Commission Woes For Centaline’s Mainland China Unit

The developer’s recent statement deals yet another blow to the country’s deepening property crisis

Centaline Property has said its mainland China unit is yet to recover a huge amount of unpaid commissions and so, it cannot pay employees their commissions, responding to reports of delayed payments to the unit by developers including the embattled Evergrande.

Centaline's statement comes as a deepening housing market crisis, rising risk of default and a faltering economy are dragging property developers and agents into commission arrears. The Hong Kong property agency's mainland arm, Centaline Property Agency (Shenzhen), has not recovered some commission fees as property developers grapple with the debt crisis and liquidity crunch, Centaline said in a statement recently. “The current amount of unpaid commissions from developers and agents is huge and Centaline Property is not in a position to advance them to its employees,” the company said.

It did not give a figure for the unpaid commissions but as per media reports, the commission owed to the Shenzhen subsidiary had reached more than 1 billion yuan ($137.19 million). The Shenzhen unit has paid fixed salaries up to July, Centaline said, adding that all of units were operating normally and it would not withdraw from the mainland China market. Centaline said it had set up a team to handle overdue payments and it would prioritise the settlement of corresponding commissions with employees once funds are recovered.

Liu Tianyang, who is leading the team, said that some developers had used housing to offset commissions, but that often resulted in a loss of revenue for the Shenzhen property agency. He said the company was operating under major pressure and the payment of commissions due to employees would lead to more difficulties for it.