Posted by
dizzyhytes
14 yrs ago
I just bought a property in the Midlevels. It's the first time I've bought anything in HK. The market has quite a few nuances, one of which is the gross vs net size issues.
The point is, property here is bought and sold on the gross size (you calculate the price per square foot based on gross size), even though the smaller "saleable size" (or net size) is listed on the official papers. I never found any mention of the gross size on the property search and when I asked the agent, he re-confirmed the gross size was 1260 sq ft.
The place I bought was, I thought very good value, with a reasonable price per square foot. In submitting my loan applications, the banks all reverted to say the gross area was 1156 sq ft, over 100 sq ft smaller than I thought. Clearly there is a not insubstantial difference to the price per square foot given this new information.
I based my decision on calculations of relative value against the size he told me about, naively without thinking to validate this information.
I feel that the agent totally misrepresented the gross size to me, and frankly, it's not like I can back out now as I've already signed the Provisional S&P.
To be honest, even with the actual gross size, I still want to go through with the purchase. I just feel tricked. Do I have any recourse against the agent or vendor? I am not sure who misrepresented the size but I don't think it was the vendor.
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do you have any statement about gross size in writing? if not, forget it and move on. it's not worth the hassle
if you really feel strong about it, you can complain about the agent to the real estate agents association http://www.eaa.org.hk/welcome.htm
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New in town? All property in Hong Kong is listed on a gross size per square foot basis. Whenever agents and buyers talk to each other, it is assumed they are talking about gross size. Gross size is what is listed on the agents' computers though under some new government measures for new properties, the price PSF has to be quoted in gross and net - though everyone uses gross. Obviously, you take a look at the property first and make sure it's what you want. Local parlance for net size, is percentage usage - which I think is net size/gross size x 100. Over 80% is considered quite good. I really don't think you have been tricked and I would think you would have zero recourse against the agent or the vendor.
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Hi Dizzyhytes!
Actually what happens is that the old properties, say buildings over 35-40 years all have their own"gross area." Meaning in the land search docs you will not even find the gross area, what you will find is the actually blueprints for the apartment and that will give you the real net area of the apartment. Most agents just input the net area into their computer then and mutliply it by a formula, so it is usually say the net area for an old building is 80% to that of the gross area, sometimes they use 85% or 90%. So nobody is taking you for a ride if it is an old building, but if it is a new building, then in the land search docs etc you can clearly see the gross and naturally net area of the apartment. As long as you happy with the actual apartment and find the net area suitable for your needs then you have to go with that and not worry about the gross area.
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LGMV, i think he is saying that the agent said gross is 1260 but the bank says it's gross 1156. hence the misrepresentation.
i think he gets the gross vs net story already (though i might be wrong)
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Cookie09, you are correct. I fully understand the groos vs net argument.
HKExpat, as you mentioned, the Land Search only reflected the net area and not the gross, so I had no official document stating what the gross area was. I did ask the agent to re-confirm the gross area prior to buying the place, and he re-iterated (on email) that the gross area was 1260. I assumed he had it from an official source. Silly me.
LGMV, my point is they represented that the gross area was 1260 and when I bought the apartment, I found that the gross area was only 1156.
This morning, he told me that his office has a different way of calculating gross area from surveyors (!) so they don't feel they did anything wrong.
To me this is all hogwash. Surveyors are formally recognised as experts in such matters; going by his argument, what's to stop unscrupulous vendors or property agents from inflating the gross area, then saying "sorry but my calculation says it's that, regardless of what the surveyors say".
To my mind they definitely misrepresented the gross size (and yes I have printouts of the ad and emails saying it was 1260), however whether I have legal recourse is another issue. And in any case what compensation would be reasonable?
Would anyone know, and what should I do now?
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I forgot to mention that I am less worried about compensation but I just feel that there is an integrity issue at stake and they should be taken to task. Certain standards need to be upheld in the industry and we all know there are far too many unscrupulous agents out there and they give a bad name to everyone.
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dizzy, if you have it on email and ad, i would put it forward to the http://www.eaa.org.hk/welcome.htm
they regulate the agents on exactly such matters. not to get compensation, but to go for the 'right' thing
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Lawmakers have pushed for greater legislation / regulations for the real estate agents, but the best they've come up with is a bunch of guidelines which don't even have to be legally enforced. Our government is useless at pushing businesses to be more "scrupulous".
I don't want to put a damper on your situation, but I don't think you have any legal recourse to pursue it.
However, I'm also not a person to take matters lying down - if I'm annoyed, I will write a letter to anyone and everyone! It may not achieve anything but at least you tried to do something about it.
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Thanks everyone for your comments. You are probably right about the no-recourse part, but I am so indignant I probably will complain to the real estate agents association.
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