Practice Circular on Collective Sale of Property
With the renewed interest in collective sale of properties, CEA has issued a Practice Circular to guide the industry on the general duties expected of estate agents and salespersons when conducting a collective sale of a property.
Being agents to the Collective Sale Committee (CSC), estate agents and salespersons are sub-agents of all subsidiary proprietors. In view of this, they are required:
- To act in good faith and obtain the best price possible for all subsidiary proprietors;
- To act in accordance with procedures laid out in the Land Title (Strata) Act;
- To act even-handedly between all subsidiary proprietors;
- To avoid any potential or actual conflict of interest;
- To make full disclosure of relevant information;
- To act in a transparent manner and with conscientiousness, care and diligence;
- Not to make or attempt to make secret profits.
The Circular states that estate agents and salespersons are to be fully conversant and comply with the laws and requirements that govern collective sale transactions, and should have undergone relevant training to equip them with the necessary knowledge and skills. They are also required to be updated with the developments in respect of laws and practices relating to collective sales. Estate agents and salespersons are not to do anything that may infringe or lead the CSC to infringe on any legal obligation and the duties it owes to the subsidiary proprietors. Industry professionals are not to make any misrepresentations or exert undue pressure to procure agreement to a collective sale. They should not make, facilitate or participate in any incentive payments. In addition, estate agents and salespersons are to keep proper records of communications and proceedings of meetings in relation to the collective sale.
The Circular also reminds industry professionals to seek appropriate professional advice if they are uncertain of the scope of their obligations or encounter an issue beyond their knowledge of expertise.
For more details, please refer to the circular on the CEA website.