Failing to deal with Building Orders in PASP

An agent who failed to advise his clients to deal with the Building Orders before entering into a provisional agreement for sale and purchase had his licence suspended by the Disciplinary Committee.

The estate agent concerned served both the vendor and the purchaser in the sale and purchase of a luxury flat. The land search records showed that the property was subject to two orders issued by the Building Authority relating to an earth-retaining structure. The vendor also told the estate agent about the orders and that he had paid his share of expenses for the remedial work to the Incorporated Owners. Before the signing of the provisional agreement for sale and purchase and on the advice of his solicitors, the vendor instructed the estate agent to specify in the provisional agreement for sale and purchase that the sale was on an "as is" basis, which the estate agent did. However, the estate agent did not mention the two orders in the provisional agreement for sale and purchase.

Thereafter, the vendor and the purchaser had serious disagreement over, among other things, whether any money (and if so, how much) should be set aside for the compliance of the two orders. As no agreement could be reached on this issue, the sale and purchase fell through with the vendor paying a hefty compensation to the purchaser.