THE Shanghai Notary Public Office is likely to introduce, within several weeks, a capital supervision service to help ensure the safety of second-hand property deals, a senior notary official told Shanghai Daily yesterday.
"If everything goes smoothly, local buyers and sellers of second-hand properties will be able to wrap their deals through our exclusively-designated bank account soon after the week-long Spring Festival holiday," said Zheng Jianjun, a senior notary with the office. "By launching such a service, we wish to offer customers a secure environment for second-hand property transactions."
The week-long holiday starts on February 6.
The office is now in final discussions with two large real estate brokers to launch the service, Zheng added, without elaborating.
Under its plan, four parties - buyer, seller, property brokerage and the office - will sign a pact which ensures all capital involved in the transaction must pass through the office's specially-designated bank account.
In addition, the office will charge a fee for the service, possibly 0.3 percent of the total housing price, though a final amount has not been decided, according to Zheng.
Two recent scandals involving big real estate agencies from south China have sparked major concerns over the credibility of the property brokerage sector.
In November, Jiang Fei, founder of Zhong Tian Real Estate, a Shenzhen-based property agency which had more than 150 branches and employed 2,000 people across China, vanished with some 40 million yuan (US$5.48 million).
Two months later, another Shenzhen-based real estate agency Chuanghui, claimed to be China's biggest property broker, was reported to have closed 1,000 of its 1,800 outlets since October.
In Shanghai, about 90 percent of second-hand property deals are now done through real estate brokerages and money disagreements account for nearly 70 percent of total disputes in second-hand property transactions because of the lack of a third-party bank account, said Sam Wei, an attorney with Co-effort Law Firm.
Meanwhile, the local housing and land resources administration bureau is also planning to launch a similar service, likely by the first quarter, industry watchers said.