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Roof comes off real estate scams

By Liu Yujie (China Daily)
Updated: 2010-07-12 10:03
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With housing prices soaring annually in recent years, more would-be buyers are becoming the victims of crimes connected to cheating in the real estate sector, according to an investigation by the People's Procuratorate of Beijing released on July 10.

The report says the average cost of housing in the capital rose from 11,000 yuan ($1,623.54) per sq m to 23,000 yuan per sq m during the past three years. With the doubling of the price came a doubling of incidents of real estate cheating, with 38 cases reported in 2007, 55 in 2008 and 81 in 2009.

The cases involved illicit money totaling more than 0.24 trillion yuan. Most of the money could not be recovered because it was either spent or used to repay debts.

In most cases, criminals cheated huge amounts of money out of would-be buyers by either grabbing the full selling price of a home or a deposit.

Often the phony sellers claimed they had access to low-cost houses, such as economically affordable housing subsidized by the government and meant for low-income people and those being forcibly relocated.

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"They took advantage of the public's desire to buy ever more spacious houses at low costs. Everyone must watch out for it. Even if it is between acquaintances," said Yang Yonghao, a spokesman at the People's Procuratorate of Beijing.

In other cases, criminals forge house owners' documents, such as identification cards, property ownership certificates and letters of commission to pretend to be sellers and get payments for homes they do not own.

Yang said this is a common way of cheating in property issues. The best way to avoid it is to make sure all documents are genuine and that the seller's name is the same as that registered on the property ownership certificate before handing over any money.

"Don't trust letters of commission. It is necessary to get in touch with the owner personally," Yang warned.

"Meanwhile, the government has the responsibility to establish a registration system for house transactions and rentals to make the information of real estate available to the public, so such cheating can be effectively avoided."

In addition, the report revealed a new way in which employees of house agents are cheating. It said some are faking tax vouchers, including contract tax and turnover tax, to cheat money out of clients.

Yang said the phenomenon can be attributed to the lax management of governmental departments concerned and the companies' lack of supervision of their employees.

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