Publication of the updated Notes to Purchasers of First-hand Residential Properties
On 1 August 2017, the updated ''Notes to Purchasers of First-hand Residential Properties'' (''Notes'') were published by the Sales of First-hand Residential Authority (''SRPA''). The updated Notes will come into force from 1 November 2017, substituting the previous version published during April 2014. The Notes highlight issues that prospective purchasers should be aware of when considering whether or not to purchase first-hand residential properties.
Changes in the Notes
The SRPA has added the following information to the following sections in the updated Notes:
Section 3 - Price list, payment terms and other financial incentives
Prospective purchasers who are interested in entering into any mortgage loan plans offered by financial institutions specified by the vendor should study the details of the mortgage loan plans as set out in the price list of a development. If prospective purchasers have any questions about the mortgage loan plans, they should check with the concerned financial institutions directly prior to entering into a preliminary agreement for sale and purchase.
Section 4 - Property area and its surroundings
The external and internal dimensions of residential properties as provided in the floor plans in a sales brochure exclude plaster and finishes. Consequently, purchasers should keep this in mind if they decide to buy furniture before the handing over of the residential property.
Section 7 - Information on Availability of Residential Properties for Selection at Sales Office
Section 7 is a new section. Prospective purchasers should check with the vendor which residential properties are available for selection. If a "consumption table" is displayed by the vendor at the sales office, prospective purchasers can check from the table the progress of sale on any given date (e.g. residential properties that are offered for sale at the beginning of that particular day, and which of them have been selected and sold during that day). Making this information available should provide prospective purchasers with added protection from market rumours and speculation.
Section 8 - Register of Transactions
Prospective purchasers are advised to check the Register of Transactions of a development to understand the actual sales condition, and not to take the number of registrations of intent, or cashier orders a vendor has received as an indicator of the sales volume of a development.
Section 15 - Estimated material date and handing over date for uncompleted first-hand uncompleted residential properties and completed residential properties pending compliance
An authorised person who is appointed under the Buildings Ordinance as a coordinator of building works for a development may grant one or more extensions of time for the completion of a development beyond the estimated material date. Consequently, the handing over date of a property may be delayed. Vendors are required under the Residential Properties (First-hand Sales) Ordinance (''RPFO'') to provide affected purchasers with a copy of the relevant certificate of extension. Purchasers should ask the vendor if they have any questions about the handing over date of the property.
Vendor's liability under the RPFO
Section 19(1) of the RPFO states that a sales brochure must advise on the steps that a person should take for his or her own protection before deciding to purchase a residential property. A sales brochure that has incorporated the Notes in full will be considered to have complied with the requirement under section 19(1) of the RPFO.
As a transitional arrangement, either the previous April 2014 version of the Notes or the updated Notes can be incorporated in a sales brochure for the purposes of section 19(1) of the RPFO if the date of printing or the date of examination of a sales brochure falls within the period between 1 August 2017 and 31 October 2017. Vendors must use the updated Notes if the date of printing or the date of examination is on or after 1 November 2017.
Prospective purchasers should study the updated Notes carefully when considering whether or not to purchase first-hand residential properties. As for vendors, they must incorporate the updated Notes in sales brochures from 1 November 2017 onwards to comply with the RPFO.
Click here to see the updated Notes.
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