In recent years, there is an increasing number of advertisements in mass and social media on the sale of properties situated outside Hong Kong. In this regard, I would like to remind all potential consumers to pay extra attention to all related information of the property and not to solely rely on the promotional materials provided by the developer or estate agents, especially when they are considering purchasing an uncompleted property situated outside Hong Kong (“UPOH”).
According to the guidelines issued by the Estate Agents Authority (“EAA”), if a licensed estate agent/salesperson (“licensee”) is appointed to handle the sale of an UPOH, the licensee has to provide four important documents to the purchaser before he/she enters into any agreement in connection with the purchase or make any payment in relation to the purchase of the UPOH (whichever is the earlier). These four important documents include (1) a copy of due diligence report(s), (2) a copy of legal opinion, (3) a written warning statement and (4) a sales information sheet.
These documents contain critical information, such as the background of the vendor and the UPOH, property details, the purchaser’s legal position and restrictions as a foreign buyer and the payment terms, etc., providing the purchaser with a better understanding about the property he/she is going to buy and his/her interests in the transaction.
To understand the details of the abovementioned four important documents, please visit the “Smart Advice” section of this website: http://smart.eaa.org.hk/smart-advice/about-purchasing-properties-located-outside-hong-kong/upoh-4-documents/
However, consumers should note that notwithstanding the fact that licensees must comply with the guidelines, licensees cannot guarantee the completion of an uncompleted property or the investment and/or rental returns promised by the developer. Furthermore, it is not the EAA’s function to assist consumers in recovering any losses suffered from the transaction. They will need to negotiate with the developers directly and seek their own independent legal advice on pursuing against any party for any kind of compensation. That said, consumers should be sceptical about any claims or promises about investment and/or rental returns of properties, especially if they are purchasing an UPOH.
The process of purchasing properties situated outside Hong Kong is much more complicated than the process of purchasing local properties. Consumers should be extra vigilant and study all related information before making a purchase decision and seek advice from professionals if in doubt.
Chief Executive Officer
Estate Agents Authority