A Beijing local authority released a draft guideline Monday to regulate the businesses of real estate brokerage agencies.
The guideline will forbid brokerage agencies to run housing trust services, which allow the agencies to sign contracts directly with tenants, earning additional profits in the process.
Under China's present rules, tenants can find homes through real estate brokerage agencies. They pay brokerage fees and sign lease contracts with homeowners that are guaranteed by the brokers.
Tenants can also sign contracts directly with homeowners, who usually advertise their properties in other ways such as public bulletins.
To save time and make the leasing procedure more convenient, some homeowners choose a "housing trust service" via which they authorize brokers to sign contracts directly with the tenants.
The brokerage agencies agree to pay a certain amount of rent each year to the homeowners, and can earn a profit by renting the properties to tenants for more than they pay the owners.
According to the new draft guideline issued by the Beijing Municipal Commission of Housing and Urban-Rural Development, real estate brokerages will be forbidden to run housing trust businesses in a bid to avoid potential risks that may be associated with the practice.
Unnamed officials from the Beijing Municipal Commission of Housing and Urban-Rural Development were quoted by the Beijing News as saying Tuesday that the move could prevent the agencies from making extra profits by pushing up residential rents.
Residential rents in Beijing increased by 7.6 percent in April year-on-year, much higher than the April consumer price index growth of 3.2 percent, the Beijing Municipal Bureau of Statistics said in a report Monday.
The draft guideline also prohibits the real estate brokerage agencies from fabricating rents and home sale prices so as to manipulate the real estate market.
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