Untitled Document
Inquiry Hearing Cases--A Selection II (Excerpts)

Failure to honour promise of cash incentives

A purchaser lodged a complaint with EAA against an estate agent for failing to honour a promise for cash incentives. He also succeeded in his case against the estate agency company in the Small Claims Tribunal.

The purchaser was looking for a flat for his daughter and, in his search for the right property, had visited a good number of first-sale sites in Kowloon and also got to know some estate agents. Salesperson A suggested to him that if he would buy a flat in a certain new development, then he would be entitled to a cash incentive at 2% of the purchase price. When the purchaser told Salesperson B, from another company, about this privilege, Salesperson B promised that his company would offer the same privilege. The purchaser considered his options and made up his mind on a unit in that development, and was then informed by Salesperson A that the incentive of 2% could be augmented with another $5,000 in cash if the purchase was made through his company. The purchaser then put these terms to Salesperson B, who promptly told him that his company would offer the same.

The purchaser, seeing that the cash incentives from both companies were the same, finally decided to make the purchase through Salesperson B. At the time the documents were signed the purchaser demanded that the offer of incentive be confirmed in writing, but Salesperson B told him that it would take time for such a letter to be issued by his company and urged him to sign the documents confirming his purchase.

When the paper work was done the purchaser again asked for written confirmation of the cash incentive, but Salesperson B procrastinated. He then put the question to the company that B represented. Such efforts proved to be futile as the company eventually told him that since the promise of incentives was not in writing, no such privilege would be offered. The purchaser was angered and sued the company at the Small Claims Tribunal. He won the case and the company made good the promised offer in full.

The purchaser also lodged a complaint against Salesperson B with EAA. The Disciplinary Committee conducted an inquiry hearing to consider the case and found the complainant's testimony reliable. The Committee found that the complainant would not have made the purchase through Salesperson B had there been no promise of incentives. However, consideration was also given to Salesperson B's relative inexperience in the trade and that he might have been over-zealous in closing a deal. His licence was suspended for two months for what he had done.

Paragraph 3.3.1 of the Code of Ethics
Estate agents and salespersons shall, in the course of business, provide services to clients with honesty, fidelity and integrity. They should protect their clients against fraud, misrepresentation or any unethical practices in connection with real estate transactions.



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