At an inquiry hearing of the Disciplinary Committee, an estate agent was found to have failed to properly explain to his client the different types of agency appointment and the respective implications and effects of various terms and conditions set out in the estate agency agreement. Consequently, the Committee ordered that the agent's licence be suspended for a month and a half. In addition, a condition that the agent should attend a recognized training course for estate agents was imposed.

In June 2000, the client listed his property with one estate agency. Owing to a lack of response from the market, the client then listed the property with the estate agency which was the employer of the agent. The property was subsequently sold successfully through the first appointed estate agency. On discovering the sale, the agent pursued the client for the commission payable under the terms of the estate agency agreement that he had signed with the client. The client only then realized that the agreement he signed included a term of exclusive agency. For fear that action might be taken against him, the client reluctantly paid the estate agency 70% of the commission to settle the matter.

At the inquiry hearing, the agent informed the Disciplinary Committee that he had explained the contents of the agreement to his client but he was not certain if the client had understood what exclusive agency meant. The client said that he thought the term referred to an exclusive appointment for advertising only. The client further claimed that if it had been explained to him that exclusive agency would have implication on the commission payable, then he would not have agreed to such an agreement.

The Committee noted that the clause on appointment of agent and validity period of agreement and the extra term inserted regarding the validity period of the exclusive agency were in conflict. When members of the Committee pointed this conflict out to the agent, the agent was not able to give satisfactory explanation.

The Committee finally came to the decision that the vendor's testimony was reliable, that the agent had breached sections 6(3)(a) and 6(3)(b) of the Practice Regulation and had caused loss to the vendor. The Committee ordered that his licence be suspended a month and a half. Given that the agent was unable to satisfy the Committee that he had the requisite competence or knowledge to explain the estate agency agreement to a client, in particular the implications and effects of exclusive agency, the Committee ordered the agent to undertake a recognized training course not less than twenty hours in duration.