Flat buyers seek help from legislators about changed mortgage conditions

Buyers of The Vertex, a residential estate in Cheung Sha Wan, have sought the help of two legislators to demand the development’s new owner abide by the more generous mortgage package set by its former owner.

They say the VMS Group, which purchased the development from the China Evergrande Group last year, should provide them with loans equivalent to 90% of the values of their respective flats, as promised by China Evergrande, instead of lowering the loan cap to 80%.

In a letter dated June 15 to the buyers, VMS said the buyers’ deposits would be forfeited if they failed to complete their purchases according to the new terms by yesterday (July 5).

 A buyer surnamed Chan told the TYR earlier that she had paid HK$400,000 as a deposit and the stamp duty for a HK$7 million unit, and felt helpless about meeting the purchase deadline she would have to top up her deposit after the mortgage cap was lowered.

A buyer representative surnamed Lee said about 20 buyers currently faced having their deposits forfeited by VMS.

On Monday, the buyers held a meeting with legislators Bill Tang Ka-piu and Doreen Kong Yuk-foon, who agreed to help them pursue their case.

Kong said she hoped the government would follow up on whether the developer concerned had breached any rules governing the sale of new flats by asking flat buyers to sign supplementary contracts on mortgage terms and arrangements.  

She said the Consumer Council had agreed to continue to mediate between the buyers and VMS and the management committee of its Consumer Legal Action Fund (CLAF) would make a decision by early August on whether to provide financial support for the buyers to take legal action to pursue their claim.

Yesterday, Tang said the developer may not forfeit the buyers’ deposits as soon as the deadline passed, as they would take various factors into consideration.

He said there was a chance that the 20 buyers could win a civil lawsuit against the VMS, especially if the government took action against the company for allegedly breaching the rules governing the sale of new flats.

However, after VMS bought the development, it decided to change the mortgage terms. VMS lowered the mortgage cap to 80% of the price of a flat, and cancelled the repayment exemption for the first year. Besides, interest for the loan will be charged at 2.5% per annum in the second year and 5.5% per annum for the remaining repayment period.