About Non-residential Properties

14. I am planning to purchase a commercial property. Do I need to sign an estate agency agreement with the estate agent? Should the estate agent provide me with a land search copy or other property information?
The requirements about entering into a prescribed estate agency agreement, providing a land search copy and other property information are stipulated in the The Estate Agents Practice (General Duties and Hong Kong Residential Properties) Regulation (which prescribes various forms and stipulates the responsibility to provide different types of property information) and only apply to residential properties.

However, you may ask the estate agent to provide you with general property information or information related to the transaction. According to paragraph 3.4.1 of the Code of Ethics issued by the EAA, estate agents should protect and promote the interests of their clients, carry out the instructions of their clients in accordance with the estate agency agreement and act in an impartial and just manner to all parties involved in the transaction.

Transactions of non-residential properties may involve complicated legal issues. The EAA advises you to seek legal advice if you encounter any difficulties or if there is anything unclear.

15. Is an estate agent obliged to tell me that the shop I am going to buy involves a sub-deed?
According to the Code of Ethics, estate agents should, in the course of business, serve their clients with honesty, fidelity and integrity, as well as protect their clients against fraud, misrepresentation or any unethical practices in connection with real estate transactions. Estate agents should also protect and promote their clients’ interests, and act in a just and impartial manner to all parties involved in property transactions. Estate agents should also exercise due care and due diligence when fulfilling their duties.

Whether a practitioner has a duty to inform you that the property is a partitioned property depends on the relevant circumstances of the case. For instance, if the property has already been partitioned and information including the ownership and sub-deed has been registered with the Land Registry, the practitioner is generally not obliged to reveal whether the property involved is a partitioned one.

However, if the partitioning of the unit has not yet been completed, the estate agent should remind you of the risks of purchasing such a property: for example, whether the partition is lawful, or in breach of the Buildings Ordinance, the Fire Safety (Commercial Premises) Ordinance, conditions of Government lease or the terms of the deed of mutual covenant. If the land search record of the property shows that it has subsisting encumbrances, such as outstanding management fees, the agent should draw your attention to such matters and advise you to consult a lawyer. The agent should also remind you of the rights and obligations of the owners under a sub-deed and suggest you seek legal advice before buying the property.