Agent penalized for misleading would-be shopkeeper

2016-07

ESTATE AGENTS SHOULD not make any misrepresentation to their clients and should protect their interests. Otherwise, they can be subjected to disciplinary action by the Estate Agents Authority.

A client, interested in renting a property for her retail business, was offered by an estate agent an “upstairs shop” inside a commercial building.

She learned from other agents that the premises on offer to her were only for office use. But she was told by her agent that there was no stipulation in the deed of mutual covenant that the property was barred for retail use.

The agent further told her that “office” and “retail business” uses were both commercial in nature. After being ensured by her agent, the client confirmed the leasing of the unit. But soon after, the property management company refused to allow the unit to be used for retail purpose.It rejected the renovation plan for that unit as it failed to comply with the Deed of Mutual Covenant and the occupation permit, which states that the premises are only for “offices with ancillary accommodation for non-domestic use”.

The tenant had to terminate the tenancy agreement and she lodged a complaint with the EAA.

The authority’s disciplinary committee found that the agent failed to remind the tenant to seek legal advice before entering into the provisional tenancy agreement. The agent also failed to inform the tenant in advance of the risk of using the unit for retail purposes.

The agent breached paragraph 3.4.1 of the Code of Ethics which stipulates that “estate agents should protect and promote the interests of their clients”. She was reprimanded and fined HK$3,000.

Her licence was suspended for 21 days and she was also required to obtain within 12 months 12 points in the core subjects of the Continuing Professional Development Scheme.