Contract Switching and Lies at Ranges First National Real Estate
OPINIONby Peter Mericka B.A., LL.B
Real Estate Consumer Advocate
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
Hot on the heels of the contract switchers at Barry Plant Real Estate Croydon comes Ranges First National Real Estate of Belgrave. But things get much worse when the switching of contracts is compounded with lies and threats as part of an attempted cover-up.
The contract switch
As usual (see other postings on contract switching), we told the Ranges First National Real Estate not to use the REIV Contract Note in our client’s sale, as we had prepared a full Contract of Sale for this purpose. And as often happens in contract switching cases, the first we knew of the switch was when the estate agent sent us an REIV Contract Note attached to the Section 32 Vendors Statement.
I immediately sent a fax to Ranges First National Real Estate, addressed to sales consultant Jim Conder, and estate agency director Rik Rushton, asking for an explanation. Here is the explanation Jim Conder left for me by voicemail:
“Peter it’s Jim Conder from Ranges First National, I know you’ve sent us a fax in regards to the contract note. There was no deception in using that, what’s happened is that the page in regards to not using a contract note was faxed to us and put in our file, the section 32 we had emailed and uploaded that, so what’s happened is we’ve got the section 32 prior to the fax, and given that to the clients, and obviously that fax has been put in our main file, and you’ll notice that the contract was written up the very next day. So, it’s just obviously that fax did not come to my attention until that’s obviously been drawn up. I’m happy to have it written up by both parties if that’s an issue, but there was no-one hiding anything or not wanting to use it. It’s just that the fax has gone into one section, and the emailed section 32 has gone into another…”
OK, apparently poor office management had meant that an important fax from the vendor’s lawyer had been filed without being read. I accepted this. However, Conder’s explanation that he had received only the Section 32 did not ring true. The Contract of Sale and the Section 32 had been sent in a single PDF document, so it was not possible for Conder to have received only the Section 32. I concluded that Conder was telling porkies!
ASIDE: As disgraced US President Richard Nixon discovered, bad behaviour is one thing, but it’s the lies and the cover-up that can really compound a problem.
The lies
I wanted a proper explanation and so I wrote, not only to Conder but also to the Director of Ranges First Nation Real Estate, Rik Rushton. Here’s some of what I wrote:
“Mr. Conder’s Implausible Explanation
I have received a voicemail message from Mr. Conder, offering (his) explanation for the switching of contracts…Unfortunately, Mr. Conder’s explanation does not ring true for the following reasons:
Our policy in preparing sale documents is to ensure that the Contract of Sale and Section 32 Vendors Statement are combined in a single document.
A check of our records confirms that the complete Contract of Sale, incorporating the Section 32 was emailed to your office on 4 August, 2008 as a single PDF document. Mr. Conder also confirmed having received the emailed document and having opened it.
Mr. Conder’s explanation regarding his having received only the Section 32 is thus proven to be false. Please check the email again to confirm this for yourself.
Whether or not Mr. Conder received our faxed warning regarding the use of the REIV Contract Note is immaterial. I put it to Mr. Conder that the separation of the Section 32 from the rest of the Contract, and the discarding of the first five pages of the document we emailed to him was, in the circumstances, intentional, illegal and deceptive.
Mr. Conder’s Proposed Remedy
I note Mr. Conder’s offer to rectify the situation:
“I’m happy to have it written up by both parties if that’s an issue.”
How on earth is Mr. Conder going to do this when the deal has already been completed? Does he intend offer the vendor “legal advice” on canceling one contract and writing up another? Does he intend to discuss his proposal with the vendor’s lawyers at all? Is Mr. Conder qualified to deal with a contract in this manner?
Further Explanations Required
Mr. Rushton, as Director of Ranges First National Real Estate, and employer of Mr. Conder, I require your full explanation for this debacle. I would suggest that you carefully examine the communications between your office and ours in order to confirm for yourself that Mr. Conder’s explanation for the switching of contracts is false, and then advise me as to how you intend to handle the matter.
Please note that this sale has been finalised, and you are directed to take no part whatsoever in any discussions with the parties involved. Any communication with the purchaser is to be conducted through the purchaser’s solicitors, and any communication with the vendor is to be conducted through my office.
Rushton responded with a long-winded letter full of denials, including:
“1. …Your office proceeded to send a copy of the Section 32 Vendors Statement only by email. This document was used within 30 minutes of receipt by Jim Conder to secure a written offer on the subject property.”
This assertion by Rik Rushton, the Director of Ranges First National Real Estate was a lie! When Conder had finished his record-breaking 30 minute sign-up of the parties (presumably including time for Conder and the purchaser to read and to understand the documents), the Section 32 included 3 pages of special conditions from the Contract of Sale we had prepared! Of course, there is another possibility which would explain how 3 pages of the contract found their way into the Section 32 – they could have been slipped into the documents AFTER they had been signed, and BEFORE they had been sent to the parties’ lawyers. But that would have been sneaky, dishonest and illegal, wouldn’t it.
Rushton’s letter also included at Item 4:
This office, its Director and Sales Professional, Jim Conder, refute totally your false and baseless allegation of deception on our part and deny fully anY “secret switching” of contracts in the strongest of terms.”
and concluded with:
“In closing, we have no intention of proving our case in such correspondence. We have provided this response to your initial letter for the purpose of providing clarity to you with respect to the email and facsimile time lines.
We do however require your written retraction of matters relating to your false allegations as detailed in our item 4 immediately and confirm that we retain the right to seek remedies from the relevant bodies in the event of your failure to comply.”
Rushton’s letter also included reference to his having forwarded a copy to the Law Institute of Victoria and the Real Estate Institute of Victoria. Obviously, Rushton wanted me to know that I could not accuse him and his staff of deceptive conduct and get away with it.
I wrote to Rushton again, pointing out the falsity of his account, to which he replied:
“I confirm that unless you comply with our fair request to withdraw in writing your false and serious allegations, as per point 4 in the stated correspondence, we will be passing this matter over to our company solicitors…As stated previously, we have nothing to hide and we will not allow such allegations to dishonour our good name.”
I wrote to Rushton again,
“…my complaint regarding the improper switching of contracts stands, and in my previous letter to I have exposed your explanation as a clumsy attempt to cover up your company’s improper conduct.
You have trashed your own reputation, first by the switching contracts and then by the submitting of a false account of the circumstances. I note that you have not (cannot) address the inconsistencies I have put to you.
Please pass this matter over to your solicitors as soon as possible. I look forward to hearing from them.”
Apology from Ranges First National Real Estate
Eventually, I received a letter from the solicitors acting for Ranges First National Real Estate. The only explanation offered was:
“Our client apologises for not using your form of contract, but there was a sale which needed to be tied up and in the interest of your mutual client, he did this in the best way he could.”
In my opinion, that short sentence from the the solicitors representing Ranges First National Real Estate says much more than was ever intended!
Conclusion
It’s difficult dealing with estate agents who think they can ignore directions from a client’s lawyer and get away with it. It’s even more difficult when they puff themselves up, use lies to cover their tracks, and write to the Law Institute of Victoria to falsely imply that they have been wronged, when it is they who are the wrongdoers.
Is it any wonder that contract switching and other improper estate agent behaviours flourish in the Victorian real estate industry.
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