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China Cracks Down on Dishonest Real Estate Agents

According to a joint announcement by seven Chinese authorities, real estate agents in China are required to perform due diligence checks to ensure the truthfulness of information of properties for sale or lease, and must not force their clients into accepting unwanted financial services. A blacklist of dishonest agents will be introduced, barring intermediaries and persons found to be seriously dishonest from entering the sector.

The Ministry of Housing and Urban-Rural Development, National Development and Reform Commission, Ministry of Industry and Information Technology, People’s Bank of China, State Administration of Taxation, State Administration for Industry and Commerce and China Banking Regulatory Commission have recently issued the Opinions on Strengthening the Management of Real Estate Agents and Promoting the Sound Development of the Industry.  In view of the misconduct of some of the real estate agents, such as disseminating false information of properties for sale or lease, concealing information such as the fact that a property has been pledged as collateral, and imposing mandatory processing fees on their clients, the Opinions require real estate agents across the country to introduce a system to fully verify the information of properties for sale or lease. They should also compile property particulars, which include details of the verification procedure, the reference number of the intermediary services contract concerned, and the location, area, ownership, list price, management service charges and images of the property concerned. For properties sold or leased, agents should remove the information concerning their availability for sale or lease within two working days from the date the sale and purchase agreement or lease contract is signed. 

More and more real estate agents enter into partnerships with financial institutions nowadays. According to the Opinions, intermediaries assisting their clients to obtain housing loan must not thrust upon their clients unwanted financial services. Meanwhile, a real-name registration system for persons engaged in the real estate agent sector should be implemented nationwide as soon as possible.

In addition, local authorities should have a “blacklist” database system in place to identify seriously dishonest agents and personnel, and prohibit them from setting foot in the market and the profession through joint measures.

For details of the Opinions in Chinese, please see: http://www.mohurd.gov.cn/zxydt/201608/t20160817_228555.html

Content provided by Picture: HKTDC Research
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