Cebu City eyes law vs misleading showroom displays, marketing practices.

Local

By MyTVCebu Desk

CEBU City may soon require real estate developers to clearly disclose what buyers will actually receive upon turnover.

This is under a proposed ordinance aimed at curbing potentially misleading showroom displays and marketing practices.

The measure, authored by Councilor Harold Kendrick Go, is scheduled for a public hearing during the Cebu City Council’s regular session on June 23.

Titled the proposed “Cebu City Showroom Truth-in-Advertising Ordinance,” the measure aims to strengthen consumer protection in the local real estate sector by regulating the use of fully furnished or dressed-up model units and showrooms that may create unrealistic expectations among prospective buyers.

The ordinance was filed amid concerns that some developers use elaborately staged showrooms that do not accurately reflect the actual condition of residential units that will eventually be turned over to buyers.

In his proposed ordinance, Go cited complaints from homebuyers who allegedly discovered significant differences between showroom units and the actual units delivered to them.

The proposal noted that disparities may involve a property's layout, floor area, finishes, fixtures, furnishings, and other features that buyers initially believed were included in the purchase.

“Real estate developers commonly utilize fully furnished or dressed-up showrooms and model units to market condominium units, subdivisions, townhouses, and other residential properties, which may not accurately reflect the actual deliverable unit to buyers,” the ordinance stated.

The measure further emphasized that local governments have the authority under the Local Government Code to enact consumer protection measures and promote the general welfare of residents.

It also cited provisions of the Consumer Act of the Philippines, which require truthful, fair, and non-misleading representations in the sale of products and services.

If approved, developers would be required to prominently display information showing the actual turnover condition of residential units being sold.

The proposed ordinance mandates the installation of a clear illustration, photograph, or diagram showing the exact turnover condition of a unit, both at the entrance and inside every showroom or model unit.

Developers would also be required to put up a disclosure board containing key information, including:

The actual floor area and layout of the unit;

Materials, finishes, and fixtures included upon turnover;

Items and decorations displayed in the showroom but not included in the sale; and

Optional upgrades and their corresponding costs.

The proposal likewise requires floor area labels to match plans approved by the Department of Human Settlements and Urban Development (DHSUD).

Furniture displayed inside model units must also be proportionate to the actual size of the space and must not be used in a manner that creates a distorted impression of the unit's dimensions.

Beyond physical showrooms, the ordinance also seeks to regulate marketing materials used by developers.

Brochures, flyers, advertisements, websites, and other digital content would be required to clearly distinguish the artist's perspectives from actual turnover photographs. All promotional materials must also carry a disclaimer stating that furnishings and accessories shown are not included in the standard turnover unit unless otherwise specified.

In addition, at least one image or page in the marketing material must present the actual turnover condition of the unit.

Marketing materials must likewise accurately reflect the approved layout, dimensions, and features of the project.

The proposed measure identifies several acts that would be considered violations. Among these are presenting dressed-up showrooms without disclosing differences from the actual turnover unit, using unrealistically sized furniture to make spaces appear larger, misrepresenting a unit's size or finishes, and displaying appliances, fixtures, or amenities without clearly indicating that they are excluded from the purchase.

The ordinance would also prohibit the issuance of misleading advertisements and the refusal to provide buyers access to turnover plans and required disclosures.

Developers, agents, and sales representatives could likewise be penalized for providing false, incomplete, or deceptive information during sales presentations.

Under the proposal, violators would face escalating penalties.

A first offense would carry a P3,000 fine and an order to correct violations within 15 days.

A second offense would result in a P4,000 fine and the suspension of showroom operations for up to 30 days.

For third and subsequent offenses, violators could face a P5,000 fine, suspension of showroom operations for up to 60 days, and referral to the DHSUD for possible administrative sanctions.

Enforcement would be jointly undertaken by the Cebu City Housing Board, the Office of the Building Official, and the DHSUD regional office.

The ordinance authorizes inspectors to conduct random inspections of showrooms and marketing offices and requires developers to provide access to approved floor plans, marketing materials, and disclosure boards upon request.

The proposed ordinance remains pending before the City Council and is expected to undergo public scrutiny during the June 23 hearing.(TGP)