A Case Study
Tenancy agreements: Always check the Occupation Permit

In a recent case, the EAA Disciplinary Committee ordered an estate agent to attend courses in core subjects (including land search, tenancy law and sale/purchase of property) under the Authority's Continuing Professional Development Scheme. The reason? The estate agent failed to check a rental property's Occupation Permit and to tell her client that the property was to be used only as a carport.

The property in question was situated in a post-war residential building with two entrances on split levels in the basement. On the lower level were upper and lower portions. The lower portion was partitioned into residential units where the property was located. Viewing the building from the outside, it was difficult to tell that it had been converted from a car park.

After moving into the property, the tenant discovered that the property could only be used as a car park. Since neither the estate agent nor the landlord had brought this to her attention before signing the tenancy agreement, she filed a complaint against the estate agent with EAA.

Disciplinary proceedings were commenced against the estate agent for her failure to disclose the actual use of the property contrary to paragraph 3.4.1 of the Code of Ethics issued by EAA. (Estate agents should protect and promote the interests of their clients and act in an impartial and just manner to all parties involved in the transaction.)

The estate agent admitted that she had failed to check the Occupation Permit, saying that she had relied on the word of a representative of the landlord, a well-known developer in Hong Kong. The estate agent also conceded that a land search did not reveal an exact flat number for the property.

After careful consideration of the evidence presented by the parties at the inquiry hearing, the Disciplinary Committee found that the allegation made by EAA against the agent was well founded and exercised its disciplinary power of attaching study conditions to her licence.