In recent years, there has been a rising trend of people in Hong Kong purchasing properties situated outside Hong Kong. Compared to purchasing properties in Hong Kong, purchasing properties outside Hong Kong is more complicated, as regulatory regimes and taxation systems differ from one place to another. News about the issues arising from Hong Kong people purchasing uncompleted properties situated outside Hong Kong (“UPOH”) has also attracted a lot of public attention, and the Estate Agents Authority (“EAA”) has received a number of related complaints.
In view of this, the EAA issued a new practice circular in December 2017 regarding the sale of UPOH to enhance the professionalism of the estate agency trade and protect the interests of the public by providing licensed estate agents and their management detailed guidelines on certain important issues when handling the sale of UPOH. The circular will take effect on 1 April 2018.
According to the Estate Agents Ordinance, a person who engages in estate agency work exclusively in relation to properties situated outside Hong Kong is not required to obtain a licence issued by the EAA and hence, his conduct is not regulated by the EAA. That said, consumers are recommended to appoint licensed estate agents to purchase properties situated outside Hong Kong as they are regulated by the EAA and must comply with the Estate Agents Ordinance and our guidelines, which allow the consumers to have better protection.
I would like to remind consumers some important points to note when they purchase UPOH through licensed estate agents. Under the requirements of our new practice circular that will become effective from 1 April 2018, licensed estate agents should provide the following documents to purchasers before they enter into any agreement or make any payment in relation to the purchase of the UPOH (whichever is the earlier): (a) the due diligence report(s) regarding the vendor and the UPOH; (b) a copy of the legal opinion on material information; (c) a written warning statement; and (d) a sales information sheet that contains all the necessary information required by the EAA. There are also other requirements that a licensed estate agent must comply with under this new practice circular. Prospective purchasers are welcome to read the details on the EAA website (www.eaa.org.hk).
A public seminar about the points to note when purchasing properties situated outside Hong Kong will be held by the EAA on 10 March 2018. Members of the public who are interested are welcome to attend. Registration is now open at: www.eaa.org.hk/2018seminar.html
Chief Executive Officer
Estate Agents Authority