Wednesday, February 9, 2011

Showflats: Is what you see what you get?

TOUGHER rules to ensure that showflats look like the apartments that eventually get built are on the cards to ensure that buyers get what they pay for.

The move is to stop developers taking artistic licence with display homes by removing structural walls and columns and placing ceilings higher to make the unit look bigger than it will actually be.

Some buyers have been shocked at how small their units turn out to be compared with the plush showflat they saw at the launch.

The Urban Redevelopment Authority (URA) said yesterday it is reviewing the Housing Developers (Control & Licensing) Act and Housing Developers Rules to provide 'more accurate and transparent information on housing projects', and so help buyers make better decisions.

That is likely to mean ensuring showflat dimensions are accurate and that advertisements do not exaggerate a project's location and plan, and so reduce the number of buyers claiming misrepresentation, sources said.

Industry watchers say the URA could insist that bomb shelters - which are built into completed units - are included in the showflat's layout.

Developers might also have to ensure that walls replaced with glass panels - tricks used to make an apartment look more spacious - are clearly indicated.

Balcony space would also be clearly demarcated so that the living room space is not made to look larger than it actually is.

Ceiling heights in showflats and the thickness of structural walls might also have to be in line with the actual home.

Most developers welcome the move, saying it will likely benefit buyers unsure about what is included and what is not.

Global Property Strategic Alliance chief executive Jeffrey Hong said the prevalence of shoebox units - those under 500 sq ft - may have prompted the URA move. The tiny flats have been promoted aggressively recently, and buyers may have been upset when they got their keys.

'Accuracy is very important. Sometimes, buyers are unsure as to what in the showflat will be included in their purchase,' said Mr Hong.

The space housing the air-conditioner ledge and planter box is sometimes included as part of the showflat area, he added.

Boutique developer Oxley Holdings' chief executive, Mr Ching Chiat Kwong, said the URA routinely checked his showflats last year: 'There is no point in taking out walls. At the end of the day, if there is a dispute, it will look bad for our image. I don't think it is worth the cost.'

EL Development managing director Lim Yew Soon noted that developers should not show things that are misleading.

The URA said yesterday it is also reviewing the Act to simplify licensing requirements for developers. There will be more details when a public consultation on the proposals is launched next month.

Developers and real estate lawyers The Straits Times spoke to said the requirements for developers were fair.

Ms Leong Pat Lynn, a partner at Rodyk & Davidson (LLP)'s real estate practice group, said the requirements are there to protect buyers. 'Simplifying licensing requirements could be procedural or...a clarification of how the URA assesses certain criteria for less straightforward or unusual cases,' she said.

This could, for example, involve re-evaluating what constitutes a developer's track record - one of the current criterion - and possibly accepting non-residential development experience.

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