The Law Reform Commission's report last week that calls for legislation regarding Hong Kong sales of uncompleted overseas properties comes at a rather delicate moment. It was just a couple of weeks ago that thousands of disgruntled local buyers of ill-fated mainland properties took to the streets in protest to gather public support for their claims and to seek compensation from developers and estate agents. Some representatives of the victims even made submissions to the Chinese Government in a bid to ensure their cases would be taken care of. The Law Reform Commission's report proposed holding estate agents responsible for giving misleading or inaccurate information about overseas properties and requiring foreign developers to engage licensed agents for sales. Since China is the most significant source of overseas properties for Hong Kong residents, the effect on agents specialising in sales of China properties could be substantial. Not surprisingly, the report's suggestions drew immediate attacks from local agents. According to the commission, making licensed estate agents primarily responsible for providing sales information would overcome many of the enforcement problems involved in regulating sales descriptions of overseas property. Hong Kong agents would be given a monopoly over the sale of uncompleted overseas property in exchange for providing sufficient and accurate sales descriptions to buyers. In the commission's view, it was not unreasonable to expect estate agents, often the purchasers' only source of information about overseas projects, to ensure that the sales information was accurate. At first glance, it seems quite logical and reasonable to penalise agents for failure to provide accurate information about properties that they handle. What agents are disconcerted about is the proposal making them liable to fines or even imprisonment. The agents argued it was the developer who should be responsible and liable for charges and penalties if purchasers were victimised. But charging developers of overseas properties would be difficult because most are foreign companies and not subject to Hong Kong laws. Some analysts suggested that lawyers also be held accountable for their involvement in transactions. The Law Society has, in fact, received a number of complaints over property deals in China. Among the accusations are complaints against solicitors who did not help clients get their money back from ill-fated projects. Others cite documents which have been changed by solicitors after being signed and solicitors who failed to warn buyers they were signing an unfair contract. One analyst said: 'Estate agents cannot shirk their responsibility. 'But lawyers should be held responsible, too. 'For instance, agents may not be as knowledgeable as lawyers about China's laws and regulations regarding the real estate industry in the country. 'It is not fair to only penalise agents. It sounds like agents will take all the blame if developers cannot be located when seeking compensation. Sometimes, buyers have more trust in lawyers than in agents.' However, some legal practitioners said Hong Kong solicitors acted only to testify that documents were not forged and not as legal advisers, as they do in conveyancing in Hong Kong. The commission's report made no mention of the role of lawyers or their responsibilities in sales and transactions of overseas property in Hong Kong. Thomas Leung Moon-keung, secretary of the Law Reform Commission flats sub-committee, said the proposed legislation was not directed against estate agents because developers would also be liable. He said the report was aimed at reinforcing consumer protection before provisional purchase agreements were signed. Lawyers played a later role, which would be up to the Law Society to deal with through self-disciplinary measures. Some analysts said the willingness of lawyers to accept jobs relating to an overseas property would add credibility to the project. 'Lawyers cannot stay aloof. At the same time, consumers cannot put all the blame on other people. 'They should be aware of the potential risks and be responsible for their acts,' one analyst said. The proposed legislation could have a profound impact on the estate agency industry. Penalties should make agents more careful in accepting jobs from developers and verifying sales information. Analysts said some agents could be scared off and that additional fees could be passed on to consumers in the end. Together with the proposed estate agents bill, which seeks to license local agents, the Law Reform Commission's report would probably make it more difficult to operate an estate agency. At the same time, it will certainly improve the industry's professional standards. The commission's proposals cover detailed information that should be put in sales brochures, such as the saleable area, date of completion for the property and financing arrangement. It was also proposed that the Government should undertake a study to find out what appropriate measures could be taken, including stake holding, trust accounts, insurance or bonds put up by developers, to protect deposits and instalments in the event of delayed completion or project failure. The proposed legislation and recommendations on overseas flat sales are open for public consultation until November 18.