Agents should disclose all information pertaining to a property before concluding its sale
The Code of Ethics published by Dubai’s Real Estate Regulatory Agency (Rera) states that agents should disclose all the information pertaining to the property before concluding the sale.
But when it comes to selling properties where any horrific incident such as suicide, natural death or gruesome murder has taken place, property agents say owner refrain from revealing the facts in fear of the price crashing or failure to ever find a buyer.
A CEO of top brokerage firm, who asked not to be named, told that property agents should not be blamed as sellers themselves do not disclose such facts when listing their properties.
“There are very less chances that brokers will know of any mishap in the property. The sellers are not going to disclose them having fear of the running down the price.”
“There is no media news either with respect to any of the mishap pointing to a particular property or so. The group that would know closely these facts are the neighbours or the neighborhood to a certain extent, which comes to light only when they moved in the property or started using them.”
He asserts that brokers can’t be held responsible that, simply because these facts are not to be known to the brokers, unless it is made so public.
This website has reported earlier that tenants tend to move out of buildings where any horrific incident has occurred.
A “haunted” house in Hong Kong, where a horrific incident has occurred – suicide, natural death or gruesome murder — sells for almost 10 to 30 per cent below the market price.
Depending on the type of death, the house will become more or less “hongza” a Cantonese term that literally translates as “calamity house” and will sell at 10 to 30 per cent discount of market prices, a recent CNN report said.
Over 5,000 real estate practitioners in the city, according to figures from the Society of Hong Kong Real Estate Agents, are bound to keep tabs on “hongza” properties following a 2004 court decision making it compulsory for estate agents to report houses with a dark history, it adds.
“If an estate agent acting for a purchaser knows, or ought to have known of the occurrence of a tragic incident in a property, and knew or ought reasonably to have known that this would materially affect the value of the property, that agent would owe a duty to alert its client to that fact,” judge Benjamin Yu said in the judgment.
Following a murder or suicide, a property’s value could drop by as much as 25 to 30 per cent, Yu added.
When asked if he inquired about the history of the property, Ashwin Kumar, who recently bought an apartment in Dubai Marina, said: “I never asked any question about the property history to my agent, nor did he ever tell me anything. I had a few queries for which I got satisfactory answers.”
A number of property agents whom we spoke to said their clients never asked them on history of the property especially if there had been any untoward incident in the apartment/villa.
The Code of Ethics in Dubai states that agents should disclose any fact, information, knowledge, which may adversely cause financial loss to their client.
It is written into the law, agents/brokers and registered real estate establishments who ignore all or even part of the Code of Ethics, can expect to be questioned by Rera officers, investigated, and may have to qualify their actions and/or conduct.
If in breach, they and their broker office may also be subject to disciplinary action and penalized. Any financial loss, the individual and the office establishment they represent (the broker office/agency) may be asked to compensate the victim if it is found to be the fault made by the registered broker and or their office depending of the violation and frequency of complaints.
A disciplinary and penalty system is inbuilt into by-law no. (85) of 2006, Chapter 6 with provision for cancellation of the broker’s registration. Omission of relevant information is as bad as false and misleading information, states the code.
Since there is no database of “hongza” houses, the best way here to avoid buying an unlukcy house is talk to the neighbors and get information from the nearest police station.