ENG-1994 — Page 249

HOUSING

212

By the end of 1994, prices of new flats offered by developers had in general moderated from 10 to 30 per cent, depending on the location of the property in question.

The task force is not a one-off exercise. The government will continue to closely monitor the property market and take any necessary action to meet the housing needs of the community.

Regulation of Estate Agents

A working group on the regulation of estate agents was set up by the government in November 1993 to draw up proposals for a regulatory system with legislative backing and to examine the resource and enforcement implications. Its report was published for public consultation in August 1994. In November, the government endorsed the working group's final recommendations. A relevant Bill, targeted for introduction into the Legislative Council in mid-1995, is being prepared.

The working group's major recommendations include the implementation of a licensing system, introducing three categories of licences with different requirements applicable to individual estate agents, corporations and front-line estate salespersons; establishing a statutory and self-financing Estate Agents Authority for licensing and enforcement; stating the obligations of estate agents in legislation and prescribing the use of written agency agreements. In the interim, the working group recommended that the two territory- wide trade associations, in consultation with the Consumer Council, the Independent - Commission Against Corruption and the Law Society, should draw up a standard engagement agreement for inspection of premises and a standard provisional sale and purchase agreement. The Consumer Council and the Independent Commission Against Corruption will continue to promote consumers' awareness of their rights in property transactions.

Proposed Reform of Law on Sales Descriptions

In November 1992, the Law Reform Commission appointed a sub-committee to consider whether the law governing the protection of prospective purchasers and purchasers of uncompleted residential property relating to inadequate or misleading sales information should be changed and to make proposals for reform. The sub-committee issued its interim report in the form of a consultative document in April 1994, and finalised, in September 1994, its recommendations relating to the descriptions of uncompleted residential properties for sale in Hong Kong. The sub-committee's final report was endorsed by the Law Reform Commission in December. The commission's final report will be published in the first quarter of 1995.

Rent Control in the Private Sector

Statutory controls on rents and security of tenure date back to 1921. The governing legislation is the Landlord and Tenant (Consolidation) Ordinance. Under Parts I and II, certain domestic tenancies have both their rent levels controlled and receive security of tenure. Under Part IV, nearly all the other domestic tenancies receive security of tenure, providing the tenant is prepared to pay the prevailing market rent.

The legislation allows controlled rents to increase progressively up to market levels so that rent controls can be removed by the end of 1996. The provisions for security of