Despite being in force for three years, the
Residential Properties (First-hand Sales) Ordinance has led to just a single
prosecution case
The Residential Properties (First-hand Sales) Ordinance has racked up only one prosecution case since it came into force three years ago, but the relevant authority has still hailed it as a success in tackling unscrupulous sales practices by property developers.
The single case was a stark contrast to the 177 complaints the Sales of First-hand Residential Properties Authority received over suspected breaches of the ordinance, as well as 4,000 enquiries made as of March.
On Friday, authority director Eugene Fung Kin-yip said of the 177 complaints, investigations are still ongoing for 18 cases. But he stressed the watchdog does not rely solely on complaints to identify dodgy sales practices, as inspectors also actively carry out compliance checks on all first-hand residential developments.
Asked how many cases were actually forwarded to the Department of Justice’s Prosecutions Division for follow-up action, Fung said he was not at liberty to disclose the numbers.
Answering the Post’s inquiry, the Department of Justice said it has not compiled such data.
Democratic Party legislator James To Kun-sun, who was involved in drafting the ordinance, said it was “improper” and “wrong in principle” that the authority refused to disclose such statistics, as they are an important indicator to gauge the body’s performance. He also agreed there is a need to review the ordinance’s effectiveness.
The authority has been labelled a “toothless tiger” for only issuing verbal warnings instead of aiming for prosecution. Fung dismissed the suggestion, arguing the watchdog will continue to pursue cases even if remedial measures are taken by the vendor.
The lone case of prosecution involved the sale of 10 units at Full Art Court, a residential block in Sham Shui Po, in February 2014. The responsible developer, a subsidiary of Chinese condiment manufacturer Tung Chun Group, allegedly sold flats without publishing sales brochures or price lists, both of which are requirements under the ordinance. The company will answer to 19 charges at a court hearing in June.
Fung was also asked about New World Development’s move to include the lift lobby into the saleable floor area – by renaming it to “foyer” – during its sale of units at the Pavilia Hill in Tin Hau. He said whether the practice is appropriate or not depends on a number of factors, including the project’s deed of covenant. If it is specified in the deed that the lobby is a part of the unit, he added, then there is no problem with the tactic.
The authority emphasised that while the ordinance only offers a legal framework for the industry to follow, those in the trade must also take the initiative to improve transparency. A few suggestions included assisting prospective flat buyers in choosing the right finance arrangements, simplifying information on the price list and making the sales brochure less bulky.
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