Estate Agents As “Legal Advisers”?

[Author – Tim ODwyer]

Harcourts real estate agent, Lester Drew, in a recent letter to the editor of Queensland’s Courier Mail criticised an earlier column in that newspaper about selling real estate. Drew pointed out in his letter (as published) that columnist Scott Pape was a financial advisor, was not a “registered member” of the Real Estate Institute of Queensland and was “not professionally qualified as deemed by the State Government to give any expert advice relating to sales to prospective property sellers.”  Moreover, it appeared to Drew that Pape had no understanding of the stress many sellers experience when deciding to market their homes.

Drew then stated that “professional agents” were not only skilled in marketing but also were available “to give advice and provide assistance on many subjects ranging from presentation of the home to important detailed legal issues.”  He was thus clearly asserting that Queensland’s estate agents, particularly REIQ members, were professionally qualified (with government endorsement) to give “expert” legal advice and assistance to seller clients.

What a crock!

My blood boiled – especially since only a month earlier Drew’s wife and fellow agent, Robbie Drew, had run her own Harcourts Drews advertorial column in the Jimboomba Times.  Entitled “How to Submit an Offer”, this freely provided some less-than-accurate legal advice to buyers:

A real estate agent must present all reasonable offers to the owner so the agent can not pick and chose amongst the offers favoring one particular buyer.  But just because a vendor has your offer and is giving it serious consideration does not mean other offers are not coming in simultaneously.  Unfortunately for the buyer, this means that someone else can top your offer in the interim.
          
One move to counter act these factors is to make your offer with a date of expiration.  This could vastly aid your cause, because it gives a sense of the imperative and forces the vendor to make a decision.

When making an offer you can also make it subject to various conditions.  This favors the buyer, but, remember the more conditions you place on the sale, the less chances you have of your offer being accepted.

Most importantly, offers are not legally binding until both the buyer and the seller have signed a contract note (or contract of sale), and they have been notified that the other party has accepted the offer.  The contract must contain details of the property.  This should always be double-checked and include price, deposit and settlement.

While the seller is not under any obligation to accept your offer, its still remains the case that a written, unconditional offer with a deposit cheque attached can be very persuasive in helping you secure the purchase.

If you are looking to buy a property feel free to phone me… for friendly assistance.

Do you get the picture?

Sellers and buyers alike, who deal with any of Harcourts Drews’ offices, can be assured of expert, professional and friendly legal advice and assistance.  And to hell with conflicts of interests and fiduciary duties!

But what really got me steamed up was this pair’s obvious ignorance of  the fact that Queensland agents are expressly prohibited by law from giving legal advice to clients or customers.

Section 24(1) of Queensland’s Legal Profession Act 2007 provides that you must not “engage in legal practice” in this state unless you are an Australian Legal Practitioner.  This consumer protection prohibition is qualified by a declaration in Section 24(3A) that an estate agent is not “engaging in legal practice” when preparing a contract or document as part of performing the “work” of a Property Agents and Motor Dealers Act licencee.  But such “work” does not include “giving legal advice” in relation to a property contract or other document.  (For more about Queensland agents’ legal right to prepare contracts see: Move Over Marx Brothers, Here Comes the Bligh Government)

Needless to say, as soon as I received Robbie Drew’s advertorial (after a keen client sent me a clipping) I passed a copy on to Queensland’s Legal Services Commissioner.  He is charged with policing the Legal Profession Act.  Because the commissioner was on leave, a Principal Legal Officer of the Legal Services Commission replied:

The problem as I see it with the advertisement is that it is very hard to see how it could be seen to be “engaging in legal practice”.  Whilst there are provisions that specifically state that giving legal advice is not part of an agent’s work, that in my view would only relate to where the agent gives specific advice about a real contract to a real buyer/seller.

Accordingly in circumstances where the agent gives (free) non-specific advice about matters relevant to Contracts generally, that would not amount to giving legal advice and would not amount to a breach of Section 24.

With respect, what a crock!

When Lester Drew’s Letter to the Editor appeared I again wrote to the Legal Services Commissioner and asked what action he might now take regarding Robbie Drew’s “offensive advertisement as well as this outrageous and mischievous public assertion”.

Blow me down, the same Principal Legal Officer replied:

I have seen the letter you referred to.  However, regardless of what it says, I think my earlier comments still apply.

A person cannot be seen to be engaging in legal practice just because they state they would like to.  The statement in the letter along with the statements in the advertisement are very general and non-specific.

The commission will not investigate this matter any further unless there is sufficient evidence linking the conduct to a particular transaction.  Merely talking about giving legal advice is not enough to prosecute anyone.

I tried to keep my cool about this disappointing reply, but wrote back rather snappily if not also helpfully:

Perhaps the LSC could be a little proactive here.

Would it be too hard to write a stern letter to these clowns?

Or to the Harcourt’s head office?

Maybe even a letter to The Courier?

And how about a media release warning consumers and agents alike?

Why not all four initiatives?

I received this snappier and less helpful reply:

Your comments are noted but as previously stated the Commission will not be taking this matter any further.  Maybe you could refer it to the new Queensland Law Society President?

Watch this space … but don’t hold your breath!

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