ST : HK clamps down on misleading show-flats

20 Feb 2011,
HK clamps down on misleading show-flats

It is tightening rules to ensure features on display are replicated in actual apartments
By Diego Laje & Eudora Wong

Hong Kong: Like Singapore, Hong Kong is clamping down on property developers and agents who mislead buyers by presenting show-flats that do not accurately reflect the real thing.

It is looking at tightening existing rules to make sure features seen in show-flats, which developers build to attract buyers before a residential project is completed, are replicated in the actual homes.

It hopes that this could help prevent unscrupulous developers from putting in fancy bay windows that do not appear in the actual flats, for instance, or removing boundary walls to make certain rooms in the show-flats look bigger.

Both Hong Kong and Singapore, where property prices are perennially on the rise, are grappling with this problem.

In Singapore, the Government is looking at introducing new rules to ensure buyers are not misled by interior design work that appears in show-flats but not in the actual homes.

Among other things, the rules could stop developers from removing structural walls and columns and raising ceilings to make the flats look bigger, and ensure they show accurately the presence of bomb shelters.

Hong Kong already has such laws, but home buyers say they still see instances of inaccurate advertising.

Ms Wong Soo Lai, 52, a civil servant, recalls checking out a condominium in Sai Kung district in 2009.

The developer had used expensive materials and decorated the show-flats attractively, she told The Sunday Times, but the experienced investor knew what to look out for.

'Developers put part of the bed in the bay window area deliberately to free up more space in the room,' she said. 'And I think they put in smaller pieces of furniture to make the place seem bigger.'

So the cautious buyer waited until the property was actually built, and went to check out the real thing. The ceilings in the actual flats looked lower, she said.

Last year, new measures were added to the Estate Agents Ordinance, which empowers the Estate Agents Authority to handle cases of unlawful practices, after buyers complained about show-flats made to look bigger or nicer than the real thing.

In some of those show-flats, structural partitions that the actual flats would have were moved aside to present a larger-looking space. In others, common areas such as clubhouses and facilities were factored into the flat area in promotional brochures.

The new rules, which apply to first-hand flats, state that show units must be of actual size and contain the same partitioning, fittings and finishes as the actual ones.

The area and dimensions of the actual flats must also be the same as those given in the promotional material, and prospective buyers must be allowed to take their own measurements.

Real estate agents who flout the rules can have their licences suspended or revoked, or be subject to lawsuits.

The strict rules, however, have not stopped some developers from taking liberties with their show-flats, hence prompting the latest moves to beef up the law.

According to the chief publicity manager of the Transport and Housing Bureau, Mr Leo Law, the bureau has set up a committee to look into 'specific issues' on the regulation of the sale of first-hand flats.

So far, the committee has come up with some recommendations, including making specific provisions relating to accurate boundary walls and features like bay windows. It is due to complete its final report in October, said the bureau.

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