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Weekly Updates2. Before the appointment of an estate agent to look for a property:
--find out whether the estate agent will act on your behalf only, if the agent also acts for the developer, he may not be able to protect your interests in the event of a conflict,
--find out whether any commission is payable to the agent and the amount,
--note that only licensed estate agents or salespersons may accept your appointment. If in doubt, call the Estate Agents Authority on 3102 0838 to make enquiries,
- note that some developers handle sales themselves and you can decide whether to appoint an estate agent.
3. Before the purchase of an uncompleted flat:
--seek confirmation from the developer whether a 'Consent to Sell' has been issued,
--note that the developer and estate agent are not allowed to receive any deposit or 'reservation fee' before the developer has obtained the "Consent to Sell',
--the deposit should be made payable to the stakeholder solicitor of the development,
--understand that your deposit of up to 5% of the property price may be forfeited if you withdraw from the Provisional Agreement for Sale and Purchase.
4. Before engaging a solicitor:
--consider engaging your own solicitor to protect your interests, if the solicitor also acts for the developer, he may not be able to protect your interests in the event of a conflict,
--compare the charges of different solicitors.
REFERENCES
AbanaReview (2004) Real Estate Investment in the Middle East, AbanaReview, Fall, 2004.
Apple Daily (2006) Presale of properties, Apple Daily, 14-15 and 17 August 2006.
Braxtan, C. (2006) The Seattle Real Estate Blog, http://braxtanre.blogspot.com, 23 August 2006.
Buang, S. (2006) Housing heartaches, Property, Malaysia, 26 April 2006.
Chau, K. W., Wong, S. K. and Yiu, C. Y (2003) Price discovery function of forward contracts in the real estate market: An empirical test. Journal of Financial Management of Property and Construction, 8(3), p. 129-137.
CM (2002a) Lands Department Consent Scheme: Saleable area for utility platforms, Circular Memorandum No. 47, Legal Advisory and Conveyancing Office, 9 August 2002.
CM (2002b) Lands Department Consent Scheme: Advertising of units, requirement for 30% investment, variations to the standard form of agreement for sale and purchases, Circular Memorandum No. 48, Legal Advisory and Conveyancing Office, 22 August 2002.
CM (2002c) Lands Department Consent Scheme: Sale of Units in Uncompleted Private Residential Developments, Circular Memorandum No. 40D, Legal Advisory and Conveyancing Office, 3 December 2002.
CM (2001a) Lands Department Consent Scheme: Further relaxation of certain consent measures for private residential developments, Circular Memorandum No. 40B, Legal Advisory and Conveyancing Office, 20 February 2001.
CM (2001b) Lands Department Consent Scheme: Sale of units in uncompleted private residential developments, Circular Memorandum No. 40C, Legal Advisory and Conveyancing Office, 10 December 2001.
CM (1999) Lands Department Consent Scheme: Sale of units in uncompleted private residential developments, Circular Memorandum No. 40, Legal Advisory and Conveyancing Office, 28 May 1999.
Cullum, P. (2005) Consumers and Regulation, National Consumer Council, U.K.
ECE (2002) Country Profiles on the Housing Sector--Republic of Moldova, Economic Commission for Europe, Geneva, 2002.
Esha, Z. (2003) Build then sell, is it practical to implements it in Malaysia? In Proceedings, The CIB Student Chapters International Symposium 2003, The Hong Kong Polytechnic University.
Farrell, L. M. (2003) Principal-agency risk in project finance. International Journal of Project Management, 21, p. 547-561.
Gardner, R. (2003) Games for Business and Economics, Leyh Publishing LLC.
HKSAR (2005) Operation of the sale mechanism of uncompleted residential units--Legislative Council Questions LCQ (LCQ9), Press Release, 18 May 2005.
Gwin, C. R. and Ong, S. E. (2000) Homeowner warranties and building codes. Journal of Property Investment and Finance, 18(4), p. 456-472.
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LC Paper (2003) Presale of Residential Flats and the Consent Scheme, LC Paper No. CB(1)1943/ 02-03(01), Panel on Planning, Lands and Works and Panel on Housing, Legislative Council.
LC Paper (2002) Law Reform Commission of Hong Kong--Report on local completed residential properties, LC Paper No. CB(1)591/02-03(04), Panel on Housing, Legislative Council.
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(1) A presale is different from a custom sale of an uncompleted property. In a custom sale, the buyer owns the land and hires the builder to build the property. In a presale, the builder owns the land, obtains the construction finance, builds the house and then conveys the completed property to the buyer (Tribune, 2005).
(2) Following is a progress payment schedule of a 30-floor condo presold in Dubai (Homesgofast, 2006):
- Deposit (within 7 days of purchase) : 10%
- 1St instalment (within 30 days) : 10%
- 2nd instalment (within 90 days) : 10%
- 3rd instalment (Podium ready) : 10%
- 4th instalment (10th Floor ready) : 10%
- 5th instalment (20th floor ready) : 15%
- 6th instalment (structure ready) : 15%
- 7th instalment (handover) :20%
(3) The builder/developer is required to obtain an insurance policy, or a 'termination' guarantee, to protect the construction works in the event that he goes bust before completing the property (Justlanded, 2006).
(4) The Consent Scheme can be applied only to developments under government lease of which the government has been given the control over the development. For those redeveloped land of which no such consent is required in the lease, the Law Society has issued a statutory declaration form and a standard form of Agreement for Sale and Purchase with the mandatory clauses similar to those that are used for the Consent Scheme for use of redevelopment projects, know as Non-consent Scheme.
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