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Legal Update

Standardised definition of "Saleable Area"

24 October 2008
Mayer Brown JSM Legal Update
A new standardised definition of "Saleable Area" has been adopted and become a requirement under the Lands Department Consent Scheme with effect from 10 October 2008.
Full Update
Revised standard form of Agreement for Sale and Purchase
The Government has conducted a review of the Lands Department Consent Scheme and come up with a revised definition of "Saleable Area" and a new definition of "Other Areas". The standard form of Agreement for Sale and Purchase (for the sale of uncompleted residential units under the Consent Scheme) ("ASP") has been revised. With effect from 10 October 2008, new applications for pre-sale consent, and applications being processed but not yet approved by the Legal Advisory and Conveyancing Office ("LACO"), are required to adopt the revised form of ASP. 
The definition of "Saleable Area" in the ASP form has been revised to include only the areas of the unit and any balconies, utility platforms and verandahs whilst other areas originally included under the definition of "Saleable Area" such as cockloft, bay window, carparking space, yard, terrace, garden, flat roof and roof now come under a new definition of "Other Areas".  
The measurement of the Saleable Area of the unit (including balcony/utility platform/verandah) and the measurement of each item of the Other Areas need to be separately set out in a new Schedule 4 to the ASP on "Measurements of the Property". The measurement of the air-conditioning platform also has to be stated in Schedule 4 if one is sold as part of the property.
Sales brochures
The requirements regarding the information to be disclosed in the sales brochures have also been amended. The sales brochure for uncompleted first-hand residential properties which have been or are being approved for pre-sale by LACO from 10 October 2008 onwards must include the revised definition of "Saleable Area", the new definition of "Other Areas" and set out the Saleable Area and the Other Areas of each property. The Chinese translation of the term "Saleable Area" shall be "????".
The standardised definition of "Saleable Area" was settled after the Transport and Housing Bureau's consultation with the various stakeholders and tallies with the Hong Kong Institute of Surveyors' Code of Measuring Practice and Supplement to the Code issued in August 2008. Standardising the definition seeks to promote transparency and enhance clarity of information in the sales description presented for uncompleted residential properties. It now offers homebuyers more comprehensive and accurate information on the actual floor areas of residential units for consideration and comparison.
For further information, please contact:
Ellen Tsao
Connie H.Y. Yu
Senior Associate
Learn more about our Real Estate practice.

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