THE AUSTRALIAN REAL ESTATE BLOG
Continued from the main page of The Australian Real Estate Blog ...
Rush To Get Victorian Couple To Sign Up
 by Tim O’Dwyer
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au
Tony White (not his real name) made his desperate phone call to me from the Bass Strait oil rig where he was working. He had just read comments of mine in Business Review Weekly about Queensland’s property marketeers and their slick, unchecked practices.
He and his wife and their kids from rural Gippsland Victoria had been holidaying on the Gold Coast. After being “verbally apprehended” by a woman at a stand outside the Dolphin Newsagency, they accepted an invitation to a free breakfast seminar.
As soon as Tony and his wife discovered after breakfast that they could be “cash positive” investors, they were off inspecting blocks of land, seeing a builder’s representative and agreeing to sign up for a Gold Coast investment property deal.
After being treated to lunch , the Whites were “ushered up” to recommended solicitors, Appleyards of Surfers Paradise, where they “signed a raft of papers” and received a written declaration from their new solicitors that they were independent of the seller, the seller’s agent and everyone else involved in the purchase.
The documents Tony faxed me showed that he and his wife had contracted to buy a building block at Pimpama through real estate agencies, L J Hooker Land Marketing and Northern Sun Realty (trading as Princeton Asset Specialists), with a house to be built later by Martin Grange Homes. Finance was being organised through Premier Direct, Queensland State Home Loans and Tonto Home Loans with Starlink Promotions and Capital Growth Properties being paid out of the deal for “seminar promotions” and “sub-contract marketing”.
The building contract price was $155,935. The Whites’ worst fears were confirmed after I ran the house plans, specifications and extras past another client of mine who builds spec homes at Ormeau. This experienced builder estimated a fair price for the same construction would be $120,000 – almost $36,000 less than the price Tony and his wife had been offered, and which they had happily but foolishly accepted.
The rest of the story is also very familiar. Both contracts were eventually cancelled and the services of the solicitors and financiers terminated. This sweet trusting couple, who returned home from the Gold Coast with a “general feeling of unwell at which the speed of things had happened”, have now come to this conclusion: “We can truly say all involved were friendly and very helpful and cannot say a bad word about anyone other than to admit things happened very, very fast with not much time for breath. In hindsight it would have been a lot better if we could have taken home all information to assess and check with appropriate advisors –before continuing at our own pace.”
Full details of the White’s experience were supplied to the Office of Fair Trading, and a complaint sent to the Queensland Law Society about the role of their “independent” solicitors.
In their response to the Law Society these solicitors strongly disagreed that “there was a flurry of paperwork” at the initial interview, or that “the forms and associated costs were simply dismissed as paperwork to sign”. They denied that they had any “personal or commercial” relationship with the selling agent who had taken the Whites to them to handle the conveyancing. No solicitors, this law firm argued to the Law Society, could declare their independence as required by the Property Agents and Motor Dealers Act if they received referrals from real estate agents.
The Law Society was audaciously told that if Parliament intended this result, then the law needed to be changed to that effect. Sorry guys, that is exactly what the law is now, and it was brought in specifically to warn clients like yours that solicitors like you - recommended by estate agents – could not provide genuinely independent advice or representation.
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