The country's real estate agencies will be required to set up special bank accounts for previously-owned property transactions, according to a statement jointly issued by the Ministry of Construction and the People's Bank of China.

"The establishment of such bank accounts will play a very positive role in regulating domestic property agencies," said Shao Minghao, an analyst of Shanghai Hanyu Property Agency Ltd, an industry leader in Shanghai with more than 50 outlets. "The policy, when put into practice, can definitely reduce transaction disputes in the second-hand property sector."

According to the statement, which was released on Monday, in the future, details such as when and how payments will be made for a previously-owned home are required to be included in a trade contract. All capital transactions should be conducted through the bank and no cash deals will be allowed, according to the statement.

The statement gave no indication when the policy will take effect.

Local housing and land administration bureaus will be responsible for regular inspections of those bank accounts, the statement also said.

At present, it's common that buyers and sellers of second-hand homes experience disputes - especially when the deals are handled by small-sized and unprofessional real estate agencies. And the disputes, in most cases, are caused by ambiguous language in the contract regarding issues such as how to make payment.

Meanwhile, the new policy will also help crack down on unprofessional property agencies who misappropriate money from clients for other uses since the obligatory special bank account may guarantee a more secure transaction.

However, industry people said it may take some time for the new policy to be brought into force locally as it requires related government departments to work out further regulations.

Fang Lei, spokeswoman for the Shanghai Housing and Land Resources Administration Bureau, while saying she hasn't received the official notice, told Shanghai Daily yesterday that the local bureau has already taken that issue into consideration.

In a recent move that has similar intentions, the bureau requires all previously-owned housing transactions to be recorded online starting this month.

Editor: Yan