Property agents’ watchdog vows harsher penalties on errant brokers as it aims for orderly sales environment
The Estate Agents Authority will no longer tolerate bad behaviour as it looks to stiffen penalties on salesmen and their employers, including revoking their trade licence
The property market in Hong Kong is dominated by the sale of new homes in recent years with most of the transactions conducted by property agents. Crowds of salesmen are commonly seen at the sales sites, and occasionally there are reports of salesmen fighting as they look to corner clients.
Not all of these salesmen are licensed and some of them are unlicensed employees or interns of property agencies. The sales sites of first-hand homes hence have been seething with a mix of licensed and unlicensed salesmen, which has inevitably led to chaos.
The Estate Agents Authority (EAA) is aware of the situation and has been working to remedy it.
As the regulator of property agents in Hong Kong, the EAA is very concerned about their conduct in promoting new flat sales. We have issued relevant practice circulars in the past for the trade to comply with and I have also repeatedly reminded them to demonstrate self-control and discipline. That said, chaotic scenes and even fights still take place from time to time.
As well as strengthening compliance checks at sales sites, the EAA has worked on different measures to find ways to improve the situation. Earlier this year, the EAA reached a consensus with 32 property developers and issued a charter on the sales of first-hand properties. It prohibits unlicensed employees of property broking companies from taking part in promotions, and commits to take punitive measures against property agents and their companies for any unruly behaviour.
According to the charter, developers have pledged to provide consumers with a desirable sales environment. They will not allow any unlicensed property agents to participate in any promotional or sales activities near the sales sites. They will also strongly condemn any unruly, impolite, harassing, improper or violent behaviour and will take strong punitive action against the property agencies involved and their employees, such as imposing fines, suspending them and/or their employees from conducting sales activities at the sites.
After the launch of the charter, the order at the sales sites of new properties has significantly improved. Having said that, the EAA in August discovered a number of unlicensed employees of two property agencies outside a sales site promoting the development. The EAA immediately contacted the developer, who fined the errant companies concerned. The EAA is also following up on the two cases and will sanction their management if they are found to have breached the EAA’s guidelines.
The incident showed that despite the charter not being legally-binding, the developers are committed to honouring their promises and that they will not tolerate any unruly behaviour by the property agents.
While I understand that competition in the industry is fierce, we should note that both the year-on-year increases in property transactions and transaction value in the first half of 2018 are higher than that in the number of agents. Therefore, competition is certainly not an excuse for bad behaviour.
In addition, the EAA is stepping up inspections studying the possibility of further increasing sanctions on non-compliant property agents and their companies. According to the EAA’s current policy, once a licensee is found to have been involved in violence during work, his licence will be revoked and he is not granted a new one for at least three years. The EAA’s sting committee is studying to extend it further and plans to announce its decision in due course.
As regards property agencies, if they have been found to have failed to establish a proper system to manage the conduct of their front line staff at sales sites, they too will be disciplined.
The maximum penalty imposed in this case would be revoking the licence of the company licensee involved.
Ruby Hon Yuen-ping is chief executive officer of Estate Agents Authority