Society

Taizhou officials caught scalping condos

By Li Xinzhu (China Daily)
Updated: 2010-12-14 08:07

Inspector says those who confess and return profits 'will not be punished'

SHANGHAI - More than 40 government officials in Taizhou city of East China's Zhejiang province have been engaged in illegal property scalping for quick profits, local discipline authorities said on Monday.

The officials have so far returned more than 1.5 million yuan ($225,000) earned from property trading after confessing to their misconduct, said Xiang Fengri, spokesman of Taizhou Party commission for discipline inspection, which is responsible for investigating the case. But Xiang did not reveal the sum of the officials' profits.

"Those who confessed and returned the profits will not be punished," Xiang said, adding that the investigation remained ongoing and the results will not be made public until Dec 20.

Local media reported it is common for local officials to use their positions and power to purchase new apartments before they are available in the market and resell them at higher prices, even before they obtain ownership certificates.

Under the current regulations, a forward delivery house can only be resold when the first buyer has received the ownership certificate.

However, because of officials' connections with property developers and local housing authorities, they can have secondhand buyers sign new contracts with developers so the purchased apartments can change hands outside of proper procedures.

It has even become an open secret in Taizhou, where residents have become used to buying new apartments with unusually high commissions that range from 50,000 yuan to 500,000 yuan, local media reported.

Xiang said Taizhou's discipline inspectors have found more than 800 apartments in 25 residential projects that have been sold that way.

"Our job is to find out how many government officials have been involved," he said.

Property scalping is nothing new in China's property trading market. Similar cases have been cracked in Shanghai this year, said Fu Wei, deputy manager of the market research department of Hanyu Property Consulting Co Ltd in Shanghai.

He said staff members from property developers and relevant government departments should be strictly banned from inside trading and the resale of housing. But there is no specific law regulating such practices.

"It currently relies mainly on local government departments' supervision," Fu said.