Regulations on Advertising
|Circular No. 02-05 (CR)
Section 9(2) of the Practice Regulation provides that a licensed estate agent shall obtain a vendor's written consent prior to the issue of an advertisement in respect of the vendor's residential property.
In a standard clause in the prescribed estate agency agreement for use between a vendor and an estate agent (Form 3), the vendor may authorize the agent to issue advertisement in respect of the property concerned. In another clause in the same Form, the vendor may instruct the list price for the purpose of advertising. Practitioners should issue advertisements in accordance with the instructed list prices. Depending on the market conditions, a reasonable range may be put down as the list price.
In common law, an estate agent as agent of his client owes the client the duties to carry out instructions and to act in the best interest of the client. Section 9(3) of the Practice Regulation provides that a licensed estate agent shall not advertise a residential property at a price or rental or on terms different from that instructed by the vendor or landlord. However, it has been observed that some property advertisements on newspapers and the shop-fronts of estate agency establishments contain prices that are not instructed by the vendors or landlords concerned. Such prices are usually expressed as 'Try $….." or "Can try $…..". In this regard, practitioners should take note that no matter what it is called or what form it takes, to advertise a residential property at a price that is without the instruction or consent of the vendor or landlord is against the clients' interest as well as a contravention of section 9(3).