Deposit Refund for Property Purchase

I hope people could shed some light on my case and provide some guidance on best course of action.

I inspected a property which required few repairs and it was agreed with the agent that these repairs will be completed before settlement. Other conditions were also agreed such as 5% deposit after cooling off. All conditions were agreed before I paid deposit and signed the contract.
I sent them deposit payment receipt(internet banking transfer) and got them to confirm all points which they did in writing. When my conveyancer reached out to the vendor to get acknowledgment on these points, they are refusing to agree on all points and stating that the agent was not authorised to do any commitment. This implies I was provided misleading information as I only agreed to sign the contract after agent’s confirmation.
I have already organised Strata and Building inspection report which was additional cost. The vendor is saying they are not legally obliged to refund my deposit of 0.25%.

What are my options here?

Update 03/07/2019

After I sent an email to Principal of agency, they contacted me and full refund has been made. Thank you everyone for your valueable advice. Can't think of better outcome but yes I learnt my lesson.

Comments

  • +3 votes

    What does your conveyancer say?

    Good luck to them. I suggest saying ok. Your new offer is $30k less. They will struggle to sell for a higher price than you agreed.

    • +9 votes

      Converyancer is saying I can't legally get deposit from the vendor as I have signed the contract. If the agent has said something misleading, I need to take them to Fair Trading.

      Sorry I don't understand how making new $30k lower offer will help recover my loss?

      • +1 vote

        Other conditions were also agreed such as 5% deposit after cooling off. All conditions were agreed before I paid deposit and signed the contract.

        Were the repairs in the contract?

        I sent them deposit payment receipt(internet banking transfer) and got them to confirm all points which they did in writing.

        Who is them? The agent?

        What does the agent say, as you have written evidence from them. And they are acting on the vendors behalf?

        •  

          Conveyancer has shared vendor's solicitor response and the agent is cc'd in this email. The email says the agent doesn't have any authority to make these commitments but too late as I made my decision to purchase due to these commitments and paid deposit.

          Yes the agent confirmed conditions in writing.

          • +10 votes

            @Tipu:

            Yes the agent confirmed conditions in writing.

            But was it in the CONTRACT you signed?

            • +1 vote

              @MrBear:

              But was it in the CONTRACT you signed?

              It’s as simple as this. If it was only a conversation and not in contract, you have no proof and the contract is the legal binding.

              Based on the conveyancer’s response, it sounds like it’s not in there.

              We had a similar experience but our contract was amended after building inspection and we had a walk through to inspect the repairs

              • -3 votes

                @sghetti: OK.

                IF the Vendor has not signed the contract, there is no contract. And as such you are entitled to deposit - if you want the $ back you can sue for 0.25%.

                Otherwise the Vendor did sign the contract and agreed to your conditions.

                OR you DID sign and your an idiot,

                As you keep saying 'conveyancer' I assume you used a conveyancer and not a lawyer and as such they cannot help you in this situation.

                But hay you might of gotten the conveyancing for cheaper. Lucky you.

                •  

                  @IHatePeople: That’s a completely different situation. In my experiences, the vendors have already signed the contracts that the agent presents. We had amendments, the agent went back to the vendor and we went back and forth over a few items of repair and came to a middle ground. The agent got them to sign for the new conditions and then came back to us with the copies for us to sign.

                  End of the day, if the contract they signed had the fixes mentioned, in the scenario the vendor doesn’t agree to them and doesn’t sign them, then yes, there’s clearly no contract and legal binding.

                  In normal circumstances, you pay a deposit once the contracts are signed by both parties. So without any more details from OP, sounds like both parties signed the contracts and the fixes mentioned were not in there. The process of adding these conditions to our contract was very formal, itemised with us initialing each of the items for repair for acknowledgement.

                  Possible the agent has done the shifty on these guys, and it’s crap if they have (I wouldn’t be surprised, they’re working on the vendors interests). But you don’t sign contracts without ensuring everything is covered, especially if there are repair works or other conditions on settlement.

          •  

            @Tipu: Hey - got similar situation. Bought a house, Agent promise to do a , b, c, written on the email. BUT it is not enforceable. If it is NOT on contract, then there is NO obligation. Learning the hard way too.

            •  

              @D A Y: Yes I also learned hard way but there is still a hope. The vendor has shared email where they challenged agent's authority and the agent response to this email clearly indicates misrepresentation. Let's see how NCAT looks at this evidence and other email confirmation s.

            •  

              @D A Y: Yes it's not enforceable but you can take case against counsumer protection and realestate agent will fix for you as far you have evidence in written.

      •  

        When you signed contract was all written in contract of sales what you mentioned above? If it was oral agreement then good luck to you.
        Mskeggs wanted say to get deposit back you need show breach of contract if there is no conditions written in contract then there is no breach so you legally liable finish contract.
        Only you can do bargain price with agent and vendor if they not agree with then you need prove that oral agreement was done with witness who was there at sign of contract and they need to come court if legal action will be taken.
        Good luck

        •  

          Agree.
          Even if the agent put it in writing OPshould have checked that it had been written into the contract as well.

  • +18 votes

    Bikies

  • +7 votes

    All conditions were agreed

    Were the conditions added to the contract?

    • +1 vote

      This is where my conveyancer sent these conditions to the vendor to incorporate the into a contract however they have bluntly refused to agree on any point.

      I understand the agent is representing vendor so why would agent confirm in writing if they didn't have authority?

      • +25 votes

        why would agent confirm in writing if they didn't have authority?

        because they'll do anything to get a sale.

        •  

          Agent is rep for vendor so what vendor says means agent says and what agent says vendor have to follow. if oral says then consider he desperate to sale. if written then agent is liable to do,if vendor not follow up.

          •  

            @Zonty: My knowledge is based on the purchase of 5 houses; sale of 3; rental of 2 over a 40 year period. So many lies come out of an RE's mouth no matter how genuine the seem.

            I know what an RE is supposed to do but it rarely happens.

      • +31 votes

        So you signed the contract even though the terms you wanted added to that contract weren't in it?

  • +4 votes

    not an expert for this, but just wondering were they written in the contract as "condition" of purchase?

  • +14 votes

    Why did you pay a deposit before getting the contract agreed to, the vendors agent agreeing to the terms, ie the real estate agent, is not the same as the vendor agreeing to them, looks like you jumped the gun. They are right, you have recourse vs the vendors agent not the vendors themselves.

    • +2 votes

      Sorry I could be wrong but I thought my conveyancer will only reach out to vendor when the contract has been exchanged. The agent has been hired by the vendor and representing vendor so don't they have responsibility to endure they don't agree with anything without checking with the vendor?

      It's not like these repairs were suprises for them as the agent was already aware so when you get consent from the to get them repaired, you will not question if they agree.

      • +11 votes

        If you want something to be done as part of the sale, then you should include it as part of the contract of sale. Especially if the issues were known during the inspection. If something was vastly different from when the property was inspected, you'd have a chance.

        eg the house has no glass in the windows when it comes time to settlement, then you would be able to make the vendor fix the glass if the glass was there when you inspected it. If there was never any glass there in the first place, you can't force the vendor to supply the glass if you didn't have something written into the contract

        •  

          Thanks for the input. This is something new for me that you must get vendor to agree on conditions before signing the contract. I thought if the agent is saying Yes then it would suffice. You just get solicitor to incorporate it into contract later.

          I learned a lesson. That's said, do I have a case against the agent for providing misleading information or I will be wasting time in Fair trading complaint?

          • +11 votes

            @Tipu: I think you would have a case against the agent, but would try to negotiate them with them to reach a satisfactory outcome before you go external (Fair Trading, etc).

            To be honest, I’d also be asking your conveyancer the question as to why they didn’t tell you to have these things included in the contract before you signed it. You’re paying them for a service after all.

            That said, I’m no expert on the difference between a solicitor and a conveyancer. I’ve always used a solicitor, so that kind of extra service might be what you pay them for.

          •  

            @Tipu: Your contract is not with the agent but the vendor. The agent acts on their behalf but doesn't have authority. Contract law 101

          • +1 vote

            @Tipu: The issue is not so much who agreed it. It is NEVER sign unless what you have agreed on in written on the paper you are signing. The contract is the legal record of what you have agreed to, if it isn't there then you have potential problems.

          •  

            @Tipu: Is all conditions in written then simply ask agent to negotiate price before I go fair trade. He can fix for you by reducing commission with vendor. He might loose licence here if he will not act.
            So agent should scare more then you.

  •  

    Have you exchanged contracts then? I would have thought you'd have all of the conditions included in the contract prior to exchanging. I would have thought a conveyancer would have advised this? Or have I just been lucky by having a solicitor/conveyancer in the past that actually does their job.

    The fact is, if you've exchanged contracts, and you're trying to get something else added to the sale (Regardless of whether it was agreed to prior) it's really up to the vendor as to whether to allow you to add it in now.

    I still think you'd have some recourse with the agent given that you have an agreement in writing from them, but as far as your deposit goes I think you're only option is to pay the 0.25% (Assuming you're still within the cooling off period).

    It also sounds a bit odd that you've agreed to pay the 5% deposit after the cooling off period. Every property transaction I've done has required the deposit to be paid at the time of exchange - but again, maybe that's just the way it is usually done.

  • -3 votes

    I met a person the other day (Real Estate Agent) they were acting a little High and Mighty. I commented that i too am a licenced real estate agent, but never got a job in the trade as i consider them level with car salesman as the lowest of the low. The jaw dropped, i said YES that is what the world thinks of you.

    THEY ARE SCUM, Take them too the cleaners.

  •  
    1. Do you still want the property? If so, can you meet them half way?

    2. If not, you will need to forfeit the 0.25% to the vendor BUT I do think you have a case with fair trading regarding the agents actions, especially since you have them confirming in writing.

    •  

      No I don't want property in its current condition. Therefore the repairs were agreed.

      • +1 vote

        but you signed a contract to buy in its current condition.

        time to man-up and pay the money. you have no option.

      •  

        Obviously there is debate on whether or not these were "agreed". I've got to say that I agree with others that if it's not in the contract, it's not in the contract. You need to understand that you MAY need to eat the 0.25% if you walk away.

  • +7 votes

    Get a lawyer, this is a complex situation and the other side has already got one.

    • +1 vote

      But OzB is so much better at this kind of stuff!

      Actually why hasn't he already talked to a lawyer?….

  • -3 votes

    Get the repairs done after settlement & send the bill to the real estate agent and pursue civil action if need be

    • +12 votes

      Would be zero chance to get any repair money out of agent.

      • +1 vote

        i disagree .. talk to a lawyer

        •  

          And a lawyer will tell OP to do what I wrote above.

          As it was not written into the contract of sale and seems OP never insisted it be written into the contract before signing, this is a civil claim between the agent & OP.

  • +12 votes

    Put everything you want in contract, sign contract, pay deposit. Is it really that hard to figure these things out?

  • +1 vote

    why have u paid a 5% deposit before a contract was looked over by your conveyancer. Legally is .25% until the cooling off period & by then everybody should have a final copy of the contract

    •  

      I paid 0.25%.

      5% was a condition to pay after cooling off but the vendor is asking to pay 10% instead.

      • +2 votes

        you must have a hard time reading your contract.
        what does your contract say?
        if you can't read, then talk to a lawyer.

  • +4 votes

    Hang on a minute, has the vendor signed the contract? If your conditions are in the contract and the vendor is not agreeing to the conditions and therefore has not signed the contract, then there is no sale, so you should get your deposit back. But I am confused why you have your conveyancer involved already? Usually this happens after the contract is signed by both parties. And then you organise for building reports, etc.

    Usually the agent make you sign on the contract with your offer + conditions, then the vendor counteroffers, and this goes back and forth a few times till you have an agreement on price and conditions with both parties signatures on the contract. The agent then collects your deposit and you pass your contract to your conveyancer and organise for finance and building reports.

    •  

      It appears I probably I didn't explain properly.

      1) I inspected property and identified few issues which required repair. The agent confirmed verbally that they would be fixed before settlement. I also had few other conditions and the agent agreed to all of them.

      2) We negotiated price during few follow up calls where the agent confirmed that he was ok to sell at my latest offer and invited to sign the contract. I was under the impression that the agent would have consulted my conditions with the vendor along with offers before saying Yes. We met in the evening and signed the contract.

      3) When I sent email to the agent on the same day for my deposit receipt via internet banking, I also included detailed summary of conditions we agreed. It was clearly mentioned in the email that these conditions were agreed before I paid deposit and signed the contract. The agent responded and said Yes to these conditions in writing. Why they would say Yes in absence of any authority and without consulting with the vendor? Thanks to you guys due to which I now know any condition must be included in the contract before I sign it. I learned my lesson.

      4) The signed contract from both parties was sent to my conveyancer who then reached out to the vendor's solicitor to incorporate all conditions I agreed with the agent. The vendor refused to accept them stating the agent had no authority to agree on these conditions.

      Trust this helps.

      •  

        This sounds a bit backwards. When you refer to the contract, is it the proper contract of sale - or is it something the real estate agent gave you?

        Ordinarily in NSW, they would give you a copy of the contract for you to read through - however once you agree on a price, and want to proceed, the agent should send sales instructions to the vendor's solicitor who would then draw up the contract of sale and send it through to your solicitor for you to go in and sign.

        I'd say that you need to get this cleared up with your conveyancer, however it sounds a bit weird given what they've told you what your options are. I've never heard of a property sale going through with a purchaser having to read through (and sign) the contract without it having gone through their solicitor first.

        •  

          The vendor is probably right - the agent doesn't have the authority to agree to all these things.
          But 100% - if it's not in the contract, it isn't happening.
          Agents are up there with used car salesmen so never trust them.
          Poor effort on your conveyancer though - did you even get them to read over your contract of sale?

          • +1 vote

            @lockmc: Seems like he signed it before they could review it?

            Conveyancer certainly Not a lawyer and sounds like an idiot. Perhaps english not as first language?

      •  

        Looks like you have bought a house without repairs being completed.

        how much are repairs worth?

  • +1 vote

    You seem to be dodging a simple question: Were the repairs stated in the contract that was signed by the vendor?

  • +7 votes

    I would be arguing (ie. requesting your conveyancer argue) that the vendor's agent clearly agreed to x, y and z being terms of the contract, as evidenced by emails of X dates, and that they are essential conditions of your agreement to purchase the property. Yes it would have been prudent to have these conditions written in the contract before you signed it, but not much you can do about that now.

    If the vendor believes his agent exceeded his authority, it is a matter between them and them only. I find it very difficult to believe the agent simply agreed to those conditions (and confirmed it in an email) without consulting the vendor, particularly when something like the repairs would involve the vendor spending money. Seems more likely the vendor has just changed their mind or has been talked out of it, and is trying their luck to avoid it because it wasn't written in the contract.

    Fair Trading/ACL may be a last resort to try and get the agent to pay for it later on, but I would push harder to have it resolved now.

    •  

      This ^
      Just refer to those written emails exchanged between yourself and vendor's agent. I would think thats a good proof, especially when you received a written'yes'.

      Hope you get this resolved asap. All the best.

  • +1 vote

    If the conditions weren't agreed to in writing by the seller or their solicitor they would be non binding. Selling Agent has no authority to agree to conditions on sellers behalf and I doubt there's much you can do about it.
    Your conveyancer/solicitor should have known this and should've made sure you/they followed correct procedure. Negligence on the buyer/buyers conveyancers part. Bit like blind leading the blind.

  •  

    Pretty sure all contracts say something like anything implied or even agreed that is not part of the contract is null and void and does not constitute any part of the agreement… Everything you want should have been added

  • +22 votes

    1) Forget talking to the agent. Speak directly to the agents principal armed with your emails and that the Agency has misled you by a rouge agent.
    If you don't get a result there inform the Agency you will be going to see the REA body of the the State you live in to have the agents licence revoked.
    Remember none of the above are working for you, but they are bound by an ethical code of conduct.

    2) Go spend $500 with a solicitor - it may be the best $500 you spend this year.

    3) And in future - make sure all verbal agreements are put into writing - ie put in the contract.

    • +1 vote

      This.

    • +1 vote

      Good idea - I will send an email to Principal summarizing all that has transpired.

      • +1 vote

        no, this is not a good plan.

        go and spend $500 with lawyer.

      •  

        If it's a franchise, also contact their head office with your complaint - they may be more receptive than the agency's principal, as they have less on the line in dollar terms, and more on the line in brand terms.

    • +2 votes

      I agree - Pretty sure the agent is liable for this one rather than the vendor - as the agent has misrepresented the vendor, I would be speaking to fair trading - also the use of a solicitor at the start rather than a conveyancer can make the difference for this kind of dispute in property transactions.

      •  

        I did lodge a complaint with Fair Trading who came back saying I will need to take them to NCAT to get my money. They can't assist here.

        That's said, they are looking into my complaint to see if any action they need to take against this agent from Compliance perspective. However, they stated it's between Fair Trading and Agent and they won't share details of outcome with me.

        • +1 vote

          Fair Trading ain't going to do sh*t for you.

          Follow the advise:

          2) Go spend $500 with a solicitor - it may be the best $500 you spend this year.

          Or 100% lose the 0.25%

          If I was the RE Agent I would blame your crap conveyancer, so have fun disproving that at NCAT.

          •  

            @IHatePeople: Agent can't hide his deceptive conduct by blaming others. Thanks God you are not agent :)

          •  

            @IHatePeople: 0.25% of $500,000 is $1,250

            This is literally what NCAT is made for. OP shouldn't need a lawyer. They need printed emails sent by the agent, their contract and anything else it asks for.

    • +1 vote

      OP is in NSW.

      Letter/Email of demand to the agent's principal, stating

      That their agent acted without the authorisation of their client,
      That OP is happy to lodge a complaint about their rogue agent with REA NSW; and
      That if OP is not refunded their next step is getting legal advice.

      If agency is a franchise, the actual next step would be contacting head office with the same letter, addressed to the director of the business group.

      0.25% could be any where from $1250 to $2500. The agency should spend around this in advertising to make this sale. This is far less than the advertising spend needed to counter OP's bad experience if made public.

      If this fails, OP should try NCAT first before spending another $500 on a lawyer.

      Contacting REA NSW should be the last option, as it will stall negotiations as OP will be getting a third party involved.

    •  

      Your advice was legendary. I have received full refund after escalating it to the Principal.

  •  

    Which state are you in as this may impact on my advice.
    I’m based in QLD so speaking from experience here.
    Assuming there is a finance clause - How friendly are you with your lender? Have a discussion with them and if they’re sympathetic they may provide a letter stating you’ve been declined finance for the purchase. Agent can’t question this and Bank won’t provide info to Agent due to privacy.
    You have to get past Cooling Off period but you won’t lose the 0.25%

    • +1 vote

      You don't need a letter from the bank to terminate under tha finance clause, you simply say you were not happy with the rate.

      •  

        If this is true it sounds like a silver bullet for op i this situation

        •  

          Actually probably not - The Courts will look at the evidence and if Op is emailing about repairs, Courts aint silly - they will assume it's the repairs.

      •  

        Depends how its written in the contract. Srs!

        •  

          Subject to finance is exactly what it is, subject to the buyer obtaining satisfactory finance (to the buyer). Most contracts come with 2 weeks subject to finance and the buyer can cancel the contract within this time no questions asked. Thats why sellers don't like it when it is more than 2 weeks. OP here may have exceeded his time or may have not had that condition, who knows.

  • +8 votes

    Update

    The vendor has shared their exchange with the agent where the agent stated he made executive decision on vendor's behalf to get sale done. The vendor further advised my conveyancer's letter was the first time they came to know about my conditions as the agent never told them about it.

    They are still refusing to accept any condition and therefore I have rescinded the contract. I will pursue agent to get reimbursement on my financial loss.

    Thanks everyone for your useful advice!

    •  

      I hope you have this in writing so you can chase down the agent much more easily!

      • +12 votes

        Yes I have got copy of vendor's email exchange with the agent where the vendor questioned them re who authorised you to agree on conditions. The agent replied I made executive decision on your behalf to get sale done otherwise we would have lost this buyer.

        The irony is the property is back on market from the same agent. Not sure how the vendor is still comfortable with this agent.

        • +2 votes

          The vendor likely signed an exclusive agency agreement with the agent, which means they still have to pay them if they take it off the market, or sell it with another agent before their agreement expires.

          Either way, sounds like you've been able to get out of it without too much drama, and hopefully will get your money back from the agent. Good luck with the house hunting!

        •  

          Well that is some good news.

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