XN000022-1986-01-16 — Page 6

5

I

THURSDAY, JANUARY 16, 1986

(A)

(B)

WHERE A PERSON QUEUED TO PURCHASE A PROPERTY IN A DEVELOPMENT IN ANTICIPATION OF BEING ABLE TO SELL THE UNIT FOR WHICH HE HAD SIGNED A PRELIMINARY AGREEMENT TO PURCHASE BEFORE SIGNING THE SALE AND PURCHASE AGREEMENT: AND

WHERE A PERSON PAID AN INITIAL DEPOSIT AND SIGNED AN AGREEMENT FOR SALE AND PURCHASE ON A PROPERTY WITH A VIEW TO SELLING THE BENEFIT OF THE AGREEMENT AT A PREMIUM PRIOR TO COMPLETION OF THE DEVELOPMENT.

IT WAS GENERALLY AGREED THAT MOST CONCERN WAS ABOUT THE TYPE OF SPECULATION IN (A)- THE SECOND FORM WAS LESS PROBLEMATIC AND IN ANY CASE WOULD BE EXTREMELY DIFFICULT TO PREVENT,

IT APPEARED THAT THE MOST SIGNIFICANT CONTRIBUTION TO SPECULATION AROSE FROM THE FIRST-COME-FIRST-SERVED+ SALES SYSTEM, LOW INITIAL DEPOSITS AND FACILITIES WHEREBY NOMINAL OWNERSHIP OF PROPERTY COULD BE FREELY TRANSFERRED PRIOR TO COMPLETION OF SALE AND PURCHASE AGREEMENTS.

THE PAPER PROPOSED THAT:

(A)

(B)

(C)

THE REAL ESTATE DEVELOPERS' ASSOCIATION (REDA) SHOULD RECOMMEND TO ITS MEMBERS A SCHEME INVOLVING INTRODUCTION OF A SALE-BY-BALLOT SYSTEM FOR DISPOSAL OF DEVELOPMENTS WHERE IT WAS ANTICIPATED THAT SPECULATORS MIGHT BE

INTERESTED;

A LARGER DEPOSIT OF UP TO A MAXIMUM FIVE PER CENT OF THE PURCHASE PRICE OF A UNIT SHOULD BE PAID BY THE PROSPECTIVE PURCHASER WHEN SIGNING THE PRELIMINARY AGREEMENT; AND

PURCHASERS SHOULD NOT BE PERMITTED TO TRANSFER THEIR PROPERTY RIGHTS DURING THE PERIOD BETWEEN SIGNING THE PRELIMINARY AGREEMENT AND THE COMPLETION OF THE SALE AND PURCHASE AGREEMENT.

IT SAID THE MEASURES PROPOSED HAD BEEN CONSIDERED IN DETAIL BY THE DIRECTOR OF LANDS, THE REGISTRAR GENERAL AND REPRESENTATIVES FROM REDA AND THE HONG KONG BRANCH OF THE ROYAL INSTITUTE OF CHARTERED SURVEYORS.

+ ALL ARE IN AGREEMENT THAT SOME ACTION IS REQUIRED AND THAT THE MEASURES PROPOSED WILL BE EFFECTIVE IN TACKLING THE BASIC PROBLEMS WHILST MAINTAINING THE INDEPENDENCE OF THE PROPERTY MARKET FOR GENUINE INVESTMENT PURPOSES, THE PAPER SAID.

MEMBERS OF LBAC AGREED THAT THE PROPOSALS SHOULD BE ENDORSED FOR RECOMMENDATION BY THE REDA TO ITS MEMBERS.