Regulation of sales descriptions and information disclosure in off-plan sales in Hong Kong

Abstract

The thesis offers key insights and practical solutions for exploring and addressing information asymmetry and property misdescription issues in off-plan sales in Hong Kong. It gives a lively account of the latest development of the regulatory regime, including the Steering Committee’s Report on Regulation of Sale of First-hand Residential Properties by Legislation in October 2011, the publication of the first draft of the Residential Properties (First-hand Sales) Bill in November 2011, and the enactment of the Residential Properties (First-hand Sales) Ordinance in July 2012. Throughout the discussion, the study of unfair commercial behaviours in off-plan sales proceeds with the thinking on the design of a better regulatory regime, which involves yet goes beyond the analysis of individual rules of the Consent Scheme and the Residential Properties (First-hand Sales) Ordinance. The thesis first examines information and description of a variety of aspects pertaining to the property, the agreement and the sale: floor area; internal and external dimensions; fittings, finishes and appliances; location and environmental features; floor number; date of completion; lease term; salient points of the Deed of Mutual Covenants and Land Grant Conditions; sales arrangement; and transaction record. This is followed by a discussion on the design of the sales brochure, show flats, advertisements, project website, and preliminary agreement for sale and purchase. Then the thesis explores the bigger picture of the construction of a regulatory regime that strikes a balance between economic freedom and consumer protection, where different approaches to regulate property misdescripton including the doctrine of misrepresentation at common law and the Property Misdescriptions Act 1991 are compared.