EAA regulates the practice of estate agency in Hong Kong, raise the competence of practitioners and set high standards of ethics and conduct befitting the trade.
Introduction
Alexander was Manager of Planning in a real estate development firm and was responsible for recommending a contractor to conduct an environmental study. He was considering Gamble, a small firm which had done outstanding work for the firm in the past. Roy, a friend and representative of another larger environmental research firm, approached Alexander on the matter over a lunch appointment. Alexander clearly stated that Gamble would possibly get the contract because of its satisfactory past performance, whereas Roy’s firm had a dozen other contracts to keep them busy.
Roy seemed disappointed but Alexander was glad when conversation turned to other topics. Roy asked Alexander about the progress of his emigration plan. In fact, Alexander’s wife, Zoe, had already gone to Canada with two sons to settle down first while Alexander would work a few more years in Hong Kong before joining them. Roy mentioned casually that he had connections in Toronto and could help Alexander place his sons into the best local school though it might take some doing. The school enjoyed a reputation for good results and easy access to the University of Toronto. Alexander understood what Roy really meant. He desperately wanted to make a head-start for his children and pave a smooth path for them.
Would Alexander commit any offence if he recommended Roy’s company in return for Roy’s help for his sons? What factors should Alexander consider when making the decision?
It would be an offence of Section 9 of the Prevention of Bribery Ordinance (POBO) if Alexander, as an employee of the real estate development firm, without the approval from his employer, accepted advantages from Roy (i.e. Roy’s assistance in placing Alexander’s two sons into the best local school in Toronto) as a reward for helping Roy’s firm to get the business contract of environmental study. Roy would also violate POBO for offering bribes.
Also, Alexander might violate his company’s code of conduct if he did not disclose his relationship with Roy to the management when there was conflict of interest.
Apart from the aspects of compliance and company code of conduct, Alexander may also consider the following factors when identifying viable alternatives and choosing the best course of action:
The ETHICS PLUS ethical decision making model might be helpful for him in solving the dilemma.
Timmy, an estate agent, was commissioned by Mrs Chung, a landlord, to sell a residential unit at $9,000,000. Ms Lam, a client, expressed willingness to buy the unit at $8,780,000 but instead of informing Mrs Chung of the offer, Timmy told Mrs Chung that a client had agreed to buy her unit at $8,580,000 in the name of a limited company. He persuaded Mrs Chung to sell the unit at a reduced price for cash flow reason as there were signs that property prices were going down. Mrs Chung eventually agreed. However, Mrs Chung later found out that, after the transaction was completed, the buyer had immediately sold the unit to Ms Lam at $8,780,000. She reported the case to the ICAC which subsequently revealed that Timmy was one of the shareholders of the limited company which was the buyer.
As a licensed estate agent, Timmy should observe the Code of Ethics of the Estate Agents Authority. Estate Agents and salespersons, in engaging and accepting an appointment as an agent, should protect and promote the interests of their clients, carry out the instructions of their clients in accordance with the estate agency agreement and act in an impartial and just manner to all parties involved in the transaction. Also, they should avoid accepting an appointment involving a property in which they have a beneficial interest. Any pecuniary or other beneficial interests in relation to the property shall be disclosed fully to all parties concerned.
Timmy’s dishonest behaviour not only caused loss to Mrs Chung and Ms Lam but also tarnished the reputation of the trade. Timmy’s conduct might constitute a criminal offence of fraud under Section 16A of the Theft Ordinance.
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