Estate agents should not make any misrepresentations to clients on the property purchase price and relevant stamp duties. Otherwise, they may be subject to disciplinary action by the Estate Agents Authority.
A saleswoman introduced a firsthand residential property to a prospective purchaser, telling her the total amount of the purchase price and stamp duties she would need to pay would not exceed HK$8 million.
The saleswoman then arranged for the client to enter into the Provisional Agreement for Sale and Purchase. However, after signing the agreement, the buyer discovered that the purchase price of the property was in fact more than HK$9 million.
Feeling misled by the saleswoman, the purchaser refused to proceed with the transaction, and lodged a complaint with the EAA. The EAA Disciplinary Committee was of the view that the saleswoman made a misrepresentation to the purchaser in relation to the total purchase price of the property and stamp duties that the buyer would be required to pay.
Therefore, the saleswoman was in breach of paragraph 3.7.2 of the Code of Ethics, which states: “Estate agents and salespersons should avoid any practice which may bring discredit and/or disrepute to the estate agency trade.”
As a result, the Disciplinary Committee decided to reprimand the saleswoman, fining her HK$5,000, and attaching a condition to her license requiring her to obtain 12 points from the Continuing Professional Development Scheme in 12 months.