An estate agent added to the estate agency agreement a number of additional clauses that would deprive the client, as vendor, the right to cancel the sale, or to alter the listing price, before the conclusion of a legally binding sale and purchase agreement. The Disciplinary Committee ruled that this was against the principle of protecting client interest and ordered that the licence of the estate agent concerned be suspended. The agent was also ordered to take a training course.

The complainant in this case is the owner of a Home Ownership Scheme (HOS) flat. Last year he listed his flat in the HOS Secondary Market with the company the estate agent in question worked for. When the agency agreement was being signed, the estate agent urged him to sign a service agreement which was to be attached to the agency agreement. One of the clauses of this service agreement stipulated that if the vendor would choose not to sell his property after the Certificate of Availability for Sale had been issued, then the vendor would have to pay a certain amount of money to the agency company as "service fee". Another clause in the service agreement indicates that if the vendor fails to sell his property at the price listed in the service agreement, then the vendor will be deemed to have reneged on the sale and liable to the payment of not only the "service fee" but also additional charges.

The estate agent in this case had found a potential purchaser for the flat who would be willing to buy the flat at the listed price. However, since this potential purchaser was yet unable to obtain the Certificate of Eligibility to Purchase, the complainant had only indicated verbally that he would be willing to sell. No provisional sale and purchase agreement was signed.

Soon afterwards the complainant indicated to the estate agent that he wished to raise the price of the property in question, at which time the potential purchaser still had not yet obtained the Certificate of Eligibility to Purchase. The estate agent then sought payment of service fee from the complainant on the ground that the latter had reneged on the agreement. The agent later took his claim to the Small Claims Tribunal and the matter was eventually settled between the parties.

The estate agent, in response to the complaint laid against him, indicated that agents would normally apply for the Certificate of Availability for Sale for vendors in the HOS Secondary Market and that cost in marketing such flats would generally be higher. He claimed that it was necessary for extra clauses to be added to the estate agency agreement in order to protect the interest of the agent. He further indicated that the service agreement had been in use for properties in the HOS Secondary Market all along and that nothing had been hidden from the complainant, nor was there any intention to deceive him.

The Disciplinary Committee, having carefully considered all evidence, held that attaching the service agreement to the estate agency agreement might lead parties concerned to think that the service agreement was an integral part of the estate agency agreement, and that that was an improper act. Furthermore, the terms of the service agreement were set to protect the interests of the agent only, while trespassing on the client's right to freely dispose of his own properties. This was found to be in breach of section 3.4.1 of the Code of Ethics, as there was no advancement or protection of client interest. For this reason, the Disciplinary Committee ordered that the licence of the estate agent be suspended for a fixed period of time. In addition, a condition that the agent should attend a relevant training course was attached to the licence.