by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
On 3 August, 2007 I published a posting titled “Richard Wood Solicitors – Gifts To Agents For Client Referrals“. On 13 August, 2007 a person identified only as “David” posted the first of a number of comments attacking me personally on the basis of my ethics. The attack would have been unremarkable, except for the fact that the estate agent failed initially to disclose certain facts about himself and the agency by which he is employed.
In one of his comments the estate agent identifies himself as David Stewart, and his email address indicates that he is employed by Barry Plant Real Estate. The estate agent also discloses that he knows Richard Wood, of Richard Wood Solicitors, well enough to comment on his professionalism.
On 21 August, 2007 I wrote the following letter to the Directors of each of the Barry Plant Real Estate agencies in the franchise’s Eastern Network, including Barry Plant’s own franchise at Doncaster:
On 13 August, 2007 a person identified only as “David” posted the first of a number of comments attacking me personally on the basis of my ethics and suggesting that my business operates in circumstances of conflicting interests.
When pressed on the issue of his anonymity, David stated,
“I am David Stewart, a real estate agent of 11 years, and someone who finds your continuous attacks on agents not only unfair but far less than ethical. My email is firstname.lastname@example.org. I have nothing to hide.”
David also stated,
“I find Richard Wood to be a professional who seems to do his job to the best of his ability but we do not share a financial relationship of any kind.”
Having established that David is a Barry Plant agent, and that he knows Richard Wood well enough to make such a comment about him, I asked him,
“Hey David, a search for “David Stewart” at Barry Plant Real Estate reveals that you are working from one of the Maroondah offices, local to Richard Wood Solicitors. What do you know about gifts for referrals between your office and Richard Wood Solicitors? Are you in on it?”
To which David replied,
“No one in my office receives any type of referral or commission from solicitors or conveyancers. As to what happened 10 years ago, I am in no position to comment.”
David’s comment was quite precise, but it leaves open a number of possibilities, and I seek your assistance in exploring them.
David confirms that no-one at his office receives any commissions from solicitors or conveyancers. I do not know which office David operates from.
Can you confirm that no person at your office currently receives any form of commission from any solicitor or conveyancer in return for conveyancing referrals?
David’s comment relates to the present, but he does not deny that commissions have been received in the past. In David’s words,
“As to what happened 10 years ago, I am in no position to comment.”
Are you prepared to confirm that no estate agent operating from your office has ever received any form of commission or payment from solicitors or conveyancers in return for conveyancing referrals.
Alternatively, please advise as to whether your agents participate in such arrangements or if they no longer do so, when they ceased and why they ceased.
- David also states,
“I don’t believe in these types of payments.”
David appears to believe that making and/or receiving of such payments is wrong.
Do you believe that such payments are wrong?
It is my intention to write a follow-up posting on this issue, and I will include the above material, together with your response.
My purpose is to investigate the use of commissions by lawyers and conveyancers to secure conveyancing clients, and the effect that this has on the integrity of the real estate industry. My reason for writing to you is that David’s comments, the address on the Richard Wood Solicitors letter, and the fact that David has identified himself as a Barry Plant estate agent make this an obvious avenue of enquiry.”
Not a single Director responded to my letter.
While I acknowledge that there was no obligation whatsoever on Barry Plant or any of his agency Directors to respond to my letter, and that no adverse inference can be drawn from this, I believe that the fact that the Richard Wood Solicitors letter I have in my possession was addressed to a Barry Plant Real Estate agency, combined with the comments made by a Barry Plant Real Estate agent, indicate that although the letter itself was written in 1998, the issues and implications flowing from it remain both current and relevant.
It is important to note that even if every real estate agency in Victoria were to refer clients to Richard Wood Solicitors in return for movie tickets, 5 star hotel accommodation etc., it would not mean that either party would be breaking the law. Such activity only becomes illegal if it involves secret commissions (i.e. if the client being referred is unaware that gifts are changing hands as payment for the referral).
In my next posting I will further examine the concept of secret commissions as it may apply client referrals.