EAA Publications
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| The Freshman |
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| Withholding information is
unacceptable |
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 Ms
Ho was planning to buy a flat and the agent tried very hard
to sell her one in Aberdeen, emphasizing that the asking price
was lower than the market price by more than $100,000. Finding
it odd, Ms Ho asked for the reason, and the agent explained
that the owner was about to emigrate and needed cash immediately
and that was why the asking price was below market price.
Ms Ho remembered reading earlier in newspapers that some of
the buildings in the vicinity had been served with dangerous
hillsides orders, and suspected that the flat being pushed by
the agent was situated in one such building. The agent vehemently
denied it, assuring her that there was nothing wrong with the
flat. The next day, the agent told her that the owner was willing
to lower the price further, and urged her to make a deposit
as soon as possible. He also guaranteed that she would be able
to take out a mortgage. On hearing that, Ms Ho paid a deposit
and signed a provisional agreement for sale and purchase.
The next day, Ms Ho learned from a caretaker of the building
that a dangerous hillsides order had indeed been served on the
building. It was estimated that the share of the maintenance
costs of each household would not be less than $200,000. The
former owner was selling the flat at a lower price in order
to avoid paying the maintenance fee. Feeling cheated, Ms Ho
wanted to annul the agreement, but the agent refused and told
her that, not only was the deposit not refundable, she had also
to pay commission to the agent. Ms Ho stopped the payment of
her cheque.
As Ms Ho had signed a provisional agreement for sale and purchase,
the agent demanded from her a commission according to the estate
agency agreement, while the owner also sued her for breach of
agreement because she stopped the payment of the deposit cheque.
Unless she could produce strong evidence proving that she signed
the agreement because of misrepresentation, Ms Ho was in a highly
unfavourable position legally.
The Practice Regulation provides that property information including
subsisting encumbrances of the property such as the dangerous
hillsides order mentioned above shall be made known by the estate
agent to the prospective purchaser. The Regulation also requires
the agent to assist the property owner to fill out the Vendor's
Statement which should state the costs for the maintenance of
the building that are to be borne by the purchaser. The agent
should never withhold anything, and must provide the purchaser
with the correct information. Otherwise he will be in breach
of the regulations.
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