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Inquiry Hearing Cases--A Selection II (Excerpts)

The user of properties

In Hong Kong, many buildings are generally termed "commercial and residential". However, the user restriction of each unit within a building is clearly defined in either the Occupation Permit or the Deed of Mutual Covenant, and to breach such restrictions may engender grave results. It is also a basic responsibility of the estate agent to find out the user restriction on the property for which he is agent, and to advise the client as appropriate. In this case, an estate agent was chastised for failing to do so.

A tenant was looking for a unit in Mongkok where he would set up his office. The estate agent that he engaged showed him a unit which was being used by the landlord as an office. The tenant also observed that the other units on the same floor were all being used as offices. Since all the other terms were agreeable the tenant signed the tenancy agreement in which the property was designated "commercial and residential".

The landlord soon found out that the unit was for residential use only and informed the tenant accordingly. Having taken legal opinion the tenant decided to cancel the tenancy agreement. However, owing to the estate agent's failure to provide accurate and comprehensive information about the property, the tenant wasted time and money, and a complaint was accordingly lodged with EAA.

The Disciplinary Committee, having carefully reviewed all evidence, held that the estate agent had failed to explain the user restriction of the property to the tenant and a letter of warning was served on the agent as a result.

Section 36(2) of the Estate Agents Ordinance
Without affecting the generality of subsection (1), information prescribed for the purposes of subsection (1)(a) in relation to any property situated in Hong Kong, being property in relation to which a particular licensed estate agent has entered into an estate agency agreement, or in relation to any property which is of a prescribed class or description of such properties, may include the following-
(a)
particulars of current ownership and subsisting encumbrances in respect of the relevant property, as recorded in records or other documents which are of a class or description prescribed for the purposes of this paragraph and extracted in a manner prescribed for the purposes of this paragraph;
(b)
the total or entire area, calculated and expressed in a manner prescribed for the purposes of this paragraph, which the relevant property comprises;
(c)
where applicable, the year or period in which construction of the relevant property was completed, as recorded in an occupation permit or in a document which is of a class or description prescribed for the purposes of this paragraph;
(d)
any restrictions on the user of the relevant property which are imposed by any document which is of a class or description prescribed for the purposes of this paragraph;
(e)
the unexpired term of the relevant Government or other lease together with a statement as to whether there is any right of renewal of such Government or other lease;
(f) if a lease of the relevant property is to be granted, the term of the proposed lease; and
(g) a statement, made by the vendor in a manner prescribed for the purposes of this paragraph, containing-
(i)
any information so prescribed and within the vendor's knowledge, being information of a kind so prescribed and relating to structural additions to or alterations of a building or other structure, whether already carried out or not; and
(ii)
any information so prescribed and within the vendor's knowledge, being information relating to the following repairs or improvements-
(A)
repairs or improvements which are required or proposed as regards the relevant premises and, in case such premises form part of a building, as regards any other part of that building, or as regards any part of the site on which such premises are situated; and
(B) repairs or improvements for the cost of which a purchaser of such premises will be wholly or partly liable.
 

 

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