Practice Circular on the sale of uncompleted properties situated outside Hong Kong has come into effect

2024-07-26

Purchasing uncompleted properties situated outside Hong Kong (“UPOH”) poses great uncertainties, particularly when buyers are unable to physically inspect these properties before completion of the transaction. It will be better for consumers to appoint licensed estate agents to handle the relevant transaction as they are regulated by the Estate Agents Authority (“EAA”). Recently, the EAA updated its guidelines for licensed estate agents to follow when handling the sale of UPOH and some of the requirements will make it easier for consumers to distinguish between licensed and unlicensed agents.

The new Practice Circular (No. 23-02) has taken effect on 1 July 2024. Among the requirements, the said circular stipulated that when preparing advertisements or promotional materials to promote UPOH, licensed estate agency companies must take all reasonable steps to verify the accuracy of the information in such advertisements or materials at the time of issuance; and before issuance, obtain the vendor’s express endorsement in writing of the accuracy and completeness of the information contained therein. Licensed estate agency companies must not include in advertisements or promotional materials prepared, issued or distributed by them words which give the impression that purchasing UPOH is “safe”, “low-risk”, or “risk-free”, or that buyers can obtain “fast”, “easy”, or “high” yields or returns with “little” or “no” risk.

Additionally, licensed estate agency companies must ensure that any UPOH advertisements or promotional materials prepared, issued or distributed by them must contain the following prominent and legible information: (a) the estimated completion date of the development as confirmed by the vendor; (b) the business name as stated in the relevant statement of particulars of business of the estate agency company concerned; (c) the number of the licence or the relevant statement of particulars of business of the estate agency company concerned; and (d) the EAA’s bilingual caution to consumers: “To buy or not to buy non-local off-plan properties? Assess the risks before you buy! 境外樓花買唔買？ 計過風險先好買！”.

Recently, the EAA conducted a public seminar in Cantonese titled “Risks and Opportunities in Purchasing Property Situated Outside Hong Kong” where speakers shared their views and experiences of purchasing UPOH. Interested parties may watch the highlights of the seminar on this website.

Ruby Hon
Chief Executive Officer
Estate Agents Authority