SCMP Tuesday, January 9, 2001
Plan to protect home-buyers gives time for second thoughts on deals
Home-buyers should be given three days to pull out of a property deal, the Law Reform Commission has proposed. The seller could retain up to five per cent of the property price, but could not take any further action.
The Consumer Council welcomed the proposal, saying it would provide better protection to home-buyers, but property agents said it was biased in favour of buyers and would violate the freedom of contract.
Commission member Kennedy Wong Ying-ho said the proposal applied to completed residential flats. He said the aim was to relax the existing provisional sales and purchase agreement.
"Under the current practice, the provisional sales and purchase agreement is so rigid that buyers and sellers are bound to complete the transaction. After the deposit is confiscated, sellers still have a right to make further claims against the buyers under the law.
"Therefore, we believe a cooling-off period is needed, allowing buyers to call off the transactions unilaterally. Such a practice is common in other countries."
The cooling-off period would be three working days.
The commission has also proposed a voluntary form in which sellers of second-hand flats would disclose details including saleable area, management fees, government rent and availability of services. The Estate Agents Ordinance already requires property agents to provide at least seven details about a property, including ownership, total area size, year of completion, use restriction and terms of government lease.
Mr Wong said the seven items should be included in the new form to hold sellers responsible for providing accurate information. But completion of the form will be voluntary.
The commission has also proposed a centralised property information system to provide buyers with a one-stop service for housing information.
Mr Wong said buying a home was a "major decision" and there was not enough protection for home-buyers. The new measures could minimise misunderstandings and bring down the number of legal disputes over property transactions, he said. Public consultation on the proposals ends on March 31.
Society of Hong Kong Real Estate Agents president Alex Tang Yee-man said the cooling-off period should be decided by both sides rather than the Government. "It would be unfair to sellers because the right to withdraw only lies with buyers. We believe in freedom of contract," he said.
Mr Tang said a voluntary information form might be impractical, because many flat owners were reluctant to disclose information.