LOCAL governments wanting a share of China's property boom, and a slow property law-making system, are some of the risks an investor in the Chinese property market faces, according to an associate of a Hong Kong-based legal firm. Allen and Overy has just been licensed to practice as foreign lawyers in Beijing, and the firm has close connections with a number of Chinese legal firms. The firm advises non-mainland Chinese clients on investment in China. Chinese land transactions are governed both by national and local laws and, as local laws vary from region to region and practice does not always follow written law, the pitfalls for potential buyers are numerous. In many cases, a lawyer is essential. Compensatory land use rights, which are transferable and hence allow property to be bought and sold, are granted by different levels of government, dependent on the plot size, so care must be taken to verify the grant to use the land is valid. Associate Neal Stender said the ''average person'' should try to verify titles. ''The average person cannot do this, and he shouldn't be there on his own,'' he said. ''He should hire a professional representative.'' There is a lengthy list of permits and licences needed by the developer before he reaches the stage at which he can start selling his property. ''Many Hong Kong people rely on the reputation of the developer and his promises, but a lawyer would recommend a client to see persuasive evidence of the land use grant, and that development had been consistent with the terms of the grant. ''Having set prices, local governments see a property boom, want to profit from it, and sometimes tag on annual payments that were not part of the original grant. ''However, I don't think many Hong Kong people use a lawyer, and even lawyers cannot eliminate the confusion that results from government powers that are enumerated in vague terms.'' Mr Stender said people understood the situation and they were prepared to take risks to obtain the financial benefits. The market was racing ahead of the legal environment in China, he said. The law was slower moving because it was developed by people with political, rather than commercial responsibilities. ''Deals are transacted and tried, more people follow suit, and the practice becomes commonplace before a law is eventually enacted to officially regulate the practice,'' Mr Stender said. Despite the problems in China's developing property market, Mr Stender is excited about the growth and change. ''If the laws governing property continue to follow the market, in the same way as has occurred in other economic areas, then many investors will do extremely well,'' he said.