Thursday, March 17, 2011

New rules to protect home buyers

A RAFT of new rules are on the way to give buyers more confidence about the home they are buying while ensuring that developers are more transparent.

The proposed changes tackle a range of areas, from the accuracy of showflats to the problems of pressure selling and misleading advertisements.

They aim to protect buyers by making information about units more accessible while removing the distraction of misleading marketing gimmicks.

'The proposals are pre-emptive in nature and seek to systematically entrench good practices which are already adopted by some private developers in the industry,' said the Urban Redevelopment Authority (URA) yesterday.

One change buyers will surely applaud is a rule that will ensure that showflats accurately depict the actual unit.

Developers have been known to take artistic licence by removing structural walls and columns and raising ceilings to make a unit look bigger.

Another proposal gives buyers more time to decide and help them avoid being pressured into buying units on the spot. Developers will have to provide the price list for units to be launched at least two days before the first option to purchase is issued. But developers can adjust prices after the launch, by varying the discount offered from the listed prices, in response to changes in market conditions.

Prices of sold units will also be updated weekly on the URA's website instead of every month as it is done now.

Buyers can also count on a standard template that will state how much space areas like balconies, planter boxes and bay windows each unit will have. If there is a discrepancy they may have the basis for a claim against the developer.

Other changes include ensuring that website ads do not contain false or misleading information. Developers will also have to provide their track record.

The URA's group director (land sales and administration), Mr Marc Boey, said the URA first started working on the proposed changes to the Housing Developers (Control & Licensing) Act and Housing Developers Rules in 2009.

The URA said public housing projects that involve private developers such as the Design, Build and Sell Scheme (DBSS) and executive condominiums will fall under the new rules.

Developers who consistently flout the rules might receive the maximum penalty of having their licence suspended. However, Mr Boey emphasised that most developers were cooperative and would correct an offence quickly when notified.

Home buyers have cheered what they say should have been introduced a long time ago. Mr Max Tee told The Straits Times: 'I appreciate the move to make showflats look more accurate. Some of them can be misleading, especially when it comes to the smaller details.'

Most industry players welcome the moves. Mr Wong Heang Fine, president of the Real Estate Developers Association of Singapore (Redas), said: 'Redas is committed to continually promote good practices and professionalism among developers to deliver better and higher quality homes for all.'

Mr Lim Yew Soon, managing director of EL Development, added: 'In the past, there were no guidelines for showflats so we observed other developers to see what can be done. It's good that there is a level playing field now with clearer rules.'

Property agents expect a smoother buying process with the changes. PropNex's associate branch director Jimmi Long said: 'Home buyers will be able to see what they are getting from the apartment at a glance, making the selling process easier. These rules protect agents from legal problems should disgruntled buyers accuse (agents) of mis-selling apartments.'

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