Mortgage assurance fell short of mark

2016-09

ANY WRONG pointers about a mortgage that is given by an estate agent to a client can lead to trouble.

One estate agent showed a first-hand serviced apartment to a prospective purchaser and said she could definitely obtain a mortgage of 85 percent of the purchase price from the lending institution appointed by the developer.

Then, before the provisional agreement of sale and purchase was completed, the agent again assured the would-be purchaser that an 85-percent mortgage could be offered.

But it did not turn out that way.

A mortgage of only 40 percent of the property price was approved due to the purchaser’s financial situation.

That resulted in the prospective buyer being unable to push through with the transaction and her deposit was forfeited to the developer.

She then lodged a complaint with the Estate Agents Authority.

The EAA Disciplinary Committee took the view that the estate agent was in no position to assure the purchaser that she would definitely be able to obtain a certain amount of mortgage and was therefore in breach of paragraph 3.7.2 of the authority’s code of ethics.

It stipulates that estate agents and salespersons must avoid any practice likely to cause discredit and/or put the estate agency trade in disrepute.

The committee decided to reprimand the estate agent and suspend his license for a month.

A condition requiring him to obtain 12 points in the core subjects of the Continuing Professional Development Scheme in 12 months was also attached to his license.

(29 September 2016)