LegCo Paper No. CB(1) 1739/95-96
(These minutes have been seen by the Administration)
Ref : CB1/BC/11/95/2

Bills Committee on the Estate Agents Bill

Minutes of Meeting
held on Friday 24 May 1996 at 8:30 am
in Conference Room B of the Legislative Council Building

Members Present :

    Hon Andrew CHENG Kar-foo (Chairman)
    Hon Edward S T HO, OBE, JP
    Hon Ronald ARCULLI, OBE, JP
    Hon Albert CHAN Wai-yip
    Hon LEE Wing-tat
    Dr Hon LAW Cheung-kwok
    Hon NGAN Kam-chuen

Members Absent :

    Hon Mrs Selina CHOW, OBE, JP
    Hon LI Wah-ming
    Hon James TO Kun-sun
    Hon CHAN Kam-lam
    Hon CHAN Yuen-han

Public Officers Attending:

Mr William SHIU
Principal Assistant Secretary for Housing
Ms Sherman CHAN
Senior Assistant Law Draftsman (Atg)

Staff in Attendance :

Mrs Vivian KAM
Chief Assistant Secretary (1)2
Mr Stephen LAM
Assistant Legal Adviser 4
Miss Becky YU
Senior Assistant Secretary (1)3

I. Confirmation of Minutes of Previous Meetings

(LegCo Papers No. CB(1) 1418, 1419, 1420 and 1421/95-96)

The minutes of the meetings held on 18, 19 and 26 March and on 9 April 1996 were confirmed.

II. Examination of the Bill

2. The Chairman reminded members that the Bills Committee had examined up to Clause 19 of the Bill as at the last meeting on 30 April 1996. The Administration had been requested to respond to a number of concerns made by members in respect of Clauses 2 to 19 and a full list of such concerns had been circulated to members vide Appendix II to LegCo Paper No. CB(1) 1441/95-96. He also reported that the Administration’s response to the written representations on Clauses 29 to 37 and an updated version of the summary of representations by parties and by clauses had been circulated vide Appendices I and IV to LegCo paper No. CB(1) 1441/95-96.

3. The Chairman then drew members’ attention to the deception case of the Golden Garden referred by Duty Roster Members (DRMs) upon meeting with the Tin Shui Wai Resident Services Association on 1 May 1996. The DRMs suggested that the Bills Committee should consider making it an estate agent’s responsibility to verify the contents of the advertisements of properties to be sold in order to safeguard the interests of potential buyers. Members agreed that the case should be considered during examination of Clause 47 on Advertising. Meanwhile, the LegCo Complaints Division was requested to provide a detailed report of the case to facilitate discussion.

Clause 19. Grant of estate agents’ licences to individuals restricted

4. Members held different views on the subject of educational qualifications. While some considered educational qualifications not a pre-requisite licensing criteria and suggested deleting the term from sub-clause 19(1)(b)(ii), others agreed in principle with the need to prescribe a basic and reasonable level of educational requirements. Mr William SHIU advised that the licensing requirements including educational qualifications would be determined by the Estate Agents Authority (EAA) taking into account the needs of the trade and prevailing market situations. The important point was to ensure professional integrity and competence among estate agents.

5. Members considered it necessary to be more specific and to provide more details and examples on how the EAA “should have regard to” the various circumstances outlined in sub-clauses 19(2)(a) to (e), in particular in (d). Mr SHIU said in response that the Administration did not intend to make the licensing requirements too harsh for estate agents and that reference would be drawn from other legislation in determining the eligibility criteria. As regards the rationale for setting the period of undischarged bankruptcy at five years, Ms Sherman CHAN advised that reference had been made to similar provisions in other legislation including the Travel Agents Ordinance.

6. Members considered that measures should be in place to ensure confidentiality of information provided in connection with licence applications. Mr SHIU assured members that information provided would be treated in accordance with provisions under the Personal Data (Privacy) Ordinance and would not be used for purposes other than licence applications.

7. Members sought clarification on whether revocation of licences in another profession, but without conviction, would also affect a person’s eligibility for a licence, and whether consideration would be given to obtaining references or certificates from professional bodies concerned. In response, Ms CHAN advised that the EAA was accorded flexibility under sub-clause 19(1)(c) to decide whether a person was fit and proper for holding an estate agent’s licence. While members agreed in principle with the need for flexibility, they suggested that a clear set of guidelines upon which a person was deemed fit and proper should be devised. Mr SHIU advised that the fit and proper criteria had been stipulated clearly in sub-clauses 19(2), 20(2), 20(3) and 21(3). The criteria were proposed having regard to similar requirements in other licensing systems such as travel agents and leveraged foreign exchange traders.

Clause 20. Grant of estate agents’ licences to companies restricted

Clause 21. Grant of salespersons’ licences restricted

8. No specific comments were made on these clauses.

Clause 22. Applications for grant of licences

Clause 23. Renewal of licences

9. Members urged the Administration to re-consider the need for applications for licences and renewals of licences to be published in the gazette as such a practice was unusual save in cases where public interests were affected such as in liquor licences. They cautioned that such arrangements would cause delay in the granting of licences and create extra financial burden on applicants concerned; they suggested that consideration should be given to using the EAA’s notice boards as an alternative. Mr SHIU took note of members’ views but advised that the objectives of these arrangements were to enhance public access to information on the one hand and to enable objections to be made under Clause 27 on the other. Members took a different view and questioned the need for such public scrutiny having regard to the extensive investigative power of the EAA.

10. Members considered a need to state more clearly in sub-clauses 23(2) and (5) the circumstances under which the EAA might vary or remove conditions already attached to the licences. Ms CHAN advised that the objective of the clause was to enable the EAA to prescribe additional conditions for circumstances not covered by the proposed legislation and that similar flexibility had also been provided for in sub-clause 17(3) on licences and conditions. Mr SHIU assured members that consideration would be given to provide the power to prescribe conditions similar to the power to make subsidiary legislation. This would be subject to the approval of the Secretary for Housing and the scrutiny of the Legislative Council under normal legislative procedures. Members did not agree with the Administration’s view and suggested re-phrasing sub-clauses 17(3), 23(2) and 23(5) to avoid any undue disruptions to the business of estate agents.

11. Members considered that simple procedures for renewal of licences should be devised to ensure that time gaps would not exist between expiry of licences and renewal and issue of licences or provisional licences; the possibility of extending the validity of current licences until the new licences were ready for issue should also be examined. Mr SHIU advised that these were technical arrangements which could be devised by the EAA. Ms CHAN supplemented that sub-clause 23(7)(a) had stipulated the procedures for renewal of licences. Members however emphasised the need to provide for an earlier period during which applications for renewal must be made. In reply to a question on whether an estate agent could continue to operate during the period of appeal, Mr SHIU said that an estate agent could continue to operate until a decision to suspend or revoke his licence was made and that decision should come into effect regardless of the appeal. A member suggested that this should be made explicit in the relevant clause.

Clause 27. Objections

12. Members considered the requirements for persons raising objections too cumbersome and were worried that the system could easily be open to abuse. They queried the rationale for such a provision and requested the Administration to provide examples of similar requirements in other legislation for reference. Ms CHAN advised that the objective of the clause was to enable objections to be made in the event information provided by applicants was inaccurate. Mr SHIU supplemented that these arrangements could enhance transparency of the EAA on the one hand and facilitate public access to information on the other.

13. Members urged the Administration to re-consider the need for conducting public hearing as such a practice was unusual amongst professionals. They also emphasised the need to state clearly in the clause that the onus of proof lied with the person raising objection.

Clause 28. Suspension and revocation of licences

14. Members were not convinced that restrictions on suspension of licence upon cessation of employment under the Securities and Futures Commission Ordinance should similarly apply to estate agency work which was only a trade. They also questioned the rationale for prohibiting a licensed salesperson to practise on his own during the unemployment period. Mr SHIU undertook to consider members’ view but advised that the objective of the clause was to ensure professional competence upon resumption of estate agents’ duties after a period of unemployment.

III. Any Other Business

15. The Chairman reminded members of the next meeting on 28 May 1996. Members also agreed to hold the next three meetings as follows:

    - Wednesday, 5 June 1996 at 8:30 am;

    - Tuesday, 11 June 1996 at 4:30 pm; and

    - Wednesday, 12 June 1996 at 2:30 pm.

(Post-meeting note: The meeting on 12 June 1996 was subsequently cancelled owing to the need to make available the time-slot for a joint Panel meeting.)

16. There being no other business, the meeting closed at 10:45 am.

LegCo Secretariat
5 July 1996

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