by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
Continuing our theme on estate agents and their control over the contract stage of the sale transaction, the following is an extreme example of the way estate agents are empwered by their access to the contract, and how some will use that power to the detriment of all parties involved.
David Falk is a real estate agent in Victoria’s west. David Falk knows the power an estate agent has when he is able to control the sale contract. This was demonstrated when, in a fit of anger, he blurted out the following statement:
“Listen, your client had better get another solicitor, or I’ll be selling this property to someone else.”
In this posting I will examine this particular incident in detail, setting out all of the facts, and looking at the way the purchaser, the vendor and the lawyers engaged by each, were affected by Falk’s control the contract stage of this real estate sale.
An Offer To Purchase
My client was interested in a property listed with David Falk. The lawyers acting for the vendor had prepared a Contract of Sale and delivered it to David Falk.
It should be borne in mind at this point that the vendor had engaged his own lawyer for the purpose of preparing the sale documents, being the Section 32 Vendors Statement and the Contract of Sale. According to the lawyer, the Contract of Sale had been prepared with a set of “vendor warranties”, required by law in this case because the vendor was an owner-builder.
It would appear that David Falk, acting on his understanding of the law, decided that his simple REIV Contract Note was better than the contract prepared by his client’s lawyer, and took it upon himself to substitute the correct contract with his Contract Note.
Let’s pause here for a moment. On what basis did Falk, a non-lawyer, conclude that he had the right to abandon a full contract prepared specifically for this transaction, and substitute it for his own single page Contract Note?
Did Falk discuss this with the lawyer who prepared the proper contract? Apparently not; she would have told him not to tamper with the legal documents. In fact, when I spoke to the vendor’s lawyer she was shocked and annoyed to discover that Falk had switched documents!