Consumers should be more careful and do their homework when looking for properties online – such as making comparisons with different websites, referring to transaction figures and statistics from government websites, reading media reports and the latest property market trends.

Investors should tread carefully and seek professional advice because of the inherent risks associated with buying uncompleted properties overseas.

The government has implemented a new tenancy control regime for subdivided units under Part IVA of the Landlord and Tenant (Consolidation) Ordinance, which came into effect on 22 January this year.

Hong Kong estate agents are legally bound to conduct ‘customer due diligence’ to identify and verify the identity of their customer when handling the sale of a property.

Potential risks include the purchasers not being able to obtain any, or sufficient, mortgage loan to complete the purchase.

Providing misleading information to clients in order to close a deal quickly or attract customers is unprofessional and will bring disrepute to the trade, the Estate Agents Authority warns.

As mortgage terms are complicated, prospective buyers should not make any decision based solely on information provided by agents.

In view of the increasing number of Hong Kong investors purchasing non-local properties, the Estate Agents Authority (“EAA”) issued a set of guidelines on the sale of uncompleted offshore properties to protect consumers.

While some properties might look attractive due to a redesign or modification of their original layout plan, purchasers should be wary of the risks if they involve unauthorised building work.

The recent boom in the first-hand residential property market has helped contribute to an increase in the number of transactions in secondary residential properties as well.

Prospective buyers should exercise care on promotional messages when evaluating first-hand residential property transaction, particularly those posted on social media or lamp posts.

Over the past few years, it is becoming more and more popular for Hong Kong people to purchase non-local properties. The risk they face is high, especially when those properties are still under construction, or are yet to be completed.

Property agents should never hastily assure clients on the terms of a loan but instead advise them to consult directly with banks or other professionals.

They must exercise due care before releasing property information to the public and ensure that no misrepresentation is made, writes Ruby Hon Yuen-ping, chief executive of the Estate Agents Authority.

Property prices fluctuate according to market conditions, which in turn affects the value of underlying assets and eligible mortgage financing. Property agents have been reprimanded for giving false assurances on these situations.

The real estate market thrives on transparency and trust, and agents must not allow any personal interest to conflict with those of their clients.

Guidelines issued by the Estate Agents Authority say that property brokers must not offer loans to clients in order to make a sale.

Ruby Hon Yuen-ping, chief executive of the Estate Agents Authority

Consumers must be aware that provisional property agreements are legally binding documents and disputes may easily arise, says Ruby Hon, chief executive of the Estate Agents Authority

The Estate Agents Authority issued a practice circular, which took effect last year, on handling the sale of incomplete properties situated outside Hong Kong, to provide guidelines for licensed property agents to follow.

It is vitally important to check the principal tenancy agreement for any restriction against subletting, says Ruby Hon Yuen-ping, CEO of the Estate Agents Authority

As additions or alterations may affect the safety of a property and may render the title defective, agents should tell their clients of any such orders registered against the property and the risks involved.

Since property transactions usually involve large sums of money and buyers bear the cost of stamp duty, they are advised to carefully research what category they fall under and not just rely on property agents.

There are a number of requirements that estate agency companies need to comply with when issuing property advertisements

Make sure to obtain accurate information about mortgage financing before committing to a property purchase.

The Estate Agents Authority’s charter on sales of first-hand properties – based on consensus with 32 developers – commits to take punitive measures against agents and their firms for any unruly behaviour

The Estate Agents Authority will no longer tolerate bad behaviour such as fighting at sales sites as it looks to stiffen penalties on salesmen and their employers, including revoking their trade licence.