Legislative Council Question 2 : "Collection and dissemination of information on property transactions" by the Hon Lee Wing-tat and an oral reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council
Following is a question by the Hon Lee Wing-tat and an oral reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council today (April 26):
Regarding the collection and dissemination of information on property transactions, will the Government inform this Council whether:
(a) it compiles statistics on the number of uncompleted property transactions involving signed Provisional Agreements for Sale and Purchase; if so, of the number and total value of residential units involved last year; if not, whether it will compile such statistics and regularly publish the number of uncompleted transactions and the reasons therefor;
(b) there are provisions in the existing legislation which are targeted at acts to mislead the market with non-bona fide property transactions; if so, of the enforcement of the relevant legislation; if not, whether it will consider enacting legislation to prohibit such acts; and
(c) it will, by drawing reference from the stipulations on disclosure of transactions in the stock market, consider requiring property developers to disclose major transactions and property transactions with connected persons?
Hong Kong has a well-developed property market. Property transactions are conducted in accordance with free market principles. Both the buyer and seller are bound by contract. There are also statutory provisions against fraudulent behaviour and misrepresentation.
My reply to the three-part question is as follows:
(a)¡@Generally speaking, over 90% of all formal Agreements for Sale and Purchase registered at the Land Registry do not come with registration of corresponding provisional agreements. Moreover, we have no way of knowing when or whether a provisional agreement will be completed, and the reason for a transaction not being completed. In addition, relevant statistics from the Land Registry are not classified by residential and non-residential transactions. Hence, we are not able to provide the number of residential transactions and the transaction value involved based on the available information. Due to the above reasons, we will not compile such statistics on a regular basis.
(b)¡@In order to maintain the fair and smooth operation of the property market, acts of fraud or misrepresentation involving use of false transaction information to mislead the market must not be tolerated. Resorting to fraud in the course of a property transaction may amount to a criminal offence and offenders may be liable to prosecution under the Theft Ordinance (Cap. 210); in terms of civil liability, at common law where a misrepresentation amounts to fraud, an action for damages in tort for deceit is possible. Also, pursuant to the Misrepresentation Ordinance (Cap. 284), a person who makes a misrepresentation inducing another person to enter into a contract may also be liable for damages.
From 2003 to 2005, Police pressed 116 charges against 47 persons for fraudulent behaviour in relation to property transactions. Over 90% of the cases were successfully tried and convicted. It should be noted that these figures cover various types of property fraud, such as mortgage fraud, use of false instruments, etc., and there is no breakdown of statistics down to the category of releasing false property transaction information. Hence, these statistics from Police which I am providing reflect all prosecutions related to property fraud rather than specifically to the use of false property transaction information to mislead the market.
(c)¡@The operation of the property market is vastly different from that of the securities market. The securities market involves listed companies, and the activities of each listed company may affect the interests of the investing public. Property transactions are no different from ordinary transactions involving contracts that affect the interests between a buyer and a seller: any dispute on the transaction may be dealt with through civil litigation, and if fraudulent behaviour is involved, criminal prosecution action may be taken according to relevant provisions of the law. Moreover, as a property transaction involves a contract signed by a buyer and a seller, it may not be feasible to require a developer to disclose information in relation to the buyer without the buyer's consent. With the current mode of operation and transparency of the property market, the interests of home buyers and investors are adequately protected. We therefore see no justification for requiring any contractual party involved to disclose their own background information to the public.
Ends/Wednesday, April 26, 2006
Issued at HKT 12:11