MOVES to licence Hong Kong estate agents will benefit consumers and the industry, says Consumer Council chief executive Pamela Chan Wong-shui. ''When the council has played a hand in regulating other business sectors, the guiding principle has always been the public interest,'' Mrs Chan said. ''And it's possible now to say there is a brighter future for the entire real estate industry.'' The Consumer Council has been a driving force behind the licensing calls and is a member of the Government's special working group on regulation of estate agents. ''When you enter into a property purchase in Hong Kong, you're talking about a substantial amount of money,'' Mrs Chan said. ''For most people it's a once-in-a-lifetime purchase and it's also their most expensive asset. When things go wrong, the repercussions are serious.'' The working group's consultation paper, made public by the Government earlier this month, includes the creation of a statutory governing body, tentatively titled the Estate Agents' Authority (EAA). Other measures include proposals to licence all real estate agents and companies, a code of practice, training for agents, and disclosure rules that would force agents to declare any interest in a property to prospective buyers. The Consumer Council has also been involved in drawing up a new standard provisional sales and purchase agreement form. ''The biggest problem with the range of preliminary sales and agreement forms being used by agents is that they are too binding,'' Mrs Chan said. ''Even with the services of a solicitor, it's difficult to get out of some of these agreements.'' The council also hopes to see the establishment of a safety net for sellers and buyers who suffer financial losses because of agents. Several options are being investigated, including indemnity insurance and a pooled compensation fund to which all licensed agents would contribute. ''Ideally, we would like to see it become compulsory for real estate companies to have a bank guarantee, because this would ensure agents who have caused clients to lose money would be in a position to pay financial compensation,'' Mrs Chan said. The other benefit of this option was that it would penalise only offending agents. ''We want to see an easy redress system in place that can be established as part of the company's operating overheads,'' she said. Commission fees paid by buyers and sellers to real estate agents would not be regulated. ''The council has always been an advocate of free market competition and a uniform fee is a restrictive market practice.'' The number of estate agents in Hong Kong has ballooned in the last few years, as the territory's property market has boomed. Many smaller agencies set up on the back of the boom, manned by staff with little or no professional expertise or qualifications. Complaints of misrepresentation, corruption and other examples of unethical behaviour have multiplied, damaging the industry's reputation and fuelling demands for a clean-up. The Consumer Council has been at the front line of complaints. Between January and June this year, it received 125 complaints of alleged malpractice in the real estate industry, compared with 155 for the whole of 1993. The Independent Commission Against Corruption (ICAC) received 122 reports of corruption last year, more than double the 1992 figure of 56. The new regulatory structure will seek to define the role and obligations of agents and improve standards of consumer protection. The Estate Agents' Authority and the details of its operational brief are now open to a two-month public comment period. The measures are expected to be finalised by the end of the year before being tabled for Executive Council approval. According to Society of Hong Kong Real Estate Agents president Michael Choi Ngai-min, a significant benefit to consumers that will follow the setting up of an authority will be the establishment of a base line for gauging service standards. Mr Choi said: ''In the past there has been no standardisation in the industry but with an authority to police the industry and with new regulations, consumers will know what the minimum standard of service should be.''