 Mr Stevens was planning to get married at the end of the year and settle down in Hong Kong. He instructed estate agents to look for a suitable flat for him. One of the agents found him a flat near his place of work, and the price was within his budget. The flat was open-plan and had no partitioned bedroom or separate kitchen. Though small, it had everything. At the time, the flat was occupied by the vendor himself. As the vendor was self-employed, various office equipment could be seen in the flat.
Mr Stevens and his fiancee were quite satisfied with the flat. The agent also said that he had all the property information of the flat to hand except the user which he would obtain later. Seeing that the vendor had all along been living in the flat, Mr Stevens did not doubt that it was a unit for residential purposes. He therefore signed a provisional agreement for sale and purchase with the vendor and paid a deposit on the spot in accordance with the agreement.
Two days later, the agent obtained the Occupation Permit for the building where the flat was located. To his surprise, the flat was designated for non-residential purposes. Mr Stevens then sought the opinion of a lawyer friend and learned that a property had to be used for the purpose specified in the Occupation Permit issued by the Buildings Department and that there might be different purposes specified for different units within the same building. If the property was used for a purpose other than the specified user, the title might be affected, giving rise to problems when the unit was put up for sale in future. Moreover, the authorities may also issue an order forcing the owner or the occupant of the property to desist from the illegal use or face prosecution.
As the user of the flat did not allow it to be used as a residence, the estate agency agreement between Mr Stevens and the agent was void, and there was no obligation or liability for commission between them. On his own initiative, the agent negotiated on behalf of Mr Stevens with the vendor and ultimately succeeded in getting the vendor to cancel the agreement and return the deposit. All things considered, Mr Stevens was lucky to have come out of the event without any loss.
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