Saturday, September 24, 2011

New rules on showflats delayed to 'refine details'

TOUGH new rules to ensure homebuyers finish up with a flat just like the showflat, among other goals, are on the way - only a little later than planned.
The slew of rules, to make developers more transparent and give buyers greater confidence, were expected to have been in place by the end of this month.

However, the Urban Redevelopment Authority (URA) told The Straits Times that it needs more time to refine the details for some of the proposals in consultation with the industry.

Some require legislative changes which take time, a URA spokesman added. The new implementation date will be announced at a later date.

The URA said that it is refining proposals such as the detailed requirements to ensure accurate showflats.

They include requiring developers to build showflats with the same floor area and floor-to-ceiling height as the actual units and with signs to mark positions of removed walls, partitions or doors.

URA is also finetuning changes to do with the standard template of information that developers must provide to buyers of the home they are purchasing.

These include outlining accurately the floor area of rooms in a new unit - from balconies, to bedrooms and the dining area - and also the space for areas such as planter boxes and bay windows.

Some developers say they are ready for the new rules and are not overly concerned about the implementation date being pushed back. Soilbuild managing director Lim Chap Huat said his firm is confident of meeting the new rules; it would require more administrative work on some fronts but it was 'no problem'.

However, others say they have provided feedback to URA on concerns they have over certain regulations.

A developer, who declined to be named, said while the industry is generally supportive of more transparency and reducing misrepresentations, there is a concern that unreasonable buyers might take advantage of certain rules, especially in a market downturn.

'We don't want the industry to be more contentious instead as a result of these new rules. There might be unhappiness, for example, over how the size of a room is calculated, whether from the edge of or from the centre of a wall.

'And with the size of individual rooms given, instead of just the overall size of the home, there might be more room for disputes.'

He added that developers would also prefer to have the option of adjusting prices as close to a project's launch date as possible in the light of market volatility and fast-changing sentiment.

The current proposed changes require the price list of units to be released at least two days before launch.

Mr Steven Tan, OrangeTee's executive director of residential, agreed that URA might want more time to look into the details of the changes to ensure that it is not only beneficial to buyers but also fair to developers.

'For example, in the template which indicates estimated measurements, will developers be allowed a reasonable margin of error due to slight changes during the construction stage or will developers be held liable for them?' he asked.

'I think URA might want to take everything into consideration and from different perspectives before proceeding with the final changes.'

On developers' feedback that URA has been visiting showflats in the lead up to the new rules, URA said it conducts regular showflat visits to help it gain a better understanding of the setting up of showflats by developers.

'They are not meant to enforce the new rules, which have not been effected yet,' the spokesman added.

When the raft of proposals were unveiled in March, the URA said that final changes to the Housing Developers (Control & Licensing) Act and Housing Developers Rules were expected to take effect by the third quarter of this year.

The proposed changes tackle a range of issues, 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.

Just last month, URA also announced three new proposals in response to feedback from an online consultation exercise held in March and April.

It will now name developers that have violated the new regulations and post the list on its website. Another key change will see the revised rules applied to all housing developers, even small operators building four units or fewer.

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