Estate agents who bend the rules

2017-08

Estate agents should protect the interests of their clients and should not make any misrepresentation to them. Otherwise, they may be subject to disciplinary action by the Estate Agents Authority.

A client was interested in renting a property for retail business and an estate agent showed her an “upstairs shop” in a commercial building.

Though she heard from other agents that the permitted use of the premises was for office purposes, she was told by the estate agent that there was no stipulation on the Deed of Mutual Covenant that the property was not allowed for retail use, and the use of “office” and “retail business” were both commercial in nature.

The client confirmed the leasing of the unit, but later the property management company refused to allow it to be used for retail purpose. It rejected the renovation plan as it failed to comply with the Deed of Mutual Covenant and the occupation permit, which states that the premises were for “offices with ancillary accommodation for non- domestic use” only.

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

The EAA Disciplinary Committee found that the estate agent failed to remind the tenant to seek legal advice before entering into the provisional tenancy agreement, or to inform the tenant in advance of the risk of using the unit for retail use. Hence, he was in breach of the Code of Ethics which stipulates that “estate agents should protect and promote the interests of their clients.”

The Disciplinary Committee decided to reprimand him, impose a fine of HK$3,000 and suspend his license for 21 days.

(Published in The Standard)