Estate agents should disclose to clients their personal interests in relation to properties they handle. Otherwise, they may be subject to disciplinary action by the Estate Agents Authority.
In a leasing transaction, an estate agent told her tenant client the landlord lived overseas and she had full authority to handle the leasing of the flat. She then arranged for the tenant to sign the tenancy agreement.
The tenant noticed that the tenancy agreement had already been signed by the landlord. The landlord’s name stated in the tenancy agreement was in Chinese only.
He signed the agreement and paid the commission to the agent, who issued a receipt in the name of an estate agency.
Throughout the transaction, the agent did not reveal her Chinese name or arrange for the tenant to enter into an estate agency agreement with the estate agency.
When the tenant renewed his lease two years later, he found out the landlord was in fact that estate agent. A land search of the flat revealed that the estate agent was the registered owner.
In addition, the license search revealed that the agent was the sole proprietor of the estate agency named in the commission receipts.
The EAA Disciplinary Committee found that the estate agent had failed to disclose to her client her interest in the flat, failing to comply with paragraph 3.6.1 of the Code of Ethics. It stipulates that “estate agents and salespersons should avoid accepting an appointment involving a property in which they have a beneficial interest.”
The agent’s license was suspended for a month.