RES exam question on Planning & Development: the Housing Developers Act
Mr Chen is buying a new-launch private residential unit from a licensed developer. Consider the following statements about the Housing Developers (Control & Licensing) Act (HDCLA): (i) The developer must hold a Sale Licence before accepting any booking fees. (ii) The Project Account may be drawn down freely by the developer for any business purpose once the building is completed. (iii) All sale proceeds must be deposited into a Project Account held with an approved financial institution. (iv) The developer is obliged to provide a scaled floor plan and breakdown of floor areas to each purchaser. Which statements are correct?
- A(iii) and (iv) only
- B(i), (iii) and (iv) only
- C(ii), (iii) and (iv) only
- D(i), (ii) and (iii) only
Show answer & explanation
Answer
B. (i), (iii) and (iv) only
Explanation
Statement (i) CORRECT — a developer must obtain a Sale Licence from the Controller of Housing before accepting any booking or reserving any unit (HDCLA s.5). Statement (iii) CORRECT — all sale proceeds must be deposited into a Project Account and can only be drawn down for permitted project costs on certificate of architect or professional engineer (HDCLA). Statement (ii) WRONG — Project Account draw-down is strictly regulated even after completion; surplus can only be released after all units are sold and all obligations discharged. Statement (iv) CORRECT — the HDCLA requires developers to provide buyers with scaled floor plans and a breakdown of floor areas (including net, balcony, void, etc.) to prevent misrepresentation of unit size.
Study the concept behind this question: Planning & Development Control: URA Master Plan, Zoning, GFA
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