Open For Inspection – Open For Theft!

OPINION
by Peter Mericka B.A., LL.B
Real Estate Consumer Advocate
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

Some time ago I wrote a posting about thefts during property inspections, and noted that some estate agents were including clauses in their sale agreements with vendors that indemnify the estate agent against theft or damage during a property inspection. I also suggested that it is time to “take estate agents and thieves out of vendors’ homes“. My last posting drew attention to a pair of estate agents who advise potential purchasers to secretly invade the privacy of home-owners by “sneaking a peek” into cupboards in order to identify whether the vendor will “sell at ANY PRICE…“. The material in this posting was provided by the victim of a typical open house theft, and provides harrowing details of the violation, loss, bullying, stress and indifference a theft victim can experience.

Open House Theft

“I had been renting the one bedroom unit for about three years.

I received a letter from the managing agent saying that the owner wanted to sell.

The estate agent insisted on having “open house” inspections, which I objected to, but I was told I had no choice.

During the week of the 2nd of April, 2007 I was called by the selling agent and told there would be an open house that weekend. I told them that was fine, as I would be away for the Easter long weekend but would tidy the house before I left.

I arrived home  on Monday afternoon and immediately noticed things were amiss. There was a book splayed open on the floor just inside my front door. Maybe the agent had bumped it off the shelf on their way out, no big deal. Also, a couple of pairs of my underpants were on the floor next to their drawer in my bedroom. Odd, but conceivable I could have left them there in my hurry to pack on Friday morning.

After that I went to put on a load of washing and found the mug of $1 coins I kept for the washing machine to be missing from the drawer in my lounge room. At this point I thought someone had been opportunistically rifling through the drawer when the agent was in the other room and pocketed my $35-odd of washing machine money – annoying but no big deal.

I immediately called the agent and left a message on his phone. I think it was after this I discovered some other items missing: my phone charger, my digital camera and watch (also in the drawer with the coins) and the camera’s charger. I called the agent back and eventually talked to him; he was very apologetic but could not say how this might have happened as it was a different sales-person had conducted the inspection for that weekend as he was out of town.

Over the subsequent week I found other items missing from my unit, including my passport, film camera kit and a bottle of scotch. The items were missing from all over the unit and other documents, drawers and cupboards had been rifled through. In total these items cost me over $3000 to replace.

By Tuesday afternoon I had spoken to the sales-person who had actually conducted the inspection, but getting to that point was difficult. Nobody would ring me back. In frustration I called the estate agent directly to escalate the matter.

The estate agent told me to stop accusing his staff of thieving my stuff. I told him I was doing no such thing and I had no idea how this happened but as I was away for the weekend it was certainly connected with the open house inspection. It was obvious from his response (which included a threat to get the police involved – he seemed to think that this would bother me; but I had already called them) I was going to get no more assistance from him.

The Crime Scene Unit came and went but they were unable to isolate any fingerprints. I emailed the estate agent the police incident number.

On that following Wednesday I got a call back from the agent. “Finally, a response!”, I thought.  But no; it was the selling agent telling me they were holding another open house that weekend!

I do not believe that I swore but I made it abundantly clear that there was no way in hell they were ever having another open house inspection in that property as long as I was there. And if he or anyone from that agency entered the property without my knowledge and express permission there would be hell to pay. And I ended the conversation there.

By this time it was clear to me that the estate agency had no interest in compensating me for the goods I’d had stolen from my home (and less likely that I would I receive an iota of empathy or sympathy for having had strangers ransacking my house and personal belongings).

In August, I sent the estate agency a letter outlining my complaint. I told them I believed they had a duty of care for my apartment and belongings while they were conducting inspections at my home and that, as they had not fulfilled their responsibilities, I wished to claim compensation for the missing goods. I said that if I did not receive satisfaction I would take the matter to the Tribunal. I included a detailed list of the missing items and their replacement costs.

Two days later I received a response from the estate agent himself. In it he claimed the bona-fides of the people who had been through the house that day had been verified, questioned the fact of the theft (and thus, in writing, accused me of lying), and disclaimed any responsibility.

I made an application to the Tribunal, requesting an order for compensation for the goods stolen.

While all this was going on, the estate agent was still pressuring me to allow more open house inspections. I kept telling him that there was absolutely no chance I would allow it.

I was flabbergasted. I told them (on the phone, and later in writing, in no uncertain terms) that they had lost the right to demand anything of me, and that I would not allow people to inspect the unit unless I was present.

They then threatened me with eviction, saying that I must allow “… reasonable access on a reasonable number of occasions“. I confirmed, several times, that I would be happy to personally host individuals or couples for pre-arranged inspection appointments, and I would endeavour to be very flexible as to times. But I would not have a parade of strangers marching through my house in my absence. I believed that to be in accordance with the law.

I attempted to assess my legal position by calling the Office Of Fair Trading, but I found them to unequivocally useless. It is not their fault, but as they are unable to give legal advice or even attempt to interpret the law, they fundamentally could not help me. When I asked if, as a tenant, I am compelled me to allow “Open House” style inspections I was told that I must allow “…reasonable access on a reasonable number of occasions“. I said that I could read too, but asked if that meant I had to allow open houses, and leave while they were conducted. They simply repeated that I had to allow “… reasonable access on a reasonable number of occasions“.

In May an eviction notice arrived, claiming that as I had breached the terms of my tenancy I must vacate the premises within 21 days. I responded saying that as I had not breached my tenancy, they were required to give me a 60 day “no cause” termination notice. I reiterated my amenability to arranging inspection times for individuals or groups and restated that if they came onto the premises without my permission there’d be trouble.

The initial Tribunal hearing was held in mid May, and myself, the estate agent and the two sales-persons involved were present. The sitting member heard our statements; and the estate agent tried to get my complaint dismissed on a number of technicalities. The member gave us an opportunity to mediate. This was, unsurprisingly, unsuccessful. The member decided he’d hear the case and set a date for us to return.

By this point I managed to speak to a helpful person at the Tenant’s Union. They advised me that the tribunal would only allow claims for the “depreciated value” of goods (basically, what you’d get for them on eBay). But they also told me I could claim for “non-economic loss” (i.e., stress) up to a total claim of $10,000. So I did some research on the “depreciated value” of the goods I was claiming and was given leave by the member to amend my claim from over $3000 to $1477. And I added an amount of $8503 for “non-economic loss”.

The estate agent received the amended claim and called me. He told me that if my action in the Tribunal was unsuccessful he would take steps to recover his expenses and time. I asked him if he was threatening me. At that moment, with him still on the phone, I arrived home to another eviction notice from his agency citing “no cause” and giving a date sixty days hence. I immediately thanked him for the progress we seemed to be making (finally, they apparently agreed that the first eviction notice was unlawful) and asked him if he had any more to say. Then I hung up.

That sixty days gave me the time I was expecting to arrange other accommodation and before it was up I handed in my notice to quit the property. Just before I did, I sent the estate agent a “without prejudice” letter offering to settle the whole matter for the “depreciated value” of the stolen goods only, $1500. I did not receive a response.

On the day of the hearing the member (a different one this time) again heard our statements. The member expressed disdain for the estate agent’s tactic of trying to get my case dismissed on technicalities, shot down his accusation that my recalcitrance had prevented them from selling the property for, by that time, six months (“If you can’t sell the property, you need to lower the price!”) and disgust at the blatantly intimidatory and unlawful first eviction notice.

At the end of the proceedings the member had basically said that she was going to side with the applicant (me); we had two choices. We could take the time she used to write up her decision to come to a settlement and she would make that binding or we could wait for her judgement and that would be the final word. The money or the box, in effect.

The estate agent and I once again went out into the corridor, and he asked what my offer was. I was surprised by this, as the Tribunal member had just said, on the record, that I’d won. Wasn’t he supposed to be making offers? In any case, I told him that subsequent to my initial offer of settlement I’d had to do a whole lot of preparation for the hearing (including getting my friends, family and colleagues to sign statutory declarations asserting my high stress levels). Therefore the amount I would be happy to settle for had increased to $2000. After more attempts to negotiate (I had serious trouble working out what was going on here — he had already lost, why did he think he could negotiate?) I was offered $750.

I was speechless. I pointed back into the hearing room.

The judgement was then read by the tribunal member, with explanatory comments indicating that real estate agents who dealt with educated, articulate, well-spoken, tidy professionals who always paid their rent on time should count themselves lucky and treat them well. Treating a tenant well does not extend to negligently allowing their possessions to be stolen, then attempting to illegally evict them when they have the temerity to complain.

I was awarded $1477 (the full amount) for the goods, plus $3000 for “non-economic loss”. I thanked the tribunal member. The estate agent asked a question about the appeals process and turned on his heel and left.

This hearing was in mid-August. I expected to find a cheque in the mail when I returned from an overseas holiday. Instead, I found a letter from the tribunal indicating a stay of the order to pay had been granted until such time as an application for a re-hearing could be organised. This took another couple of months. The re-hearing application was (obviously) denied.

I once again called the estate agent to ask him if he was going to send me a cheque or if I had to call the Sheriff. He told me he was seeking legal advice and I should “Do what I had to do”. I did, and registered the judgement with the local court, and got a writ issued against my landlord, care of the estate agency. The cost of registering the judgement and issuing the writ was added to the amount to be recovered, plus interest.

The writ came back to me shortly after Christmas marked not served as the person the Sheriff spoke to in the estate agency said that my landlord (to whom the writ was addressed; his name was technically on my lease) was not at that address. Undeterred, I found an address for my landlord (difficult) and went to the Sheriff’s office to find out if I could simply change the address and get the writ served again. To my surprise they told me that they had received a cheque in relation to that matter already and I would get the money when it cleared!

So on January 29, 2008 I was finally able to bank the cheque from a judgement issued in mid-August, the consequence of a dispute arising in mid-April.

I have learned a number of things over the course of this experience. Firstly, the government “watchdogs” are not much help. The legislation is notoriously ambiguous, and public servants are not allowed to offer legal advice on its interpretation.

The good news is you will get a fair hearing. Neither of the Tribunal members I dealt with were biased toward agents or tenants. The flipside of this is they don’t take any crap, either. Which leads me to the next lesson: substantiate everything. Even though the Tribunal is not a court, it’s similar, and you will not get away with hearsay or circumstantial evidence.

The standard of proof which applies at the tribunal (“on balance of probabilities”, rather than the criminal court’s “beyond reasonable doubt”) means that much more is admissible: printouts of eBay auctions validating “depreciated value”; copies of receipts or manuals to verify ownership; statutory declarations or signed statements from family and friends testifying to your emotional state. If you are going to make a statement at the tribunal, you need to back it up somehow. Being fastidious will endear you to tribunal members who mostly preside over the disorganised and inarticulate.

Finally, don’t take any crap from the real estate agents. Make no mistake, as a renter you are not their customer and therefore they do not care one whit about you or your problems. But don’t worry, if you are in the right and you are persistent, there is justice to be had.”

Conclusion

As discussed the article “Escorted Inspections“, petty theft is a major problem in estate agent controlled inspections. Opportunistic petty theft can take place whenever a person is given the opportunity to discover something that has been left unguarded, whether it is a tangible object or the unauthorised obtaining of information.

The following safety tips will ensure that the property and privacy of owner-occupiers and tenants are protected during property inspections:

• Property inspections should be conducted by the property owner in person. There is no need for an estate agent to be present when a potential purchaser inspects a property. Estate agents conduct escorted property inspections simply to be in a position to prove that the visitor was “introduced” to the property in accordance with the estate agent’s Exclusive Sale Authority.
• If an estate agent is to escort a potential purchaser to the property, the vendor should ALWAYS be present. When the person visiting the house knows that the owner of the house is present, there is a natural respect that comes with being the owner’s guest. Visitors always seem to be “on their best behaviour”, and they like to have the vendor nearby as they look through the house.
• An estate agent cannot order a tenant from the property. Allowing “reasonable access at reasonable times” in order for potential purchasers to inspect a property does NOT allow an estate agent or a vendor to order a tenant to absent themselves from the property during the inspection. As stated above, the tenant should ALWAYS be present when visistors are shown through the property.
• The occupier of the house should accompany each visitor into each and every room. Not only does this prevent sneaky breaches of privacy, and petty theft, it also allows the visitor to feel comfortable in the knowledge that no allegations can be made if something is later found to be missing or interfered with. In addition, the visitor has immediate access to the vendor, the true expert on the property, to ask questions about the property.
• Visitors to a property should never enter rooms on their own, or open cupboards or drawers without permission. Common sense is the best guide for visitor conduct in a vendor’s home. Ask yourself, “Would I do this if the vendor were standing here watching me?” If what you are doing can be described as “sneaky“, then it is probably dishonest and highly illegal.

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