CRI听力:Authorities Warn of Dodgy Realtors

Reporter:
The investigation has been jointly conducted by the Shanghai Consumer Rights Protection Commission and a group of local lawyers.

They launched the probe amid a spike in complaints about real estate companies to the commission last year, which went from 40 in 2014 to around 600 last year.

Most of the complaints revolve around sketchy business practices.

In one case, Huang paid 2.8 million yuan in a down payment for a 4 million yuan apartment in Shanghai's Hongkou District.

But it later turned out the apartment was under a seizure order from a local court, as the owner owed around 150 million yuan in business-related debt.

Huang says his real estate broker assured him the owner was in a strong financial position and was selling the apartment to buy a better one.

But he says that all changed after he signed his purchase agreement.

"After the contract was signed, they showed me a rewritten house ownership report, which showed the house had been used as collateral to borrow money. I refused to continue with the contract, but they warned I would lose my collateral if I backed out of the contract."

He says the company, Lianjia, has refused to accept responsibility.

Instead, he says the firm has offered to lend him more than 1 million yuan to keep the deal alive.

But in doing so, he says the firm wanted roughly 20 percent annual interest, which is far above market rates.

In the end, this would have put the property above market value.

Legal observer Jian Feng says Huang's case is a clear violation of the regulations governing loans.

He says cases like this are a sign that more government oversight may be needed.

"It's very dangerous when companies like this run their operations without registering these types of financial products or doing so without approvals. But it's begging the question of which government department is responsible in monitoring this kind of situation. It's a new question."

The undercover investigation has also revealed wide-spread accusations of real estate agencies lying about prices and other information, as well as advertising properties already sold.

Other instances have seen prospective buyers not being allowed to meet with the owners of the properties, telephone harassment and the imposition of additional fees.

Tang Jiansheng with the Shanghai Consumer Rights Protection Commission says the combination of these types of issues is creating a major problem for the real estate sector in Shanghai.

"The satisfaction rate in the Real Estate Agents & Brokers Industry is unbelievably low. The root causes of the complaints are the lack of integrity and the lack of rules in the sector."

Municipal authorities in Shanghai are reportedly looking into ways of trying to better-regulate the city's real estate sector.

For CRI, this is Luo Bin.