Effective 1 May, real estate agencies in Hong Kong could have their licenses permanently revoked if they violate new regulations on the sales of primary residential properties, according to the Estate Agents Authority.
The authority has updated its guidelines for property sales in order to prevent the recurrence of cases similar to The Icon scandal.
According to the latest regulations, sales agencies are now responsible for training their staff who will manage primary market sales in accordance to the law and fpr appointing a controller that will supervise employees involved in promotional activities.
Agencies are also mandated to provide pre-sale briefings to their staffs before any promotional activities and take practical measures to ensure that the staffs are following the guidelines.
“The problems associated with the new development The Icon at Mid-Levels in January this year aroused much concern in the community,” according to William Leung Wing-cheung, Chairman of the EAA’s practice and examination committee.
“We may consider revoking agencies’ licenses if they violate the new rules.”
The Icon’s developer, Wingfoong International, and its agent, Centaline Property Agency, allegedly failed to provide home buyers with accurate sales brochures, which resulted in buyers receiving unfinished flats.
Wingfoong bought back the units at prices 20 percent above the original selling price.
Under the new regulations, real estate agencies will have to obtain written permission from developers if they want to produce promotional material for projects, in order to validate the accuracy of the information.
Hence, sales agents are not permitted to produce their own price lists and sales brochures.
The authority added that promotional materials produced with the approval of the developer, will ensure that agencies are not held liable for mistakes.
Vincent Chan Kwan-hing, Executive Director of Midland Holdings, said the new rules come as good news for home buyers.
“The new rules help to lift market transparency and are also good for the healthy development of the market,” Mr. Kwan-hing said.