by Tim O’Dwyer M.A., LL.B
Real estate agents are rarely prosecuted or sued. Sure, we regularly hear about misbehaviour in the real estate industry and occasionally a real estate agent appears in court, but this is a rarity compared to the level of misbehaviour and misconduct encountered by consumers on a day to day basis. The reason for the low rate of court actions against real estate agents is the reluctance of consumers or their representatives. Consumers cannot match the dollars real estate agents are able to invest in court action, and those who represent consumers in real estate matters usually rely on referrals from real estate agents and are unwilling to bite the hand that feeds. Occasionally, however, a real estate agent is brought before the court. In this posting Tim O’Dwyer examines three examples of estate agents successfully sued.
TALE ONE (FROM NEW ZEALAND):
Consumer advocate Neil Jenman says treacherous “bird-dog” real estate agents, who locate deals for investors and speculators while still charging their sellers commission, should be busted “big time” – as ultimately happened to the agent in this first tale.
Warren and Rose West’s New Zealand home had been on the market for some time, but they received only one low offer despite reducing their price. Then they became motivated, if not desperate, sellers when they contracted to buy another home subject to selling their own. Their “window of opportunity for an advantageous sale” (as one judge subsequently put it) was limited, if they were to proceed with that purchase. So they quickly sold for $2.75 million, even though they felt their home was worth about $3 million.
Wests had discovered, to their dismay, that within six months their buyer, Dave Dagg, on-sold through KiwiRealty to an overseas buyer for $3.555million. Admittedly Dagg made some improvements, conducted an aggressive international sales campaign in a rising market, but Wests felt betrayed.
They then sued KiwiRealty after dismally discovering further that its saleslady Jenny Spink had not revealed while handling their sale, that she knew Dagg often purchased properties to resell at a profit. Nor did she disclose KiwiRealty’s ongoing “bird-dog” relationship with Dagg and, in particular, its involvement in several of his previous wheeler-dealing purchases and resales.
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