Developer takes hit over $69m duplex roof dud

Top News | Stella Wong 10 Jan 2019

A Henderson Land subsidiary lost a lengthy court battle yesterday and was ordered to refund more than HK$69 million to a flat buyer after misrepresenting that the property included a much larger part of the roof which was actually part of the common area.

The High Court ordered Bright Gold to make the refund within 14 days, and the owner to return the flat to the developer.

In addition, the court ruled that the estate agent in the sale - Centaline Property Agency - should pay HK$100 to the buyer for breaching its duty of care. Both Bright Gold and Centaline are jointly required to pay legal costs.

The long legal dispute started after the flat sale in August 2011, when Bright Gold, the developer of Hill Paramount in Sha Tin, sold duplex flat B on the 32nd and 33rd floors of Block 1 to Mega Well Development for HK$69.8 million.

After purchaser Katherine Cheng, who bought the duplex under her company's name, took possession of the property, it was discovered that the roof plan annexed to the formal agreement erroneously included the roof area of another duplex flat on the 31st and 32nd floors.

Bright Gold then sought relief from the court against Mega Well for rectification of the wrong roof plan attached to the formal agreement.

On its counter-claim, Mega Well sought relief against Centaline and Bright Gold over their misrepresentations that the property's roof area included a much larger area of about 486 square feet, which was actually part of the common area and fire refuge of the building.

The sales brochure stated that duplex B had an extra roof area of 199 sq ft. The area actually only consists of a narrow strip of the roof area of about 25 sq ft, and an "unusable" area with outdoor units of air-conditioners and boilers.

Judge of the Court of First Instance Anthony Chan Kin-keung believes that Cheng would not have been interested in duplex B if she knew that it had no usable roof.

Cheng was looking for a property with outdoor space that was sufficiently large for a barbecue party and entertaining guests, Chan said.

However, the estate agents from Centaline had repeatedly misrepresented that the property included the common area in various viewings.

A Henderson Land spokesman told The Standard that the company was still studying the judgment and has not decided whether to appeal.

The HK$69.8 million refund means the average price per sq ft of the salable area of the 3,327 sq ft apartment is HK$20,979.

Although no previous sale of a similar apartment can be used as a reference of the current market price, Centadata said the latest transaction at Hill Paramount in July involved a 3,485 sq ft apartment priced at HK$63 million, or HK$18,077 per sq ft - lower than the HK$20,979 the developer has to refund.

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