 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.
|