LCQ22: Purchase of properties outside Hong Kong
It has been reported that in recent years, there have been problems with quite a number of Hong Kong people's transactions of properties outside Hong Kong (POH), such as the conditions of the properties being inconsistent with the descriptions in advertisements or publicity materials, and the uncompleted POH ending up unfinished. In this connection, will the Government inform this Council:
(1) of the total number of complaints received by the authorities since 2021 about the sale of POH, with a breakdown by the government department/organisation which received the complaints and the country/region in which such properties were located;
(2) whether the authorities will consider taking a targeted approach to follow up those complaints relating to countries or regions with more complaints, such as taking the initiative to contact the Mainland authorities to examine the feasibility of formulating a mutual legal assistance framework, or exploring co-operation in investigation with the police of the United Kingdom; and
(3) of the follow-up work carried out in respect of the complaint cases mentioned in (1); apart from the current requirement to include risk warning statements in advertisements for the sale of POH, whether the authorities will consider further stepping up the relevant publicity work, so that members of the public can clearly know the risks involved in purchasing POH?
Having consulted the Commerce and Economic Development Bureau, the Constitutional and Mainland Affairs Bureau (CMAB), the Financial Services and the Treasury Bureau, the Security Bureau, the Department of Justice and the Estate Agents Authority (EAA), the consolidated reply to the question raised by the Hon Chan Han-pan is set out below:
(1) The number of complaints received by government departments/organisations which involved properties outside Hong Kong (POH) during 2021 and end of October 2022 are set out at Annex. Since the complainants could lodge complaints to different departments/organisations and the departments/organisations could refer individual case(s) to another department/organisation, the complaints or cases received by different departments/organisations may involve the same cases.
(2) The EAA has been exchanging information and co-operating with relevant non-local organisations as needed. Furthermore, the Housing Bureau has been communicating closely with the EAA, and would refer to the CMAB cases that may involve real estate developers or agents in the Mainland as identified by the EAA during its investigation of cases. The CMAB may then refer the cases to the Mainland authorities timely.
One of the main functions of the five Mainland Offices of the Hong Kong Special Administrative Region (HKSAR) Government (namely the Beijing Office and the Hong Kong Economic and Trade Offices in Guangdong, Chengdu, Shanghai and Wuhan) is to provide assistance to Hong Kong residents in distress in the Mainland. If the Hong Kong residents seeking assistance wish to make complaints or appeals to the Mainland authorities as regards properties in the Mainland, the Mainland Offices will refer their cases to the relevant Mainland authorities on request. In addition, the Hong Kong Economic and Trade Office in Guangdong has commissioned an organisation to provide free legal advisory service to Hong Kong residents in need through a telephone hotline or by arranging Mainland duty lawyers to meet the assistance seekers to provide preliminary advice on Mainland related legal matters.
In respect of judicial assistance with the Mainland, the Supreme People's Court and the HKSAR Government signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region (Arrangement) on January 18, 2019. The Arrangement seeks to provide for a more comprehensive mechanism for reciprocal recognition and enforcement of judgments in civil and commercial matters, covering matters which are regarded as civil and commercial under both the laws of Hong Kong and the Mainland, including contractual disputes. The Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Bill for implementing the Arrangement in Hong Kong was passed by the Legislative Council on October 26, 2022. Upon the implementation of the Arrangement, parties may apply in Hong Kong or the Mainland to enforce judgments made by the court of the other place on civil and commercial matters, thereby doing away with the need for re-litigation of the same disputes.
The Police will contact overseas law enforcement agencies to exchange intelligence and request assistance in investigation if necessary, and take appropriate actions.
(3) According to the Estate Agents (Exemption from Licensing) Order (Cap. 511B), a person shall be exempted from the requirement for obtaining an estate agent's licence if he/she handles exclusively POH; and states in all his/her documents (including pamphlets and brochures) and advertisement that he/she is not licensed to deal with any property situated in Hong Kong. However, if the company or individual concerned performs estate agency work for properties both within and outside Hong Kong, that company/individual is required to obtain a licence issued by the EAA. The EAA had issued a practice circular in December 2017 to provide guidelines to estate agent licensees on the practices and measures to be adopted in handling the sale of uncompleted properties situated outside Hong Kong. These practices and measures include, amongst others, due diligence measures and requirement on providing important sales documents. The guidelines have taken effect since April 1, 2018. If a licensed estate agent/salesperson is suspected of breaching the Code of Ethics and the practice circular issued by the EAA in the course of the sale of POH, the EAA will investigate the matter.
Moreover, the Police, the Customs and Excise Department (C&ED) and the Securities and Futures Commission (SFC) have all along conducted investigations and taken enforcement on complaints or cases involving POH under their respective purview. The Police handles requests for assistance involving non-local property investment deception; the C&ED handles cases with possible offence under the Trade Descriptions Ordinance (Cap. 362); and the SFC handles complaints which involve collective investment schemes with non-local real estates. Relevant departments and organisations have conducted/are conducting investigations and have taken/are taking appropriate follow-up actions on the cases.
Public education is of utmost importance in effectively reducing the chance of customers from sustaining losses in the purchase of POH. The EAA has strengthened promotion and education efforts to remind consumers through various medias (including the consumer education thematic website: outsidehk.eaa.org.hk) to understand the relevant risks and the issues that they should pay attention to before deciding to purchase POH. The EAA will continue to enhance public education efforts in the coming year to raise consumer awareness, including further promotion of its slogan – "To buy or not to buy off-plan properties outside Hong Kong? Assess the risks before you buy!". In addition, the Consumer Council has from time to time reminded the public of the risks involved in the purchase of POH, for example, by setting out extracts of complaint cases in the CHOICE Magazine issued by it and relevant tips on its website.
The CMAB and the five Mainland Offices have been strengthening public education through different channels with a view to enhancing the public's understanding of matters related to property purchase in the Mainland. The measures taken include publishing the Practical Guide for Hong Kong Residents Living in the Mainland, a booklet on living in the Mainland covering practical information about property purchase; providing a link to the webpage of the EAA containing practical information on the purchase of POH on the websites of the Mainland Offices and the CMAB's dedicated website on the Guangdong-Hong Kong-Macao Greater Bay Area (GBA); and publishing articles in the CHOICE Magazine of the Consumer Council to remind citizens of the points to note when purchasing property in the Mainland. The CMAB has recently further stepped up the promotion and public education efforts by releasing a new round of information on property purchase in the Mainland through the website of the CMAB, dedicated website on the GBA, and websites and WeChat public platforms of the Mainland Offices, etc, in October 2022. In addition, the CMAB also published a new article in the CHOICE Magazine in November 2022 to provide the latest relevant information.
Ends/Wednesday, November 30, 2022
Issued at HKT 16:25
Issued at HKT 16:25