| Interest chargeable for late payment of purchase price |
62
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| Change in market condition and bank lending policy |
62
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| Cooling-off period |
63
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| Preliminary agreement for sale and purchase |
63
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| Right of inspection prior to signing of preliminary agreement |
64
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| Defect liability period |
65
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| Deed of Mutual Covenant |
67
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| Conditions of the Government lease |
70
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| Prices and number of units for sale |
73
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| Miscellaneous matters |
73
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| Enforcement of the recommendations |
75
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| 11. Summary
of recommendations on completed units
offered for sale by developers |
77
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| 12. The importance of public education |
86
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| Glossary of terms |
87
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| Annex I
Legal Advisory Conveyancing Office Circular
Memorandum No 40 |
92
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| Annex II
Legal Information Form under "TransAction 2000"
(the Law Society of England and Wales) |
103
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| Annex III
Seller Property Information Statement (the Ontario
Real Estate Association) |
108
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|
This Consultation Paper has been prepared by the Description of Flats on Sale sub-committee of the Law Reform Commission. It does not represent the final views of either the sub-committee or the Law Reform Commission, and is circulated for comment and criticism only. |
| The sub-committee
would be grateful for comments on this Consultation Paper by 31 March 2001.
All correspondence should be addressed to:
|
| The Secretary
The Description of Flats on Sale sub-committee The Law Reform Commission 20th Floor, Harcourt House 39 Gloucester Road Wanchai Hong Kong Telephone: (852) 2528 0472 Fax: (852) 2865 2902 E-mail: hklrc@hkreform.gcn.gov.hk
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| It may be
helpful for the Commission and the sub-committee, either in discussion
with others or in any subsequent report, to be able to refer to and attribute
comments submitted in response to this Consultation Paper. Any request
to treat all or part of a response in confidence will, of course, be respected,
but if no such request is made, the Commission will assume that the response
is not intended to be confidential.
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| Anyone who responds to this consultation paper will be acknowledged by name in the subsequent report. If an acknowledgement is not desired, please indicate so in your response. |