How to fix

SOURCE: Hello,

YOU PROB APPLY TOO MUCH FORCE ON IT
THE PISTON PROB GOT DAMAGE
THAT EXPLAIN THE SMELL HAVE IT CHECK OUT BY A PROFESSIONAL.

SOURCE: demolition tool or breaker

The shaft from the motor to the drive gear is likely not working the action of the hammer. There is a gear which spins the gears to achieve the hammer action, suspect the gear is either stripped, broken or both.

SOURCE: Where do I ad oil to a makita hm1500 demolition

Go to http://www.makitatools.com/en-us/Modules/Home/Default.aspx, put your model number in search box in the top right. Two models of the HM1500 will come up, select yours and open the owner's manual. Find the paragraph labeled 'Lubrication' and follow it precicely. Demo hammers are very picky about what type of grease they use and how much. Too thick and they won't work, too thin and they won't lubricate properly and the parts inside are very expensive to replace. Same applies to how much to use.

SOURCE: makita sds max avt --when it is on the chisel only mode it still revolves like in drill mode . What has caused this ?

If the bit turns freely it's possible you have the change ring in the forward position. The HM0860C is a demolition hammer, not a rotary hammer so the bit should not be rotating under power for any reason. On the HM0860C the changing ring on the nose does slide forward to let you choose and lock the chisel bits in 12 different angles. Check to make sure the change ring is in the locked position.