Surveyors' code can benefit estate agents
Every weekend, evidence of Hong Kong's fiercely competitive property market can be seen along the footpaths around prime real estate. Young adults patrol the streets for hours, waving promotional material at passers-by trying to entice people to view the show flats. And as with every competitive consumer market, the fierce competition can push the boundaries of sales marketing beyond ethical conduct. The Estate Agents Authority, set up in 1997 under the Estate Agents Ordinance, regulates the profession with powers to grant licences and impose fines, but the efficacy of this authority has often been questioned and many have also pointed out its incomplete nature.
The Royal Institution of Chartered Surveyors has now produced a new code aiming to improve governance within the real estate industry and improve the professional standards and social standing of property agents worldwide. One of the core recommendations is the restriction of the agent to represent only one of the two parties, either the buyer or the seller. In Hong Kong, agents continue to represent both and anyone who has entered the property market will have a horror story to tell about their experiences with an estate agent. First-time buyers and sellers are particularly vulnerable to any tactical games and the fact that the agent is simultaneously representing the other party enhances the suspicion that the advice is not always in your interest.
Momentum is now gathering for the proposals by the RICS to be incorporated into Hong Kong law. Members of the RICS must already comply with their guidelines, but the professional body cannot enforce rules against non-members. Self-regulation, by definition, does not work when there is a strong incentive not to abide by the rules.
No doubt, care must be taken to ensure proposals drafted in other jurisdictions are suitable for the Hong Kong context, but this kind of regulation should not be perceived as a restriction upon trade, but as a means to enhance the rights of the consumer, as well as the professional image of the whole industry.