by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
The new Contract of Sale of Real Estate prescribed by the Estate Agents (Contracts) Regulations 2008 was supposed to end the dodgy practice of estate agents withholding terms and conditions from purchasers, but it hasn’t. The document designed by the Real Estate Institute of Victoria (REIV) allows estate agents to trick purchasers into believing that they have received “the contract” when in fact they have not. The new standard Contract of Sale of Real Estate is not yet a week old, and already the good intentions of the new contract have been undermined by a dodgy estate agent.
The Contract Note Is Dead – Long Live the Contract Note
The Contract Note was supposed to have been banned, replaced by a new full contract which clearly states all of the general conditions of the sale. However, the Real Estate Institute of Victoria (REIV), through some clever redesigning and the use of large fonts, has effectively replaced it with something even more sinister.
The new Contract of Sale of Real Estate, prescribed by the Estate Agents (Contracts) Regulations 2008 for use by estate agents, has two parts. Form 1 contains the “Particulars of Sale”, and includes all of the variable information which is added by hand to the contract, such as names and addresses, property details and so-on. Form 2 contains the prescribed “General Conditions” of the contract. Together, the two forms constitute the new full Contract of Sale of Real Estate.
Everything would fine had it not been for the design adopted by the REIV, which allows an estate agent to present just the Form 1 to the purchaser as “the contract”. By printing the words “Contract of Sale of Real Estate” across the top of Form 1, and placing the REIV logo adjacent to it, the REIV has created something of a Contract Note look-alike document which can be used in the absence of the essential Form 2.
But to make matters worse, much worse, the mandatory “Cooling Off” warning” is eliminated from the Form 1 entirely. Thus, it is possible for the an estate agent to have a purchaser “signed up”, without the purchaser ever seeing either the “Cooling Off” warning or the General Conditions which determine the conduct of the transaction.
The dodgy estate agents who in the past have relied so heavily on the Contract Note to perpretrate their deceptions, must feel that they have struck the mother lode!