Concrete Analysis | Buyers beware: investors of real estate assets beyond Hong Kong should be aware of risks, rules and complications
- Consumers should study all related information before making a purchase and be extremely vigilant to protect their own interests
- Consumers should have greater protection if they appoint licensed estate agents when purchasing non-local properties
Purchasing properties situated outside Hong Kong, particularly uncompleted ones, is complicated and full of risks.
Consumers should study all related information before making a purchase decision and be extremely vigilant when investing in these properties so as to protect their own interests.
In Hong Kong, there is no legal requirement that the transactions of real estate properties, wherever situated, must be handled by licensed estate agents.
In view of the increasing number of Hong Kong investors purchasing non-local properties through licensed estate agents in recent years, the Estate Agents Authority (“EAA”) issued a Practice Circular (No. 17-03) a few years back setting out relevant guidelines on the sale of uncompleted properties situated outside Hong Kong (“UPOH”) for licensed estate agents to observe, in the hope to offer some protection to consumers.
The guidelines include requiring licensed estate agents to obtain a due diligence report on the vendor and the related UPOH, and a legal opinion issued by a lawyer practising in the place where the property is situated on whether there is any form of restrictions imposed on foreign purchasers; and to observe requirements for the issuance of advertisements and provision of sales information related to the UPOH.
