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Inquiry Hearing Cases--A Selection II (Excerpts)

Failure to obtain proof of proper authorisation

The Disciplinary Committee issued a warning to an estate agent who failed to ensure that the vendor's representative had proper authorisation to sign the provisional sale and purchase agreement on the vendor's behalf.

According to the purchasers, the estate agent provided them with a land search before signing the provisional sale and purchase agreement. The land search showed that the property was jointly owned by two individuals. The estate agent advised the purchasers to pay the deposit to the vendors' solicitors as stakeholders, which the purchasers did.

When the purchasers received the provisional sale and purchase agreement, they noticed that one of the vendors had signed the agreement in her own capacity as well as on behalf of the other vendor. The purchasers were not shown or given any document showing proper authorisation for the signing of the provisional sale and purchase agreement. The purchasers later noted that the vendors' solicitors did not cash their cheque for the deposit. The vendors neither proceeded with the signing of the formal sale and purchase agreement nor paid any compensation to the purchasers. They argued that the provisional sale and purchase agreement was ineffective as it was not properly signed by all of them.

In response to the complaint, the estate agent explained that he had only served the purchasers in the transaction and all contacts with the vendors were made through another estate agency, which was the vendors' exclusive agent. Before arranging for the signing of the provisional agreement, he was told that the vendors would be present and he did not expect that only one of the vendors had actually shown up for the signing of the agreement. The estate agent admitted that he did not ask the vendors' estate agent to produce any authorisation from the absentee vendor.

The Disciplinary Committee, after careful consideration of the evidence, decided the complaint substantiated in that the estate agent had failed to observe Paragraph 3.4.1 of the Code of Ethics to ensure that the absentee vendor had properly authorised the other vendor to sign the provisional sale and purchase agreement on his behalf. However, in view of the fact that the estate agent had already duly advised his clients to pay the deposit to the vendors' solicitors as stakeholders, the Disciplinary Committee only ordered that a warning be issued to the estate agent.

Paragraph 3.4.1 of the Code of Ethics
Estate agents and salespersons, in engaging and accepting an appointment as an agent, should protect and promote the interests of their clients, carry out the instructions of their clients in accordance with the estate agency agreement and act in an impartial and just manner to all parties involved in the transaction.

 

 

 
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