There are certain things you have to pay attention to when purchasing a first-hand residential property, be it completed or uncompleted. This article will provide some tips for you.

Visit the development site and get to know the surroundings, including transportation and community facilities. If the development is being sold under the Lands Department Consent Scheme, the developer is required to include in the sales brochure information on prominent environmental features in the vicinity of the development, and to indicate on a plan showing any slopes and any retaining walls or other related structures which the owners of the development are required to maintain. You can also go to the Statutory Planning Portal to search for planning information of a particular area.

• Statutory Planning Portal
  http://www.ozp.tpb.gov.hk/

A standardised definition of “saleable area” was adopted for sale of uncompleted residential units since 10 October 2008. Be aware of the following:

• The “saleable area” of a unit means the floor area of the unit enclosed by walls (inclusive of the floor area of any balconies, utility platforms and verandahs).
• “Other areas”, such as flat roof, roof, garden, cockloft, yard, terrace, bay window, air-conditioning plant room, carparking space etc., will be listed item by item, but will not be included as part of the saleable area.
• When calculating the per-square-foot price, you should understand whether the calculation is based on the “saleable area” or the “gross floor area” of the unit. Enquire with the developer if you have any doubt.

• Detailed definitions of saleable area
  http://www.landsd.gov.hk/en/images/doc/60.pdf

The following items are some of the information that should be included in a sales brochure:

• The saleable area
• Interior and exterior fittings and finishes
• Expected completion date of the building
• Estimation of management fees
• Can pets be kept in the unit?
• What communal and recreational facilities will be available at the completion date?
• Whether owners need to share the expenses for managing, operating and maintaining the public open space or public facilities inside or outside the development, and the location of the public open space or public facilities
• Slope maintenance responsibility

Don’t forget to read the Government Lease and the DMC (or the draft DMC) which contains important information for prospective buyers. A Government Lease states the lot number, lease term, user restrictions, etc. while a DMC includes provisions such as definition of common areas, principle of fixing management fee, ownership of the rooftop and external walls and specific rights reserved to the developer, etc. Sales brochures for development under the Lands Department Consent Scheme will contain salient points of the Government Lease and Deed of Mutual Covenant.

• Integrated Registration Information System Online Services
  https://www.iris.gov.hk/eservices/

The Lands Department Consent Scheme is a system put in place to regulate the sale and purchase of uncompleted buildings and to ensure orderly sale of the same. Before you purchase an uncompleted unit under the Scheme, you should:

• seek confirmation from the developer whether a “Consent to Sell” has been issued or you can check it on the Lands Department website;
• note that the developer or the estate agent are not allowed to receive any deposit or “reservation fee” before the developer has obtained the “Consent to Sell”.

• Pre-sale Consent issued by Lands Department
  http://www.landsd.gov.hk/en/consent/index.htm

The provisional agreement for sale and purchase of an uncompleted residential unit under the Lands Department Consent Scheme is not a binding agreement for the purchaser to buy the property but is binding on the vendor. However, if you withdraw from it, your deposit of up to 5% of the property price may be forfeited.

If the unit is not under the Lands Department Consent Scheme, the provisional agreement for sale and purchase is a binding agreement for sale and purchase on both the vendor and the purchaser.  The developer may take proceedings to enforce specific performance of the agreement or retain your deposit and claim for damages for breach of the agreement.

When you proceed to sign the formal sale and purchase agreement, be aware of the following:

• estimated completion date of the development; and
• the handover date of the property.

You should also ask the developer about all the charges related to the transaction such as legal fees, stamp duty, building plan fees, etc.

• Sale and purchase of property under construction
  http://www.hkclic.org/en/topics/saleAndPurchaseOfProperty/sale_and_purchase_of_property_under_construction/index.shtml
• Standard form of Agreement for Sale and Purchase
  http://www.landsd.gov.hk/en/images/doc/60.pdf

If you have purchased an uncompleted residential unit, you may not have the opportunity to inspect the property before signing any agreement or even the assignment. As soon as you have taken possession of the property after completion of the assignment, you have to:

• carefully inspect its fittings, finishes and the workmanship;
• jot down the details of all the defects and notify the developer as soon as possible.

There is usually a defect liability period of 6 months to a year for newly completed property.

Knowledge and preparation is everything when buying a home. The links below will direct you to more guidance and advice on purchasing a first-hand property.

• Notes to Purchasers of First-hand Residential Properties
  http://www.eaa.org.hk/publications/propertypamphlet.pdf
• Guide to Purchasing Properties
  http://www.eaa.org.hk/consumers/doc/property.pdf
• Guidelines issued by the Real Estate Developers Association of Hong Kong
  http://www.eaa.org.hk/consumers/reda.htm

Note: This article serves as a general guide only. In case of doubt, please refer to the relevant regulations or seek advice from the legal profession.