Provisional Legislative Council
Panel on Housing

Sales Descriptions of Overseas Uncompleted Residential Properties


The Law Reform Commission (LRC) issued on 25 September 1997 a report on Sales Descriptions of Overseas Uncompleted Residential Properties, which deals with the provision of sales literature for overseas uncompleted residential flats put on sale in Hong Kong.

Key Recommendations of the Report

2.The main recommendations of the Report are that legislation should be introduced to require -

  1. all vendors of overseas uncompleted residential properties to engage licensed estate agents for the sale of such properties in Hong Kong; and

  2. the licensed estate agents handling such sales to provide prospective purchasers with some basic sales information in sales brochures.

3.The proposed legislation will require that sales brochure should include clear and accurate descriptions of the following -

  1. saleable floor area

  2. fittings and finishes

  3. types of water, sewage and drainage systems

  4. electricity and fuel supply

  5. estimated connection costs to utilities

  6. responsibility for legal costs, stamp duty and other transaction fees and commission payable

  7. itemised list of supplementary charges upon taking possession of the property

  8. warning on exchange controls and purchasers' liability for any tax arising from the purchase of the property

  9. estimated date of completion

  10. financing and mortgage arrangements

  11. prices of all units put up for sale

  12. mechanisms for protecting purchasers' deposits and instalments in the event of project delay or failure if any

  13. restrictions on sale to foreigners if any

  14. tenure of the property and the nature as well as duration of the interests that purchasers will take in the property

  15. defect liability period

  16. restrictions on the use of access or rights of way to the property

  17. Gifts and benefits if any

4.The LRC also recommended that sales brochure must contain a map or a location plan which is accurate, drawn to scale and shows the orientation and that the standard of fittings and finishes in any mock-up flats must be consistent with that stated in the sales brochure and that of the actual properties. Any statements about the travelling time, travel distance and ground distance should be factual and not misleading.

5.As regards enforcement, the Report recommended that estate agents will be liable for breaches relating to false or misleading information only if the breach is committed intentionally or recklessly. The usual form of statutory sanctions of imprisonment and fines is proposed, in addition to suspension or revocation of licences. Imprisonment will be available as a penalty only where fines are not considered to be adequate.

Way Forward

6.We welcome the publication of the LRC's Report and support the spirit of the Report to improve the accuracy and reliability of sales information on uncompleted residential flats for sale in Hong Kong. This is particularly important for flats located overseas where the prospective purchaser usually cannot personally carry out an inspection of the flat or the development.

7.We are consulting relevant parties on the LRC's recommendations, including estate agents, property developers, professional bodies and the Consumer Council. The consultation period will end on 1 December 1997. We will study carefully the LRC's recommendations and the comments received before formulating our views on the subject. We do not have a legislative time-table at this stage.

Housing Bureau
Government Secretariat
November 1997