Local residents in search of a cheaper home across the border in Hengqin are lured with sales traps by developers and property agents as most of the new home projects on the island have not yet been issued with presales permits, Business Daily has learnt. As promotional campaigns of new home projects in the city’s neighbouring Hengqin pick up steam, of which some have yet to see the laying of bricks and mortar, legislator Ho Ion Sang said that residents were already lodging complaints about suspicious sales methods of unfinished flats on the island. “For some new home projects like Lee Chee Bay or Legend Chief-Hengqin China, where the plots are basically empty or the construction works barely started, some agents have already put forward ‘subscription’ plans that are actually illegal in nature”, Mr. Ho said. The ‘subscription’ plan the legislator mentioned is actually a common home presales method in mainland China, the nature of which is an intentional agreement reached between the home seller and buyer that secures a unit for the latter at a promised price when the sale of the home project is officially launched. The subscription, which is not a formal sales contract, is often applied by developers and property agents when the presales permits have not been issued for home projects. “There were cases where the subscription of some Hengqin home projects put forward to buyers here are actually bundled up with a sales contract requiring them to settle a down payment,” the legislator said. “In this case, it’s actually a presales contract in nature while the mainland authorities have not issued any presales permit to the developer”. According to mainland regulations governing off-plan sales, developers can only launch the sales of the unfinished flats after obtaining a presale permit. To obtain a presale permit, apart from presenting the authorities with a certificate of land plot use, a construction permit, the intended progress of the construction works and the off-plan sales scheme, developers have to invest at least 25 per cent of the total construction capital in the project. For Guangdong Province, presales permit will only be issued to the developer once it completes two-thirds of a home project that is higher than seven storeys. As Business Daily understood from Mr. Ho and property agents, some of the subscription ‘pledges’ – an amount buyers pay to secure a home unit – are as high as 150,000 yuan (US$24,102) to 200,000 yuan for some of the new Hengqin home projects. “This is a large amount that already suggests that the subscription plan has gone beyond the legal means”, said lawyer Li Guobin, a partner familiar with property sales in mainland-based Guangdong Rong Guan Law Firm. “Usually, a normal pledge is an amount of less than 50,000 yuan”. “A subscription agreement is only meant as a legal basis to protect the buyers against scenarios when developers do not offer the home at the promised price. [In such cases] buyers can ask for claims at court,” said Mr. Li. “Whenever the pledges, which are usually a small amount of around 10,000 to 20,000 yuan, are being used as part of the payment for a home – it is actually illegal sales behaviour”. While Hengqin homes still represent a big lure for local homebuyers shut out of the Macau property market, legislator Ho Ion Sang called for closer cooperation between housing regulators here and on the mainland in setting guidelines targeting estate agents involved in cross-border home sales. In an email reply to Business Daily, the Consumer Council said it has received six cases related to complaints and enquiries from local residents concerning property purchases in mainland China in the first three quarters of this year. One of the cases involves a complaint against lack of clarity in a property sales contract, the Council said.
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