Regulating Information Asymmetry in the Residential Real Estate Market ― The Hong Kong Experience

This book conducts a detailed examination of the current form of the Hong Kong residential property regulatory system: the 2013 Residential Properties (First-hand Sales) Ordinance (Cap 621). The author sheds light on how the new legislation promotes a number of values including information symmetry, consumer protection, the free market and business efficacy. It provides a detailed account of how the regulatory mechanism has evolved from non-regulation, regulation by an administrative scheme, industrial self-regulation and now legislation over the past six decades in order to catch a rich variety of unconscious sales tactics (such as selective information and misrepresentation of floor area, internal structure, fittings and finishes, location, floor, date of completion, information about the sale and past transactions and etc.) in order to protect the interests of stakeholders in this ever-changing first-hand residential property market.

This book breaks down this complicated subject matter by focusing a number of chapters on a specific attribute of the residential property on sale (e.g., saleable area, gross floor area, internal structure, fittings and finishes, location and environmental features, floor number and etc.). It then examines the construction of a number of channels through which the information is communicated to the prospective buyer (e.g., the sales brochures, advertisement, show flats, project websites and etc.). After that, the book discusses the offence of misrepresentation in first-hand sales of residential properties created by the legislation. The tension between consumer’s rights on one hand and the pursuit of free market principles on the other is but one example of the conflicting values thoroughly discussed in the book, others include superstition vs. modernization and clarity vs. flexibility.

This book will be of interest to scholars and students in property law, construction law, land economics, jurisprudence and public administration, and legal professionals working in real estate and construction sectors.

Devin S. Lin, PhD writes and reseraches on Construction Law and Property Law and is now teaching in the School of Economics Law, Southwest University of Politics and Law, China.