Check for illegal structures

Property | EAA 8 Mar 2018

estate agents must be careful to avoid any misleading information being given to a client about unauthorized building works at a property.

If a question is raised they should advise clients to seek legal and professional advice. A failure to do so could see disciplinary action being taken by the Estate Agents Authority.

Take the case of an estate agent acting for both a prospective corporate tenant and a landlord in a leasing transaction.

During an inspection of the property the prospective tenant asked the agent whether a cockloft in the property was authorized.

The agent replied that the property did not have any illegal structures.

After entering into a formal agreement the tenant-client found a floor plan of the property that was retrieved from the Buildings Department did not reveal the existence of a cockloft. That pointed to the cockloft being an illegal structure.

The client canceled the transaction finally and lodged a complaint with the EAA.

The EAA disciplinary panel took the view that the estate agent misrepresented to the client that the property did not have any illegal structure. The agent also failed to advise the client to seek legal advice about the risk of unauthorized building works before arranging for the client to proceed with the transaction.

Also during its investigation of the case, the committee found that the estate agent failed to ensure that the representative of the corporate tenant was duly authorized to sign the tenancy agreement on behalf of the corporate tenant.

Thus, she failed to comply with paragraph 3.4.1 of the EAA Code of Ethics that says "estate agents and salespersons, in engaging and accepting an appointment as an agent, should protect and promote the interests of their clients."

The committee reprimanded the estate agent and fined her HK$1,000, suspended her license for seven days and attached a condition to her license that required her to obtain 24 points under the EAA's Continuing Professional Development Scheme within 24 months.

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