Tender sales of new flats may have violated law, probe findsTop News | Charlotte Luo 11 Apr 2019
Sales of some new apartments under a tender scheme could breach regulations, according to an investigation by the Sales of First-hand Residential Properties Authority.
Secretary for Transport and Housing Frank Chan Fan said he was aware of the recent trend of selling flats by tender and its lack of transparency.
At a meeting of the Legislative Council's Finance Committee yesterday, Chan said the authority had already begun to investigate. "The practice is not ideal," he said.
He added it could breach the Residential Properties (First-hand Sales) Ordinance and that the Residential Properties Authority was investigating.
Apart from enforcement in individual cases, Chan said, the authority reminded the industry that sellers are required to list details of the payment in the register of transactions to enhance the transparency of the transaction details so that buyers could clearly grasp the market conditions.
The Estate Agents Authority will conduct an investigation and issue a letter to the estate agents to remind them to strictly follow the relevant ordinance and the guidelines when they participate in the projects through tenders.
The government will continue to monitor the sale of first-hand flats by tender to ensure the transparency of such transactions.
The Real Estate Developers Association last week said its members -- about 90 percent of the city's developers -- will sell 20 percent of "non-luxury" housing estate flats in new projects on the open market.
However, the decision was criticized by some lawmakers as the remaining 80 percent can still be sold through tender.
About 30 percent of 5,500 new flats were sold through tender in the first quarter, according to records from the Residential Properties Authority.
Developers are required to release a price list for first-hand residential property at least three days before the official sale date to allow buyers to study the details of the project, but it does not apply to flats sold through tender, which go to the highest bidders.
However, other provisions of the ordinance still apply, including the requirements on sales brochures, sales arrangements and register of transactions.
Sellers must set out the transaction prices and terms of payment in the register of transactions in relation to the properties sold by way of tender.
Vendors also need set out details of tender in the documents containing information on sales arrangements.
They should provide hard copies of the document containing information on the sales arrangements at least three days before the first day of the tender period and throughout the tender period.
Hong Kong property prices rose 1.6 percent in the first two months of this year.