It was a pleasure meeting you and your family again at the dinner yesterday. You told me that you were planning to buy an off-plan shop and acondominium in London, which can be used as an investment and a temporary home for your son who will go there to study soon. We did not have much time discussing this topic over the dinner table, but as the Chairman of the Estate Agents Authority, I would like to share some advice with you so that you would not commit mistakes others have made.
In recent years, the trend of Hong Kong people purchasing non-local properties is on the rise. The risk they face is high especially when purchasing uncompleted properties situated outside Hong Kong.
There is a pattern for bad property investment experiences. First, the property concerned is uncompleted. Secondly, the purchase transaction is closed on remote basis with inadequate due diligence done by the buyer. Thirdly, attractive incentives or investment returns are offered by the foreign developer. When these three factors come together, it is highly likely that the investment would turn sour.
Of the 65 complaint files opened by the Authority this year, most of them were related to uncompleted properties Some of them were about misrepresentation on the location of the properties or the identity of the developer, while some were about misrepresentation on the rental return of the properties.
Most consumers don’t realise that there is currently no relevant legislation or regulations governing the sale of non-local properties in Hong Kong. Selling properties situated outside Hong Kong is not under the purview of the Estate Agents Authority. A person or companyengaging in estate agency work exclusively in relation to properties situated outside Hong Kong is exempted from the requirement ofobtaining a licence from the Estate Agents Authority.
The risk however could be alleviated if a licensed estate agent is involved in the transaction. This is because he is required to comply with the Estate Agents Ordinance, its subsidiary legislation, Code of Ethics and otherguidelines issued by the Estate Agents Authority or else he may be subject to disciplinary actions by the Authority.
According to a practice circular issued by the Authority in 2017, estate agents are required to obtain a report issued by a reliable authority confirming the vendor’s source of funds or financial arrangement and to provide key information of the development such as the location, tenure, current ownership, subsisting encumbrances etc.
Besides, estate agents must obtain a legal opinion to ascertain whether there are restrictions on foreign ownership before they participate in the sale or the promotional activities and provide a copy of the same to the purchaser, together with a written warning statement and a sales information sheet, before they enter into any agreement with the purchaser.
Moreover, estate agents must verify the accuracy of the information contained in the advertisements and obtain the vendor’s express endorsement in writing before issuance. They must also advise purchasers to seek independent professional advice on the types and amounts of taxes and mortgage terms regarding their own case.
In spite of the above guidelines, consumers should note that the functions of the Estate Agents Authority is to regulate the practice and conduct of licensed estate agents, and discipline those non-compliant ones. It is not the Authority’s function to assist consumers in recovering their loss suffered from propertytransactions. Even if sanction in the form of a fine is imposed by the Authority on non-compliant licensees, the fine will go to the government and not the consumers. Consumers should be wary that they need to negotiate with the developers direct or seek independent legal advice by themselves in pursuing any loss against any parties.
Thus, consumers are strongly advised to do their own homework and consider thoroughly the risks they face before making a purchasedecision. They must consider various factors such as location of the property, property details, payment terms, financing arrangements, and purpose of their investment etc. Consumers may visit the website at smart.eaa.org.hk or obtain a copy of the booklet titled “Purchasing Non-local Properties Be SMART” from the Authority to learn more information about purchasing properties situated outside Hong Kong.
Though licensed estate agents are better regulated than unlicensed ones, consumer should still bear in mind that even if the transaction is handled by licensed estate agents who fulfill all the relevant guidelines in their practice, there could still be potential risks in buying properties situated outside Hong Kong, particularly the uncompleted ones.
For example, the developer may fail to complete the construction of the properties on schedule or may even fail to complete it at all. Making a trip to inspect the site and consult local professional is perhaps costly and time consuming, but it is a major investment decision worthy of the hasslesinvolved.
Another popular category of complaints is about rental return. A developer's promise of investment return is skeptical. How can itrealistically forecast the return before the development is completed, occupied, or even in operation? If the developer guarantees an attractive return, it is either taking a major business risk or is not serious with the offer.Choosing to believe the guarantee at face valueis again a risky decision.
The Estate Agents Authority has handled a real case of similar nature. A complainant purchased a shop in an uncompleted shopping mall in the Mainland and concurrently signed a “rent-back agreement” with the management company. According to the agreement, the management company would handle the leasing of the shop for the purchaser and pay him interest and rent regularly. After receiving a few rental payments,the management company stopped its payment. The purchaser then went to the shopping mall site to find out that the management company had closed down and the construction work had not yet started. A lesson learned from this case isthat consumers should consider carefully whether the guaranteed return offered is legally protected and could genuinely be honoured.
In conclusion, purchasing uncompleted properties situated outside Hong Kong is complicated and risky. There is no guarantee thatuncompleted properties would be completed in time or even completed at all. The utmost importance is to make correct decisions because taking legal actions to recover losses iscomplicated as it concerns laws of different jurisdictions. Hence, apart from relying on the professional service provided by licensed estate agents, consumers should consult their own legal advisor for their own protection.
I hope you will find the above tips useful in making your property purchase decisions. Property investment can be rewarding and therefore it is absolutely worthy of your efforts,diligence, and serious consideration. No matter how much you trust your agent and how reputable the developer is, I strongly suggest that you take a trip to inspect the properties you have in mind before you sign your name above the dotted line.
To the people of Radio Television Hong Kong, from past to present, both Chinese and English, on radio or television and of course the new media of the Internet and mobile, this is a letter to thank you all — to those I have the good fortune to have met or worked with as well as others I have not — for your dedication, steadfastness and utter professionalism.
For Hongkongers of my generation, we literally grew up with RTHK. We watched “Under the Lion Rock” and witness the courage and compassion of grassroots Hong Kong citizens as they struggled with daily hardships and injustice — yet coming through with a sense of what’s right and what’s wrong, defined by love and decency, becoming what we today would consider to be the spirit of Hong Kong, and our core values, including freedom, equality, charity and integrity.
And so we watched “When We Were Young”, well, when we are really young children, in the 1970s. Then, as teenagers, we listened and sang along to music from the 1980s golden age of Hong Kong pop, played by Radio Hong Kong deejays in the afternoon. And as we grew up together, we followed the beat of the city on “Hong Kong Connection” and “City Forum”, as we tried to make sense of a more complicated Hong Kong.
And yes, I have had the good fortune of working with a great many RTHK programs, radio and TV, as a guest, interviewee, co-host, or like what I am doing now, occasionally contributing to Letters to Hong Kong. In the mid-1990s I even had the opportunity to work with a bunch of great people from inside and outside of RTHK to bring its live radio programs to the Internet, letting Hong Kongers all over the world connect with their home city. In my capacity now as a legislator, naturally I have more interactions with the journalists of RTHK, a group that I find to be among the best in Hong Kong.
But it has also become clear to me that, since the handover, the role of RTHK has increasingly come under scrutiny and pressure, by those who want to see it turned into a mouthpiece for authorities. Ever since its establishment in 1928, RTHK has always been an exemplary public broadcaster. But it was never properly commissioned and set up as a statutory body or corporation for public service broadcasting. It remains just a government department, currently under the Commerce and Economic Development Bureau.
When the public broadcaster is just a department in government, being assigned with an annual budget decided by the government, how does RTHK find its balance from being controlled by the government through budget and policy on the one hand, yet maintain its editorial and creative independence on the other? This is exactly where successive administrations of the Hong Kong SAR government are finding themselves at odds with RTHK, which is already functioning well as a mature, professional, globally recognised and acclaimed public broadcaster. By adopting the mentality of the Central Government and its ruling Party, the Hong Kong SAR government wants any critical voices silenced.
This explains why RTHK has come under persecution from none other than the SAR government itself, with it political cronies, as Beijing interferes with the affairs of Hong Kong more and more blatantly and directly, we even heard news about alleged directives from the director of the Hong Kong and Macau Office in Beijing to the Chief Executive in Hong Kong telling her to “rein in” RTHK.
Sadly, since before 2009, RTHK has been looking for a new home for its studios and offices, to replace its antiquated and insufficient facilities and infrastructures, but to no avail. The pro-establishment vetoed a previous attempt by the government to fund a new RTHK broadcasting building in Tseung Kwan O in early 2014, and the government never came back with a new proposal. In the meantime, RTHK has been tasked with additional responsibilities of two new digital TV channels, as well as for a while, digital audio broadcasting and one analog TV channel.
So, more work, more responsibilities, but not enough new resources, with no commitment for future development in sight. And then the government’s communications regulator allows the commercial broadcasters — TVB and NowTV — to stop showing RTHK TV programs on their airtime. What next? The very government bureau that puts a limit on RTHK’s funding complained about the “low ratings” of RTHK’s digital TV channels, in spite of the fact that even this criticism is largely unfounded as it conveniently overlooks the success RTHK has achieved in its new media services, including the high level of online reach via YouTube, Facebook and its mobile apps. So all these talks about low ratings are largely an excuse to cap or cut RTHK’s budget, to force it to become more obedient, editorially less independent and less critical, making it act more like the government’s mouthpiece in some authoritarian countries. RTHK’s critics picked on “The Headliner” — a long-running weekly show taking a satirical view on our current affairs and politics — and “The Pulse”, an English weekly news magazine, in particular over a recent interview with a World Health Organization official, where the programme host probed the WHO official about Taiwan. A journalist’s completely neutral and open-ended question somehow crossed the red line of Beijing. Some questions cannot even be asked.
Last week, the Education Bureau suddenly ordered RTHK to return the ETV facility on Broadcast Drive, on short and sudden notice — due to the termination of RTHK’s production of educational TV programs for EDB. Is this the way government departments deal with each other, without even the most basic courtesy and consideration? It is clearly yet another lesson the administration wants to teach RTHK, in line with calls from so many pro-establishment legislators to “punish” RTHK. It is both petty and vindictive.
But I know the people of Hong Kong are with you, all of you at RTHK. We can see that this is more than just a job for you. This is a fight for not only Hong Kong’s treasured tradition of public service broadcasting, but also the professionalism and core values of Hong Kong that you are protecting, that our authorities are trying to manhandle and ultimately destroy. In particular for the journalists at RTHK, we know you are fighting a tough battle with the rest of Hong Kong’s frontline journalists against the flood of misinformation often stemming right from the authorities themselves, and facing more and more senselessly violent abuse and physical dangers from the police force on the frontline. What I want to say is, this is not just your fight, it is for us all Hongkongers. Editorial independence vs propaganda, freedom vs censorship.
So, a lot of people ask me, what can we do now, for RTHK. Well, we can continue to tune in, listen and watch like before, as well as view, like and share online. Hundreds of thousands of us have signed online petition to support RTHK and urge the Director of Broadcasting to stand firm. These are the least we could do. And we will continue.
But we must also counter the attacks on RTHK in all ways we can, so that everyone in Hong Kong will see how divisive and politically motivated these attacks are, and how they will rob us of Hong Kong’s best, sinking us to a level unworthy of being a global city that we thought we were.
We must also remind everyone in Hong Kong, how ridiculous it is for our government, and indeed the same Commerce and Economic Development Bureau to propose to give billions of dollars to bail out an Ocean Park whose bottom has fallen out, yet at the same time hang RTHK out to dry. If we have to pick one of the two, gosh, the people’s choice is clear. It must be our RTHK.
To our friends at RTHK, thank you for standing right next to the people of Hong Kong all these years. And we will stand with you.