Purchase of Properties Outside Hong Kong — Recommendations and the Way Forward
Consumers’ demand for properties situated outside Hong Kong (“POH”) has seen a steady climb in the past 30 years. However, purchasing POH often entails high stakes involving millions of dollars, higher risks and uncertain factors. With a view to safeguarding consumer rights, the Consumer Council reviewed the current legislations and regulations from multiple perspectives to identify weaknesses, conducted analyses to see whether unfair trade practices occurred within the industry. The findings were compiled in the “Purchase of Properties Outside Hong Kong – A Study on Enhancing Consumer Protection” report.
In striking a balance between enhancing consumer protection and sustainable development of the estate agents market in POH, the Council, having thoroughly considered stakeholders’ views and concerns, and based on the findings of the report, puts forward the following 5 recommendations for enhancing consumer protection in the POH market:
On top of the existing requirement, the Council proposed to enhance information disclosure in the 4 key documents provided to consumers. Examples are (i) the due diligence report should include the issuer’s name, the authority and professional qualifications; (ii) the legal opinion must state if any deposit protection mechanism is in place in the place where the POH is situated; (iii) warning statements must include the risks of exchange rate fluctuations; rental return/guarantee may not be honoured, there could be delay in completion etc.; and (iv) sales and marketing materials must include prescribed information.
As for advertisement regulation, apart from clear and legible display of information, there must be no exaggeration or misleading representations. There should be regulations on font size of print advertisements and the period of exposure for digital advertisements in presenting key information like warning statements.
Visit https://www.consumer.org.hk/en/advocacy/study-report/purchase-of-poh to view the full report.