A Proposed Licensing Regime for PMCs/PMPs

The Property Management Services Authority's recent Consultation Paper on a "Proposed Licensing Regime for Property Management Companies and Property Management Practitioners" will be impenetrable to many readers.

The Authority is established under the Property Management Services Ordinance (Cap. 626) to (among other things) regulate the provision of property management services by licensing PMCs and PMPs. Before implementing a licensing regime, the Authority is required to specify details by means of proposed subsidiary legislation.

In this regard, the Authority has put forward proposals for a licensing regime for PMCs and PMPs.

Under section 3(1) of the Ordinance (not yet in operation) the Authority may by regulation prescribe a service, falling within a category of services set out in Schedule 1 of the Ordinance, as a "property management service". One such category includes: "Legal services relating to the management of a property".

If the proposal is to include legally qualified professionals in the proposed licensing regime it is fundamentally flawed. Members of the solicitors' profession are already governed by a statutory and regulatory regime, overseen by the Law Society of Hong Kong and, ultimately, subject to the supervision of the courts.

As the Law Society's publicly available submissions (available on its website) dated 9 January 2019 make clear, dual regulation will not work and will lead to confusion.

The Law Society's submissions are something of a tour de force and point to the way forward. As with other Ordinances in Hong Kong, that recognise the existing regulatory framework for legal professionals, there should be a statutory exemption. One such example is section 2(2)(b) of the Estate Agents Ordinance (Cap. 511):

"This Ordinance does not apply to anything done –

(b) in the course of practising his profession by a solicitor, a notary public, an architect or a certified public accountant (practising) or by any person employed by him and acting in furtherance of that course;".

Legal advice and services with respect to property and building management are an integral part of the practice of many solicitors in Hong Kong.  As a matter of principle and practicality, the proposed licensing regime is fundamentally flawed insofar as it proposes to regulate lawyers in Hong Kong.