Special stamp duty demand revealed flaw

2016-06

ESTATE AGENTS SHOULD be familiar with the government measures covering the property market, not least so they can advise clients properly and fully. If they are not primed for this they could find themselves facing disciplinary action by the Estate Agents Authority.

That was the case with a salesperson represented both a purchaser and a vendor in a residential property transaction. Before the signing of the provisional agreement for sale and purchase the salesperson failed to bring to the attention of the vendor the fact the sale of the property was within 36 months of the vendor acquiring it, which meant the sale was subject to special stamp duty.

Later, the vendor was told by the Inland Revenue Department that she would be liable to pay the special stamp duty. Feeling aggrieved, the vendor lodged a complaint with the EAA.

During an ensuring investigation it was also revealed that the salesperson had told the vendor that the purchaser was her niece but in fact it was her daughter.

The EAA Disciplinary Committee was of the view that the salesperson had not been fully conversant with the Estate Agents Ordinance, its subsidiary legislation, its code of ethics, and other guidelines issued by the authority. She was also found to have breached of the code of ethics.

This resulted in the disciplinary panel reprimanded the salesperson, suspended her license for 14 days, and attached a condition to her license, requiring her to obtain 24 points in the core subjects of the Continuing Professional Development Scheme within 24 months.