For information

Background

At the meeting of the LegCo Panel on Housing held on 1 March 1999, Members were briefed on Government's proposal of introducing new legislation to require property developers to provide a sales brochure in the sale of uncompleted residential properties. Since then, we have received useful feedback on our proposal from various sectors. Further discussions have been conducted with the interested parties, including the Consumer Council (CC), the Hong Kong Institute of Surveyors (HKIS), the Hong Kong Institute of Architects (HKIA) and the Real Estate Developers Association of Hong Kong (REDA) with a view to improving and fine-tuning the legislative proposal to better achieve our objective of enhancing the transparency of sales information in brochures.

Revised proposals

2. Taking into account further views and submissions we have received from the parties concerned, some changes are proposed as follows -

Internal floor area

3. The previous proposal of requiring the disclosure of "internal floor area" in sales brochure has the following problems. First, under our previous proposed definition, "internal floor area" shall be the area contained within the external walls of a property but include all internal partitions and columns within the unit. This definition will easily create confusion as consumers may instinctively think that "internal floor area" refers to the usable area or carpeted area of a property. Secondly, we have received many views from professional bodies pointing to the various technical and practical difficulties in measuring accurately the "internal floor area". For example, because of technical considerations, sometimes it may be necessary to substitute an external wall with a column amalgamated to it with a thicker external load bearing wall. Also, the actual thickness of walls will be affected by many factors such as fittings, finishes and workmanship. For these reasons, the area derived from this new definition is likely to be prone to errors and give rise to disputes. In addition, consumers will likely benefit from having information on the dimensions of the floor space enclosed by external walls rather than simply a figure on the "internal floor area". Given these problems over the adoption of "internal floor area", we need to consider other viable alternatives.

4. In order to provide consumers with more information on the internal floor space of a property, we propose to tighten up the provisions by requiring floor plans to contain additional information as follows-

1. The floor plans should contain information on the range of thickness of external walls (exclude the thickness of fittings and finishes) as shown on structural plans.
   
   
2. In a high-rise building, it is not uncommon that the thickness of external walls and load bearing walls varies to a certain extent from floor to floor. In general, the external walls are thicker in the lower floors than that in the higher floors. We propose to require separate floor plans be provided for each type of residential property located in the lower, the middle and the upper floors of the building.
   
   
3. Instead of providing the "internal floor area", the floor plans should show dimensions of each section of the perimeter of the floor space enclosed by external walls and interior walls at floor level.

5. We are of the view that the above improvements to the floor plan can provide purchasers with a more comprehensive idea on the physical dimensions of the interior floor space of the properties but without creating any unnecessary confusion.

Building area

6. We have proposed that a new standardized method should be introduced for the measurement of floor areas of residential properties for inclusion in sales brochures. The "building area", which is a new definition to be introduced, comprises the "saleable area" and the apportioned common areas. We further require that the apportioned areas such as management offices, caretakers'rooms and covered areas of clubhouses should be separately listed from the "saleable area" and other apportioned common areas such as lift lobby and machinery rooms.

7. After consultation with relevant professional bodies, we propose to further enhance transparency by improving the presentation of "building area" through a requirement that the common areas should be clearly segregated into two categories, namely the "accountable apportioned common areas" and the "non-accountable apportioned common areas". The former represents the apportioned share of the gross floor area approved by the Building Authority less the "saleable area". The latter consists of any floor area of the development which are exempted by the Building Authority but are included in the calculation of "building area".

8. Major facilities which have been included under "accountable apportioned common areas" and "non-accountable apportioned common areas" should be listed accordingly in the sales brochure. Examples are lift lobbies, staircases, covered areas of clubhouse, management office and caretakers' rooms etc.

Saleable area

9. While the "saleable area" is a widely adopted definition since the 1980's, we proposed that the Chinese version of "saleable area" should be amended to read which better reflect the meaning of the English term than now being commonly used but may easily be misinterpreted as the actual usable area of the property.

10. An example of a schedule containing the measurements of the "building area" and the "saleable area" of uncompleted properties for sale to be disclosed in sales brochure under the proposed legislation is provided at Annex for Members' easy reference.

Conclusion

11. The above revised proposals aim to improve the transparency of property information in sales brochures without causing unreasonable practical and technical difficulties. Under our revised proposal, the sales brochures will contain detailed information on the range of the thickness of external walls and measurements of the physical dimensions of the enclosed floor space of the property (the thickness of fittings and finishes on the walls are inclusive). In addition, consumers can readily obtain from the sales brochures greater and more accurate details on the apportioned common areas which have been included in the calculation of "building area". Our revised proposal is supported by the Consumer Council. REDA, relevant professional bodies including the HKIA and HKIS have also indicated their agreement to the proposals.


Housing Bureau
Government Secretariat
May 1999


A: LCP-SD.doc

Annex

		Saleable Area	Ancillary Accommodation(a)	Accountable Apportioned Common Areas(b)	Non-accountable Apportioned Common Areas(c) (If applicable)	Building Area
Floor	Unit	(1)		(2)	(3)	(1) + (2) + (3)
8/F	A	842 sq. ft.	46 sq. ft.	72 sq. ft.	106 sq. ft.	1020 sq. ft.
8/F	B	857 sq. ft.	44 sq. ft.	78 sq. ft.	111 sq. ft.	1046 sq. ft.

Note

(a) Ancillary accommodation may refer to bay window, roof, or terraces, etc. which should be listed separately from the Saleable Area

(b) Include lift lobbies, staircases...........

(c) Include machinery rooms, covered areas of clubhouse..........

Total Accountable Gross Floor Area = 49689.517 m² (based on building plan submission on xx February 1999)
Total Non-accountable Floor Area = 34567.25 m²