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There are legislations sanctioning acts of anyone, including developers involving fraud or misrepresentation, a spokesman for the Housing, Planning and Lands Bureau said today (April 24).
"Fraudulent behaviour may amount to a criminal offence and offenders may be liable to prosecution under the Theft Ordinance (Cap. 210)," the spokesman said in response to media enquiries on a buyer claimed to have been misled by information released by developer into buying a property.
"In terms of civil liability, at Common Law where a misrepresentation amounts to fraud, an action for damages in tort for deceit is possible," the spokesman said.
"Relevant provisions of the existing legislation are applicable to individuals involved in misrepresentation or fraudulent behaviour irrespective of whether they are developers, individual flat owners or purchasers," the spokesman said.
Under Section 3(1) of the Misrepresentation Ordinance (Cap. 284), a person who makes a misrepresentation inducing another person to enter into a contract may also be liable for damages even if the misrepresentation is a non-fraudulent misrepresentation, unless he could prove that he had reasonable grounds to believe and did believe up to the time the contract was made that the facts represented were true.
Further, pursuant to Section 2 of Cap. 284, where a person has entered into contract after a misrepresentation has been made to him and the misrepresentation has become a term of the contract or the contract has been performed, he may be entitled to rescind the contract subject to the provisions of Cap. 284.
"Hence, if a property is sold by means of fraudulent behaviour or misrepresentation, the seller may be liable under the above Ordinances, no matter whether the seller is a developer or the owner of a second-hand flat.
"We therefore do not consider it necessary to separately introduce legislation relating only to developers' acts involving fraud or misrepresentation," he added.
The spokesman cautioned prospective purchasers not to make decisions lightly or hastily. "Acquisition of properties is not a simple matter, as each party to a transaction is required to fulfill legal obligations arising from a contract and bear the consequences of not meeting these obligations.
"Prospective purchasers should be aware of their rights and obligations, and take all reasonable care to protect their interest, such as reading the contents of the Agreement for Sales and Purchase closely.
"The public should not come to hasty decisions to buy properties on account of reports that certain new projects are selling fast. Members of the public should carefully consider their affordability and needs, and look up the actual prices of comparable transactions in the market. In this regard, they could check the comparable transactions registered with the Land Registry.
"Where necessary, they should seek professional advice to better protect their interest before signing the agreement," the spokesman said.
The spokesman noted that the Government had adopted a three-pronged approach to strike a balance between maintaining a favourable business environment and stepping up consumer education to help prospective buyers better understand their responsibilities and protecting their interests.
"Since 2001, the Real Estate Developers' Association (REDA) has been operating a self-regulatory regime under which its members need to comply with guidelines issued by REDA when selling uncompleted residential units. A set of refined guidelines was further issued last year to enhance the regime of self-regulation.
"The Consumer Council and the Estate Agents Authority (EAA) are jointly preparing a checklist to remind buyers of what they should be aware of when buying new properties.
"The EAA has stepped up enforcement action and further improve the professionalism and calibre of estate agents. The EAA is also working towards increasing the breadth and scope of qualifying examinations to ensure that new estate agents entering the trade are of a high standard," the spokesman said.
"The Government, in conjunction with the Consumer Council and EAA, continue to meet regularly with REDA to identify room for further improvement in property sales to ensure that the self-regulatory regime meets the needs of consumers and the real estate sector," the spokesman added.
Ends/Monday, April 24, 2006
Issued at HKT 19:22
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