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Legal Update

New Measures on Sale of Uncompleted Residential Properties - Nine Additional Measures with effect from 1 June 2010

7 June 2010
Mayer Brown JSM Legal Update

On 1 June 2010 the Real Estate Developers Association of Hong Kong ("REDA") issued a circular with the new Guidelines on Sale of Uncompleted Residential Properties ( "New Guidelines" ) setting out the much publicised Nine Additional Measures on sale of uncompleted residential properties.

A copy of the New Guidelines can be obtained from the following website:

REDA is still liaising with the Government on the guidelines for completed residential properties and save for Measure 9 (on-site unit(s) at completed developments), the guidelines for completed residential developments has not been published by REDA yet.

Contents of the New Guidelines

The New Guidelines introduce a number of new requirements. Below is a brief description:

  • Measure 1 (members should observe)

Members of REDA should duly observe REDA's guidelines in selling uncompleted first-hand private residential properties.

  • Measure 2 ("five-day disclosure rule")

The existing "five-day disclosure rule" on transactions will need to include transactions which involve members of the Board of the developer member and their immediate family members. A revised template for disclosure of transaction information is at Annex A.

  • Measure 3 (show flats)

There are 12 new requirements applicable to the show flats. See Annex B and the requirements in Measure 3.

  • Measure 4 (first price list)

Certain minimum numbers of units are to be included in the first price list in each batch with an exemption from this minimum number requirement for the sale of "houses" so categorised in the Deeds of Mutual Covenant.

  • Measure 5 (sale brochures)

The sales brochures should be made public seven days prior to commencement of sale and need to include and comply with certain additional requirements.

  • Measure 6 (all price lists - three days in advance)

The price lists should be made public at least three calendar days in advance of the commencement of sale when selling any number of units to whichever parties. This applies to all the price lists (not just the first price list).

  • Measure 7 (promotional materials)

Promotional materials of the development will need to include certain additional information including the district where the development is situated with reference to the Outline Zoning Plan(s) and the address of the development as confirmed with the Rating and Valuation Department.

  • Measure 8 (websites information)

Members should concurrently upload the sales brochures and all price lists onto their websites.

  • Measure 9 (on-site units for completed development)

When selling completed first-hand residential properties, members should provide on-site unit(s) at the development for the public to visit.


Only Measure 2 shall apply (see explanatory notes 1, 2 and 3 of the New Guidelines) under the following circumstances:

  1. sale on an "en bloc" basis under a single transaction (including where the development is in the form of "houses" so categorised in the Deed of Mutual Covenant, sale of all houses in the development to a single purchaser under a single deal); or
  2. sale by way of public auction or public tender.

For sale on an "en bloc" basis , the buyers should sign an undertaking to the effect that when the units sold on an "en-bloc" basis are later put on sale to individual buyers in the market, the vendor should observe all the applicable Measures.

Pre-sale Consent under the Consent Scheme

In respect of developments which are subject to the Consent Scheme, the Headquarters of the Legal Advisory and Conveyancing Office ("LACO") of the Lands Department issued a Circular Memorandum ("CM") No.62 on 2 June 2010. This largely mirrors the new additional measures of REDA.

A copy of the LACO CM No.62 can be obtained from the following website:

The new pre-sale consent letters for uncompleted developments to be issued in and after June 2010 will be modified by LACO accordingly.


The new Measures will certainly add transparency to the market. With the new Measures now in place, it is expected that the previous pre-sale consent applications being processed by the Director of Lands can move forward to the implementation stage. As a number of pre-sale consent applications had previously been held up pending the publication of the new Measures, the number of uncompleted developments that can be put in the market for sale in the coming months should increase significantly.

For inquiries related to this Legal Update, please contact:

Raymond Wong ( )

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