Watchdog targets dodgy realtors
Print Edition
DODGY real estate agencies can make buying a new home a nightmare, according to the findings of an undercover investigation.
The number of complaints about real estate companies made to the Shanghai Consumer Rights Protection Commission last year soared by 40 percent to over 790, prompting it to take a closer look at how they operate.
More than 50 percent of people who have dealings with real estate companies are unhappy with the quality of service they receive and many complain of dishonest practices, said commission official Yang Qing at a press conference yesterday.
Agencies lie about prices and other information, and continue to advertise attractive properties that are already sold to lure potential buyers, the investigation found. The real prices of about 41 percent of apartments on the market are on average 23 percent higher than the figure stated by brokerages.
Other concerns include agents not allowing buyers and landlords to meet, telephone harassment and the imposition of extra fees.
Agencies are also less than honest when to comes to the condition of properties — 56 percent do not match the description offered.
“An apartment that looked exquisite and clean in photos turned out to be shabby and old, and another apartment said to be in the center of a residential complex by brokerages is actually close to the roads,” said Yang.
And it gets worse. In one case, a resident surnamed Huang paid 2.8 million yuan (US$430,769) in August as a down payment for a 4 million yuan apartment in Hongkou District listed by Lianjia, Shanghai’s largest real estate brokerage. However, the apartment was seized by a court due to a business-related bank debt of 150 million yuan for which it had been used by the owner as collateral.
Huang said that before he signed the contract he was assured by the Lianjia agent that the owner was in a strong financial position and was selling the apartment to buy a better one.
Lianjia proposed lending Huang more than 1 million yuan to keep the deal alive and wanted roughly 20 percent annual interest, far above the bank rate, making the price of the property higher than its market value.
Lianjia refused to take responsibility for misleading Huang.
“It is an endless nightmare for me and I was desperate,” Huang said.
“I received much unfair treatment in the process and was even threatened by Lianjia’s employees.”
A legal expert says the brokerage is in violation of regulations governing loans and other financial products.
“Lianjia did not register this kind of financial product, and did not obtain approval, thus it can not do such business,” said Dong Minhua, a lawyer participating in the undercover investigation. “In addition, the interest is for times what banks offer, which is a usurious loan.”
A Shanghai Commission of Housing and Urban-rural Development Management official, who declined to be identified, said the government is looking at ways to improve regulation of the industry..
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