BEWARE – Estate Agents Who Act As Lawyers

Peter Mericka B.A., LL.BOPINION
by Peter Mericka B.A., LL.B
Real Estate Consumer Advocate
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
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Here is yet another example of an estate agent playing “lawyer” and messing things up.

Our client was relying on a bank loan to finance his purchase. He had included a “finance condition” in the contract, so that he could end the contract if his finance was refused. As so often happens, the bank was slow in approving his loan and he needed to have the contract amended to allow further time.

Everything was fine until an estate agent from Raine & Horne (Sungis Real Estate Pty Ltd) contacted our client to tell him that he could not have an extension of time, and that the finance condition had expired.

The estate agent’s advice was not only wrong. In our opinion, the estate agent committed a criminal offence by assuming the role of “lawyer” and offering our client what amounted to legal advice.

Had our client accepted what he had been told by the estate agent, he may well have found himself in dire circumstances.

Because of the distress caused to our client, we were forced to write to the vendor’s lawyers to ask them to control the estate agent. The lawyers were aware that the estate agent’s behaviour reflected on them, as well as on the vendor.

Here’s what we wrote to the vendor’s lawyers:

“We wish to draw attention to what we regard as improper direct contact with our client by your client’s estate agent, and the offering of incorrect and misleading legal advice by the estate agent. The estate agent contacted our client by telephone, and advised our client that the contract is now unconditional, and that no further loan extension would be considered by the vendor.

We seek your advice as to whether the estate agent was authorised by your office to contact our client, or whether the estate agent was assuming your role without your knowledge and without the vendor’s instructions. We regard such conduct has highly improper, particularly as it has caused our client some distress.

If the contact was made without your knowledge and your authority, we seek confirmation that you will control the estate agent and prevent further improper communication.”

We received the following reply:

We advise that our client has at no time instructed the agent to contact your client regarding the status of his finance approval. Our client has discussed this matter with the agent to ensure that this situation does not occur again. Our client apologises for any concerns this may have placed on your client.”

Fortunately, the matter was put back on track, but neither the vendor nor the vendor’s lawyers should have been forced to apologise for the improper conduct of the estate agent.

Estate agents regularly derail transactions by involving themselves in matters that are beyond their capacity. Consumers should always be wary of any contact initiated by an estate agent, particularly where the estate agent seeks to offer “advice” on the contract or legal matters associated with the sale.

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