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The estate agency business has developed a new normal in recent years under the impact of the coronavirus pandemic.

Purchasing property outside Hong Kong has become increasingly popular among Hongkongers in recent years. Whether the purchase is for investment or emigration, to safeguard their own interests, buyers should study all related information and seek independent professional advice before making a decision.

The government has implemented a new tenancy control regime for subdivided units under Part IVA of the Landlord and Tenant (Consolidation) Ordinance, which came into effect on 22 January this year.

In order to comply with the requirements of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), estate agents must conduct “customer due diligence” (CDD) to identify and verify the identity of their customer when handling the sale and purchase of a property. The Estate Agents Authority (EAA) issued a relevant practice circular on this for the estate agency sector back in 2018.

Risks exist in the purchase of properties where there was a previous assignment at nil consideration or a deed of gift, as the transaction could be set aside should the previous owner go into bankruptcy or liquidation within five years of the or winding up petition.

When listing a property or looking for one for sale, purchase or lease, both the vendor/landlord and the buyer or tenant will most likely consider the relevant market data. Such information could affect their decision making.

Prospective purchasers are reminded to carefully consider their own financial situation before making a property purchase decision. In most situations, whether a property transaction can be completed depends on the amount of mortgage loan that could be obtained.

There was a recent media report about a purchaser’s mortgage application being rejected by local banks as the property had unauthorised building work. While some properties might look attractive due to a redesign or modification of their original layout plan, purchasers should be wary of the risks if they involve illegal alterations. They could be in breach of the city’s Buildings Ordinance.

The recent boom in the first-hand residential property market has helped contribute to an increase in the number of transactions in secondary residential properties. Media reports have shown prospective purchasers queuing up to inspect properties.

The sale of new residential developments remains the focus of Hong Kong’s property market this year. In this regard, consumers should not solely rely on promotional materials and advertisements when considering a purchase of a first-hand residential property, particularly those posted on social media or lamp posts. They should always be sceptical about promotional messages.

Last month, the Hong Kong Monetary Authority (HKMA), for the first time in more than a decade, raised the applicable loan-to-value ratio cap for mortgage loans on non-residential properties from 40 per cent to 50 per cent, in a bid to boost the city’s moribund property market weighed down by a recession and coronavirus pandemic.

As the first-sale residential property market has shown recent signs of a recovery, estate agents are once again eagerly promoting new developments to their clients and the public via different channels. Consumers might have come across advertisements issued by estate agents through the internet or distribution on the street. The Estate Agents Authority (EAA) is, as always, concerned about non-compliances in this area.

Property transactions in Hong Kong’s primary and secondary markets have been declining due to the coronavirus pandemic, and the prospect of a near-term revival is not promising.

The real estate market thrives on transparency and trust, and agents must not allow any personal interest to conflict with those of their clients.

A land search is an important document in a property transaction. It provides the searcher with essential information regarding the property, such as its address, ownership details and encumbrances, if any, that are registered against it.

When handling the transaction of second-hand properties in Hong Kong, estate agents may arrange for clients to enter into a provisional agreement for sale and purchase (PASP) or provisional tenancy agreement (PTA).

Before deciding to rent a property, a prospective tenant should pay attention to whether it is being leased by the landlord or sublet by the principal tenant, as subletting may involve complicated issues and a subtenant’s rights might not be protected.

According to the Buildings Ordinance, additions or alterations to buildings made without the prior approval of the Building Authority may constitute unauthorised building works (UBW) and it may issue an order requiring the property owner to demolish/alter the UBW within a specified period.

I would like to share a case regarding stamp duty liability so as to remind both property agents and consumers of the importance of understanding the types and amount of stamp duty payable before entering into any provisional agreement for sale and purchase.

I would like to share a case concerning a property advertisement with misleading or wrong information.