Shane Lowe of Methven Real Estate – Switching of Contracts and Conditions

Posted on January 15, 2008 by | 4 Comments


Peter Mericka B.A., LL.Bby Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

 


Shane Lowe is the Director of Methvens Professionals Real Estate in Mooroolbark, Victoria.  A case of “contract switching” resulted in some startling revalations from Mr. Lowe.  It seems that Mr. Lowe and the great P.T. Barnum have much in common when it comes to business ethics.P.T. Barnum - "Never give a sucker an even break and never wise up a chump!"


Shane Lowe of Methven Professionals Real Estate MooroolbarkP.T. Barnum is credited with the saying, “Never give a sucker an even break and never wise up a chump”.  This advice is regularly observed in the real estate industry where estate agents take every opportunity to limit the chances of a purchaser backing out of a sale.


Lawyers often experience difficutly in properly representing their clients in real estate sales because of commission-driven estate agents who fear that a purchaser may not proceed with a purchase.  In order to limit the chances of a purchaser backing out, some estate agents go to extraordinary lengths.  The now famous Ian Reid Gazumping Clause and the Ian Reid Finance Condition are two examples.


Some estate agents will go even further, using what is known as the “contract switch”. This is where the sale contract prepared by the vendor’s lawyer is provided to the estate agent, but the estate agent switches it, replacing it with one that is more to the estate agent’s liking. The vendor’s lawyer is not told of the switch, and only discovers it after the sale has been effected by the estate agent.


For some estate agents “switching” the contract is not enough to cut off the purchaser’s options, and so special conditions, designed to limit the purchaser’s opportunity to withdraw from the sale are inserted into the contract.


Our law firm was engaged to represent the vendor in a real estate sale transaction in which Methven Real Estate Professionals Mooroolbark was appointed as estate agent. In this particular case the Methven agent not only “switched” the contract without our knowledge, but also switched the building inspection condition we had drafted for one which severely limited the purchaser’s right to withdraw from the sale. 


Because this type of behaviour could constitute a criminal offence in certain circumstances, I wanted an explanation for the Methven agent’s conduct. Mr. Lowe’s explanation, provided in a letter signed personally by Mr. Lowe, was most revealing.


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4 Comments

  • http:// says:

    Meanwhile here in the Deep North similar skulduggery goes (similarly) unchecked:

    See “Tricks & Traps Of Building & Pest Inspections” https://www.reic.com.au/blogs/australian_real_estate_blog/archive/2007/05/02/tricks-traps-of-building-pest-inspections.aspx

  • Hi Austin,

    Thanks for the feedback. Unfortunately I can only have the comments section within this website. The full articles sit on my conveyancing website, because I use them as news references and examples in the information pages of that site.

    Thanks for the encouragement, although I think PCL-R will now start analysing you too!

    Hi PCL-R,

    I don’t think for one moment that you are a
    “scientist”. I would expect that a genuine scientist would be spending his/her time researching ways to address global warming rather than wasting time (his/hers and their employer’s) trawling real estate blogs.

    For all your supposed reading and research over the past months the only real conclusion you’ve reached is that I am something of a nasty pastie. Well done. But can you come up with anything more interesting for your fellow contributors?

  • Austin says:

    Hi Peter,

    Thats okay. But it would be good to be able to read the whole article from this page, that way the entirety of the article as well as the comments could be seen on the one page. Again, just a personal preference.

    And I wouldn’t worry too much about PCLR. He’s probably a real estate agent. Only real estate agents have that much spare time 🙂

  • http:// says:

    Another example of how the real estate agent “The Professionals” claim to be “professional”. We experienced total incompetent and negligent behaviour from “the Professionals” real estate Rockhampton in regards to the management of our investment property.

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