More On Why Agents Should Not Be Allowed To Prepare Real Estate Contracts

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

The fully-signed contract for a client’s purchase of a residential investment property arrived by mail at my office on 4th April. The selling agent’s covering letter was dated 3 days earlier: 31st March. This contract, which the agent had cobbled together and arranged for signing by the parties (without any solicitors’ involvement), was dated 2 days earlier again: 29th March.This purportedly binding agreement was subject to the buyers’ obtaining satisfactory finance approval by 4th April (the day I received the contract, and a mere 6 days from the ostensible contract date!) It was also subject to the buyers’ obtaining satisfactory building and pest inspections by 28th March (that’s right, one day before the date of the contract!) Settlement was due and looming for 28th April. Never mind there would be three public holidays in the meantime.

The sellers’ grossly incompetent agent, part of a national franchise, had recklessly inserted fixed dates for the finance and inspection conditions before getting the buyers to sign. Never mind again that it would be almost a week before the sellers signed.

This nonsensical situation was further compounded by a law (in Queensland) which stipulates that parties are not bound to a residential contract until the buyer’s solicitor has received it. No doubt the agent’s thinking, if such a mental process ever occurred, was that the parties’ solicitors would probably sort everything out later.

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Marketeering Victims' Lament

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Former interstate clients of litigation lawyers Carter Capner have shared these anonymous comments:

"This whole sorry marketeering experience has taught us a great deal about justice and integrity Queensland style.

First we were deceived by people usually recognised as acting in positions of trust - banks, financial planners and solicitors. All in bed with the crooks- so much for duty of care!

Then the Queensland Government had a go - retrospectively changing the laws because there was likely to be a huge rush of claims against the Fidelity Fund set up to protect people from real estate agents’ fraud. Of course the Government had been dipping into this fund for years to pay for a whole raft of worthy projects, so there simply wasn't enough money left to pay the people who had been ripped off.

Problem solved - change the rules so they couldn't claim!

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Litigation Lawyers Ditch Marketeering Clients

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Two marketeering law suits have been dismissed because of irregularities and want of prosecution. Solicitor TIM O’DWYER reports on how the plaintiffs’ lawyers warned other clients about the risks of litigation.

Prior to the dismissal on 10th March this year of two District Court actions on behalf of over-priced property marketeering victims, Brisbane litigation lawyers Carter Capner reviewed all their other real estate actions. Most claims related to losses on Gold Coast properties sold to out-of-town investors more than 5 years ago.

On 9th March Carter Capner partner Harry Dignan, who conducted the review, wrote to all clients whose claims had not been served on defendants. Dignan now sought instructions on serving those claims.

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Gold coast Solicitor Off The Hook On Old Marketeering Claim

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Vince Rickards, a former partner in defunct Gold Coast law firm Sciacca & Sciacca, has succeeded in the dismissal of an $80,000.00 District Court negligence and breach of contract action commenced against him. The Court ruled in Rickards’ favour because of a prejudicial irregularity and a want of prosecution.

This action was one of more than 800 initiated by Brisbane litigation lawyers Carter Capner over recent years on behalf of a legion of over-priced property marketeering victims against marketers, real estate agents, financiers, finance/mortgage brokers, solicitors and others.

The unfortunate plaintiffs, Mark and Louise Hansell, were ordered to pay Rickards’ costs although Judge McGill indicated that Rickards might apply for a costs order against Carter Capner.

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Is The Property Insurable? A Trap For The Unwary!

Consumers are often unaware that small issues can have huge implications. What happens if you buy a home, but you can't insure it?

We offer a comprehensive pre-purchase contract and disclosure statement checking service to our clients, and insurance issues are among the most common problems we discover. The following situation unfolded a few weeks ago, and serves as an example of the way a seemingly minor issue can have enormous consequences.


The client asked us to check his contract and Section 32 Vendor Statement before signing up to purchase a property. The client had checked the property carefully, had made arrangements for his finance, and was aware that some recent works had been performed on the house.

The Section 32 statement contained a building certificate from the local council, stating that permission had been granted for the floor of the new extension to be built below the established flood level. The client believed that because the likelihood of flooding was not great, and the council had actually granted the permission, everything would be OK. Not so!

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Dragon Ladies Of Property Management

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

An ABC radio presenter recently recounted during her programme her parents’ "nightmarish encounter" with a real estate rental manager.

Mum and Dad rented a house for some years, met the owner, were good tenants, painted a couple of rooms and "it’s all been sweet".

Then the manager left. The new woman advised the couple that the rent was going up $10.00 a week. They refused to accept this, but still signed a fresh lease after changing the rental figure back to the current one. They kept paying the old rate, and soon copped an arrears notice. Then the owner dropped in. "Just visiting." He knew nothing of the rent increase or the notice.


"It turns out" the presenter continued, "they’d been lied to." Both landlord and tenants had "been spun stories by this woman in the rentals department …playing both sides off each other".

I was invited by the presenter to comment on air. The first question was: Do rental managers have to represent both parties fairly?

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Mortgage Fraud

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

A while back I was interviewed on the Drive Programmes for Brisbane radio station 4BC and Canberra radio 2CC, as well as on ABC – TV news. The subject was mortgage fraud – where agents, finance/mortgage brokers, solicitors, buyers and sellers can be parties to criminally defrauding banks, building societies and other lenders.


I told how a crooked Queensland agent lost his licence for this, how another agent and his whole sales staff were jailed and how a fraudulent mortgage broker and her accomplices also copped jail sentences. One conveyancing solicitor involved with one of the agents soon joined his mates in jail.

The warnings are obvious for all in real estate. Particularly for any professional corruptly tempted by “an important source of work to his practice” - to quote the solicitor’s barrister who told the court this foolish lawyer apparently “couldn’t say no to an important client.”

Property buyers should be wary of sellers’ agents keen to help with their finance and conveyancing. Sellers should also ensure that their agents focus on selling their property rather than servicing buyers. See your own independent solicitor or conveyancer before you sign anything.

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Tricks & Traps Of Building & Pest Inspections

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Buyers and sellers alike are still being conned on building and pest inspection clauses in sales contracts. Meanwhile, the regulators do not seem to care about protecting consumers in this regard – especially when safety clauses are left out of contracts, or when dodgy ones are added.

Beware of building and pest inspection clauses limited to the house only – which means you accept the state of fences, retaining walls, garages, carports, swimming-pools etc. Particularly watch out for bogus building clauses cunningly restricted to “serious structural defects”. These clauses are worthless, and deceptively designed to bind you to a contract no matter how unsatisfactory your reports turn out. Why? Because building inspectors are not qualified or expected (under Australian Standard 4349.1 – 1995) to report on “structural defects” … serious or otherwise. Structural engineers, not building inspectors, determine issues of structure.

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Australian Coastal Property Market "On Steroids"

An EzineArticle by Steve Houlihan.

A newly-released report on the property market along the coastal areas of Australia shows that, despite a relatively subdued market nationally, the coastal strip is surging ahead.

The report was prepared for the Australian National Sea Change Taskforce, whose role is to provide national leadership in addressing the impact of the ‘sea change’ phenomenon and to provide support and guidance to coastal councils attempting to manage the impact of rapid growth.

The keys to this “sea change” are the baby-boomers – cashed up, footloose, and looking forward to a long retirement in desirable coastal locales. While older boomers are already retiring to the seaside, many of the younger ones are getting in early, buying their “little piece of paradise” now to ensure they aren’t priced out of the market when they retire over the next decade or so.

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Law Should Make Agents Respect Privacy

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Funny how Queensland’s Office of Fair Trading annually licenses estate agents to give them a monopoly on charging fees for selling property.


Yet, when grieving folk complained about agents’ following up on funeral notices, the Fair Trading Minister was "appalled”, and described the practice as “abhorrent”. Meanwhile another Beattie government minister had to direct the removal of a section of a TAFE Estate Agents’ training manual (supplied by the REIQ) detailing how to use Death Notices to secure sales listings.

On Channel 9’s A CURRENT AFFAIR, I described funeral notice trawling as “the pits, the very, very bottom of real estate practice.” Using Death Notices to tout for sales listings has been going on for years. But this is only the ugly tip of an offensive iceberg of unwelcome harassment of property owners through letters, phone calls and the like. It doesn’t matter whether the tactics are high-pressure or extremely subtle, none of us expects or tolerates these sorts of personal approaches from any other trade or profession licensed or regulated by government. Why are agents allowed to invade the privacy of property-owners?

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Pre-Inspected Listings - The Future of Real Estate

An EzineArticle by Jennifer Walker.

Home inspections have traditionally been for the benefit of the purchaser. Pre-inspected listings benefit all parties – purchasers, vendors and agents. The benefits:

Deals won’t fall through

Speeds up the selling process

Avoid renegotiation

Knowing what repairs prior to sale

Peace of mind for the purchaser

Deals Won’t Fall Through

Home inspections, performed as a condition of the offer, can kill deals. Sometimes this is because:

The purchaser gets cold feet

There’s a big problem no one knew about

If the home inspection is performed before the house is listed, all parties will be aware of the condition of the house before an offer is drawn.

Speed up the Process Home inspections, performed as a condition of the offer, can slow the momentum of the sales process. A vendor who pays for a home inspection is one step ahead. The whole process of selling the house is expedited.

Possible re-negotiations after the inspection. If all parties know the condition of the house prior to the offer, there is no basis for renegotiation.

Repairs Prior to Sale A pre-inspected listing allows the vendor to repair any conditions prior to putting the house on the market. Another option is to reflect the condition in the asking price, thus eliminating a negotiating point against you.

There may be discrepancy and the vendor may not agree with a part of the home inspector’s report. The Reliance inspector will be able to discuss and resolve it, before the house goes on the market.

Peace of Mind for the Purchaser There is no doubt that part of the value of a home inspection is a guided tour of the house for the prospective purchaser. The inspection company can return to do a walk-through with the purchaser, if requested.

When Mortgage Documents Need To Be Signed And Witnessed

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

"I want a witness," sang the Rolling Stones on their first album over 40 years ago.

It can still be tricky finding a witness when you need one. Justices of the Peace, Commissioners for Declarations and the like seem to vanish whenever they are needed in a hurry. This perennial problem was faced (and solved simply) a while back by a couple of ex-pats based in Singapore. After bank mortgage documents for an Australian property purchase went astray, a second set was despatched and arrived on a Friday. Trouble was the documents had to be executed (not a word one uses lightly in Singapore) in the presence of a qualified witness.

The most suitable qualified witness, the couple were advised, would be an Australian Consular officer, a Notary Public or an Australian lawyer. Easier said than done. So the ex-pats promptly did a deal with Singapore airlines, phoned family here to make after hours arrangements and duly turned up at my home on the Sunday morning with a doorstop of documents - and a large bunch of flowers for Mrs. O’Dwyer.

Because I was not only the family’s solicitor but also a Justice of the Peace and Notary Public, everything was soon signed, sealed and witnessed in all the right places. Mrs Ex-pat flew back to Singapore that afternoon while Mr Ex-pat stayed to make sure the documents were delivered safely back to the bank.

The Rolling Stones must have got some satisfaction too, because another song on their album was: "Now I’ve got a witness."

Flood Insurance 101

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

(From PropertyReview.com.au)

WHY is flood insurance not universally available to homeowners?

The reason, according to the Insurance Council of Australia (ICA), is that insurers believe that not enough has been done to reduce the risk of flood in many communities.

This telling comment came from an ICA brochure entitled Flood insurance: Are you covered? This and further information on flood insurance can be obtained from ICA's website: www.ica.com.au
I actually found a copy of the brochure on a rack in a School of Arts hall.

According to ICA, if your property is near a watercourse or is low-lying, it could be flooded in the future. To find out if your house was in a flood prone area, ICA advised to start with your local council. Many councils have historic records of flooding and some have used new technology to determine where floods are predicted to occur.

If councils can't help, ICA recommended homeowners ask their State Emergency Service, Local Water Authority, neighbours, local conveyancers, solicitors and, wait for it, insurers.

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When Your Agent Buys Rather Than Sells Your Property

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

It has always been the law across Australia that real estate agents must act fairly towards their clients and disclose all relevant matters to them. One of the most fundamental principles of this Common Law duty of “utmost good faith” is that an agent simply must not buy a client’s property.


More particularly, an agent must not directly or indirectly be involved or beneficially interested in the purchase of any client’s property listed with the agent for sale – unless a fair price is being paid and the agent obtains an informed consent in writing from the client before entering into the sales contract.

Naturally enough agents are not entitled to any commissions from sellers on such sales, which my fellow Consumer Advocate, Neil Jenman, labels as “insider trading”.

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Free Flight To Misery

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

(This article first ran in The Gold Coast Bulletin.)

Eight years ago Robert and Karen Leonforte flew from outback Western Australia for a quick visit to the Gold Coast. They arrived at 7:00 p.m. on Saturday, 16 May 1998. Next day they inspected half a dozen investment properties, then went to the Bundall offices of Lehns Solicitors where they signed up to buy a unit in Hansford Road Coombabah for $139,500.00.

The solicitor, waiting to unlock his office that Sunday afternoon was John Campbell MacCallum. He advised on the contract and happily agreed to look after this couple’s conveyancing.

Many years later the Queensland Law Society released a recent Solicitors Complaints Tribunal decision which found MacCallum guilty of unprofessional conduct when he acted for those trusting clients in what the Society described as "a property marketeering transaction."

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