Look before you leap

2013-10-24

An estate agent placed in his shop window an advertisement of a property for rent, saying that it is “suitable for commercial and residential use”.

Attracted by the advertisement, a prospective tenant asked the estate agent for an inspection of the property.

During the inspection arranged by the estate agent, the client found that the property was well furnished and neat, but it was located in a commercial building.

The agent assured the client that the property could be used for domestic purpose, and persuaded him to sign a provisional tenancy agreement to rent the property.

However, the client later found out that the occupation permit of the property restricted its permitted use to “office for non-domestic use”.

He had to cancel the tenancy agreement with the landlord as the property was not permitted for residential use.

In this case, the agent failed to comply with the Code of Ethics issued by the Estate Agents Authority, as he had made a misrepresentation about the permitted use of the property.

According to the estate agency agreement for leasing of residential properties in Hong Kong prescribed by the Estate Agents Practice (General Duties and Hong Kong Residential Properties) Regulation, an estate agent is required to provide a duly completed leasing information form to the tenant.

The information to be given in the form includes the user restrictions of the property as stipulated in the relevant occupation permit and the estate agent should advise the tenant accordingly.