David Sowersby is the Director of Walshe & Whitelock Real Estate, Brunswick and an Associate of the Real Estate Institute of Australia. David Sowersby is also a “contract switcher”. Some years ago I pounced on Sowersby for “switching” contracts, and thought he had changed his ways. Unfortunately, it seems that when you’ve been in the industry as long as Sowersby has, old habits die hard.
Every property lawyer and conveyancing in Victoria is familiar with the grubby practice of “contract switching”. It’s where the lawyer or conveyancer prepares a contract for a vendor client, only to discover that the estate agent has “switched” the prepared contract for a simple one-page Contract Note. The Contract Note is a document distributed to estate agents by the Real Estate Institute of Victoria (REIV), supposedly to be used to assist a purchaser to submit an offer when no contract is available. Where a lawyer or conveyancer has prepared a contract for the sale the estate agent is required to use the prepared contract, and is not permitted to use the Contract Note.
Why do estate agents “switch” contracts? The most common reason is laziness. Basically, estate agents don’t know much about contracts, don’t like reading them, and certainly don’t like having to answer purchasers’ questions about them. The simple fill-in-the-blanks Contract Note is something of a no-brainer for the estate agent. Sometimes there may be more selfish reasons (See “Shane Lowe of Methven Real Estate – Switching of Contracts and Conditions“).
What was David Sowersby’s reason for “switching” a comprehensive Contract of Sale of Real Estate, containining special conditions designed to protect the parties, with a simple and inadequate Contract Note; particularly after he had been told off for the same thing in the past? I wrote to Sowersby as follows:
“I seek your explanation for your improper and unlawful “switching of contracts”. You were provided with a properly drafted Contract of Sale and you were clearly instructed in writing as follows:
“The REIV “Contract Note” is not to be used in this sale. We have been instructed to prepare the legal documents by which the sale of the above property is to be effected, and we have prepared the combined Contract Note and Section 32 Vendor’s Statement for this purpose. There is no need for the preparation of an REIV Contract Note
Our Contract Note and its Special Conditions provide the vendor with maximum legal protection, and take into account such issues as land identity, purchaser acknowledgements and warranties, and comprehensive default provisions. No part of it is to be altered without prior consultation with us.”
Despite these clear instructions, the contract was secretly switched and replaced with a “fill-in-the-blanks” Contract Note drafted by you personally.
No person from your office made any attempt to discuss the matter with the vendor’s legal representative, nor was our client advised to seek our advice before being invited to execute the substitute contract note.
I believe that you deliberately kept your switching of contracts from me because you knew that I would not allow it, and that I would have advised my client accordingly.
Mr. Sowersby I regard your conduct as an illegal act of deception, requiring a full and immediate explanation.”
Sowersby had no explanation to offer.