A decision to buy a home is the biggest financial commitment most people will make in their lives. The transaction, from signing up to settlement and the handing over of the keys, can be a stressful business for both buyer and seller. It also involves trusting law firms, not only for their advice but for the handling of large sums of money. If a firm breaches that trust and the regulator – in this case the Law Society – freezes its bank accounts to keep clients’ money safe, it is effectively made to disappear into limbo for an indefinite period. This is the nightmare facing innocent people caught up in a financial scandal at one of Hong Kong’s biggest conveyancing firms, Wong, Fung and Co. That cannot happen under a new rule designed to protect Hong Kong homebuyers, which will abolish the role of lawyers as middlemen in residential mortgage transactions. The new rule, put forward by the Hong Kong Monetary Authority, is expected to take effect in the second half of next year after a consultation followed by a trial period. It will initially cover secondary market transactions before being extended to new flats. It will change the current practice in which both bank and customer first pay the money to a law firm, which then passes it on to the lawyer of the seller. Hong Kong housing, office markets are facing very different supply shocks During a 10-year period to April 2021, more than 1,500 homebuyers found a combined HK$530 million (US$68 million) trapped in the frozen bank accounts of 25 troubled law firms, according a Legislative Council document and court papers. A total of 637 homebuyers complained that their money, totalling HK$368 million, was trapped in the defunct law firm’s bank accounts as a result. Some of the buyers were forced to declare bankruptcy or needed to get other bank loans to complete their transaction. The Hong Kong Association of Banks supports the change. Bypassing lawyers would save on fees. But care would need to be taken to ensure there are no problems with digital transactions. Ultimately, it is all about security for those parting with their money. Meanwhile, swift action is needed to help clients of Wong, Fung and Co recover funds. The Monetary Authority has asked banks to be flexible and understanding in helping clients. The government must ensure unfortunate clients of the law firm are not left out of pocket.