No loans allowed

2015-05

Estate agents must not offer or make loans to prospective purchasers of firsthand residential properties. If they do, they may be subject to disciplinary action by the Estate Agents Authority.

A salesperson approached two prospective purchasers at a shopping mall to promote the sale of first-hand residential properties without getting the permission from the mall.

At the same time, he persuaded them to participate in the lot drawing by submitting a cashier order for buying a flat of that development. Both of the prospective purchasers said that they did not have enough money. The salesman claimed that the estate agency company he worked for could make them a loan and provide a cashier order for them.

The EAA Disciplinary Committee was of the view that the salesman failed to comply with the guidelines set out in the Practice Circular No. 13-04 (CR) on First Sale of Residential Properties. The guidelines state that licensees must not offer or make loans to a prospective purchaser.

They also cannot solicit for business or distribute leaflets inside or at the entrances of shopping malls or housing estates, unless they have obtained the requisite permission from the management office of the shopping mall or estate.

The salesman was reprimanded and fined $7,000.

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

The estate agency he worked for was also reprimanded and fined $60,000, as it failed to establish proper procedures and systems to ensure that employees or persons under its control comply with the Estate Agents Ordinance.