Deposit Refund for Property Purchase

Ash-Say on 26/06/2019 - 16:31
Last edited 03/07/2019 - 17:07

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.

Home & Garden

Comments

    • This Guy on 29/06/2019 - 14:24

      It is unreasonable to ask for reimbursement for strata and building inspection reports.

      For these to be of value to you, they should be done by you prior to making an offer.

      • Ash-Say on 29/06/2019 - 14:51

        I haven't heard people doing it before signing the contract unless it's an auction.

        I had also had condition in my offer that this is subject to satisfactory building inspection but yes only the agent agreed to it.

        • This Guy on 29/06/2019 - 23:46

          I am not in real estate, but I have signed a lot of contracts. Subject to inspection is something a seller or an agent should not ordinarily accept in a contract.

          A sale is not a sale if there is doubt in the buyers mind about the quality of the goods (or in this case property). The buyer will always try to rescind the sale.

          It sounds like this agent is very bad at their job.

          • FrugalDealHunter on 30/06/2019 - 09:14
            +2

            @This Guy: it's quite common for buyers offers to be subject to finance and building inspections unless it's an auction. Once the vendor accepts the offer, the buyer can do their due diligence before the contract becomes unconditional.

            • This Guy on 30/06/2019 - 12:07

              @FrugalDealHunter: Wow. They probably wouldn't be having a 'market correction' if they could close their sales properly.

        • pandas on 30/06/2019 - 16:28

          I had a building inspection and strata report completed before potentially signing the contract of our first home. Best money ever spent, plus I'm very thankful that my first job was at a law firm and I knew my solicitor.

          I was in a very similar situation where repairs needed to be done and after going through a bit of back and forth with the real estate agent, he snapped it and told me how he didn't give a rats ass and all he cared for was the deposit.

          My conveyancer also reviewed the strata report and were able to pinpoint a number of negatives and potential defects with the building, advising that she wouldn't personally go ahead with the deal.

          At the end of the day, I moved on and am glad I didn't get burnt.

  • HeWhoKnows on 28/06/2019 - 08:08

    The agent is just "the messenger".
    OP should have talked to his conveyancer first and got everything in writing from the vendor before signing.
    This is the procedure even before going to an auction.

    Probably cheaper to fix it yourself OP rather than lose the deposit. Meanwhile you could take the agent to court for "damages".

    • Ash-Say on 28/06/2019 - 08:27
      +6

      I learned my lesson for not having it available in a contract before signing it. But at the same time I will argue that the agent being holder of real estate licence has to abide by ethical code and can't mislead buyer.

      I have written email from this agent were he claimed the vendor has given him full authority to sell property at agent's discretion. He is agreeing to the conditions in writing so one would have thought that this agent had completed detailed discussion with the vendor before making such claims in writing.

      I read Google reviews this morning and couple of other buyers have left reviews recently stating this agent is con artist and deceptive so I am not alone. I know it's too late to read these review but I hope they make a supporting argument in NCAT.

      • nedski on 28/06/2019 - 09:10
        +4

        What has happened here is that a "Collateral contract" was formed when representations were made to you about the repairs. Essentially a contract to get you to sign another contract.

        Typically while the actions of the agent can bind the people they acting on behalf of, you do have to assess whether they have the authority to make such representations and whether you can rely on them.

        In this case, it would be reasonable for you to rely on the representations made by a real estate agent in regards to additional conditions being made part of the contract. However, if you review the contract before signing and it says that the contract contains all the conditions and no representations made outside the contract can be relied upon, well then you are in a little bit of difficulty.

        However, I would argue that you have a good case to argue against the Real Estate Agent.

        Good luck!

        • Ash-Say on 28/06/2019 - 14:33

          Thanks, waiting for the agent Principal to revert before escalating it to NCAT.

          Would it general consumer claim application in NCAT? I am unable to find a category matching my issue.

          • nedski on 28/06/2019 - 15:32

            @Ash-Say: Well it could be interpreted as a minor contractual claim. It is also arguable that it may fall under Consumer Protection as it was a false and misleading representation. Try both and go from there.

        • ihbh on 28/06/2019 - 19:44

          Not really related to this but reminds me of the notorious side letters used in the insurance industry about two decades ago to bring forward profits.

  • kolorijo on 28/06/2019 - 10:08
    +4

    Wow, I just learned another lesson here. Good luck OP with chasing up the rogue REA. Hope everything works out for you.

    • Ash-Say on 28/06/2019 - 14:31

      I myself learned a big lesson but hard way :)

  • antonthenet on 28/06/2019 - 10:43
    +2

    Just want to say that reading this post and reading the one about the guy who was pipped in an auction has been really worthwhile.

    A good way to learn is through experience, even better is to learn through someone else's experience.

  • Herbse on 28/06/2019 - 10:58

    Is there no cooling off period in the contract?

  • chillwok on 28/06/2019 - 11:02

    I thought the deposit for houses goes into the agents trust account. how can the vendor have access to deny you a refund…

    • lgacb08 on 28/06/2019 - 19:52

      Normally it goes to trust account and passed on straight to vendor, agents, solicitors and the bank will get their shares only after the final larger settlement comes.

  • idonotknowwhy on 28/06/2019 - 12:03

    Can you use the 30 day cooling off period to get out of the contract?

    • Ash-Say on 28/06/2019 - 12:03
      +1

      30 days cooling off? It's not insurance product :)

      • idonotknowwhy on 28/06/2019 - 14:13

        Ah, didn't read that. I was busy and just thought I'd post this in case it hadn't been suggested, and since time is of the essence.
        Edit: That was meant to be a reply to the comment below \/

    • geech on 28/06/2019 - 13:05
      +1

      Cooling off period is usually 5 business days in NSW, and by using it the purchaser will usually have to forfeit 0.25% of the purchase price - so it sounds like that's the avenue the OP has used in this case.

  • t_c on 28/06/2019 - 12:17
    +1

    Did you low ball on one of the damaged units in Sydney?

    What was your total loss?

    0.25% of 600k is only $1500

    • Dr Techno on 28/06/2019 - 13:19

      I was thinking this. might be better to lose 0.25% then deal with cost of repairs if vendor bails out.

      • Ash-Say on 28/06/2019 - 14:28

        Repairs are likely to be more than deposit :)

        • Dr Techno on 28/06/2019 - 17:50
          +1

          thats the thing with old houses. you never know what you finally get until your living in it for awhile. but then again its probably true that all houses are not perfect. It seems like a gamble no matter which way you go.

          • FrugalDealHunter on 30/06/2019 - 09:20

            @Dr Techno: Same with new houses. They have not stood the test of time to see how the soil will move , whether there's going to be any slab heave, is the frame sound, etc…

  • rave75 on 28/06/2019 - 13:13

    I was a vendor and buyer wanted me to do some repair and cleaning. They wanted to put them in contract and I refused, stating I will agree only in writing as I didn't want them to use reasons such as "repair was not done properly, house not clean enough etc) to cancel the contract. I told the agent in writing that I agreed to do the lists but won't put in the conditions of sale because putting them in contract might give buyers a way out of the contract without losing deposit. Of course I did the repair lists + clean before settlement.

    When the agent agreed to you, did they give any indication that the vendor did agree too? When I wrote an email to the agent that said I agreed, I assumed the agent forward the email to the buyer as well.

    • Ash-Say on 28/06/2019 - 14:30

      At the time of accepting offer and agreeing to conditions, the agent advised in writing that the vendor has left to his discretion to make a decision. Would you have asked for evidence of this authority?

      • rave75 on 28/06/2019 - 14:48
        +1

        Yes, I would have. Sounds like the agent is lying. I mean as a vendor, I wouldn't just authorise them to include repair on things. It is a hassle to arrange etc. But in my case, the buyer wanted $5k off for things that I knew would just cost me less than $1k.

        The agent did ask the buyer to sign only with verbal agreement that I'd do those repair. Technically I could not do the repairs and get away with it and the buyer would lose 0.25% deposit if they use the cooling of period. All the agents care is getting the buyer to sign the contract, they will say anything.

        How much approximately the repair will be and how much deposit you paid?

        The only chance I can see is that go to Fair Trading and even then you would only waste your time as Fair Trading cannot enforce an agent to pay something. They will issue a notice / fines if they found evidence that a RE breached some rules. Most likely just notice for something small like this. The agent I did report to Fair Trading was more concern about getting into Fair Trading "radar", I suggest discuss with the agent why you think they are misleading (since you said you have something in writing by the agent before you signed) and that you will go to Fair Trading. Try to get the RE pay/partially pay for the repairs etc. I don't see how you can get your deposit back if you decided not to follow through with the purchase.

        • Ash-Say on 28/06/2019 - 15:12

          Claim would be against agent not vendor.

          • rave75 on 28/06/2019 - 17:24

            @Ash-Say: Yes, I believe I made that point clear, claim would be against agent. I see you have reported them to Fair Trading which should investigate whether the agent has breached anything. You do need to go to NCAT to try and get your money.

            • Ash-Say on 28/06/2019 - 17:31

              @rave75: Yes waiting for Pincipal of agent to revert before escalating it to NCAT.

              • rave75 on 28/06/2019 - 17:33
                +2

                @Ash-Say: Good luck. I've been there, had a dodgy co-director of RE and dodgy tenant too (criminal). But in my case, going to NCAT would be a waste of time and money as turns out there was no paperwork with the tenant.

                • Ti-au on 28/06/2019 - 20:37
                  -2

                  @rave75: My guess is Op will lose in NCAT too.
                  And probably deservedly so.

                  • Ash-Say on 28/06/2019 - 20:58
                    +4

                    @Ti-au: You just hate people. Please leave us alone.

              • MITM on 29/06/2019 - 07:33

                @Ash-Say: You’ll be waiting a long time. Principal is ignoring you and hope you go away. He’s probably gone fishing in his big boat you helped pay for.
                Have you seen a solicitor yet to sort out this mess ?

                • Ash-Say on 29/06/2019 - 08:22

                  @MITM: He has been given deadline to provide refund so he can't ignore the email. NCAT claim will be lodged if he doesn't response by deadline.

  • justwii on 28/06/2019 - 14:12

    I say claim your lost from your lawyer as he/she should be working for your best interest. His/she professionalism should not allow such silly action to add additional clauses and terms AFTER the contracts were signed and exchanged.

    • rave75 on 28/06/2019 - 14:50
      +1

      I don't thing the contracts has been exchanged? Seems like buyer signed a contract, paid the 0.25% deposit, contract has not become unconditional yet.

    • Ti-au on 28/06/2019 - 20:29

      Its not a lawyer, its a conveyancer (literally no lawyer would be this stupid).

  • bitcoinorbust on 28/06/2019 - 15:13
    +1

    Just the norm for a used house salesman

  • trapper on 28/06/2019 - 19:03
    +1

    Don't you have 'subject to finance' in your contract? This is usually the get out of jail free card… "oh sorry I couldn't get finance"

    • Ti-au on 28/06/2019 - 20:29

      No it won't be.

      Go read cases.

      • trapper on 01/07/2019 - 17:59

        What is the purpose of a reply like that.

        If you don't agree why not just make your point? I am happy to be enlightened by your superior knowledge of cases.

        • Ti-au on 01/07/2019 - 20:15

          There was a case recently where a person tried to claim this (i.e. finance clause).

          Chinese buyer buying a expensive unit off the plan, being sued for non completion in Supreme Court NSW, lost case and appealed, Appeal judges knocked back appeal.

          Basically the case was as follows: Chinese buyer put offer on property, then bulked. It wasn't exactly clear why but refused to go through with the purchase of property (*ed: probably wanted to flip it themselves). Initially the Chinese buyer had a litany of complaints with the property of why he didn't want to settle (workmanship to differing outlook). Finally the purchaser tried to use the finance clause (long settlements as was off the plan). The court rejected that as he had not attempted to get pre-approvals, approached a bank or used a broker, in fact he had just rejected the property and done nothing else.

          I'll try and find the case name.

          The point of that reply is its wrong to simply say its a get out of jail free card. What are you basing that assertion on?
          Its wrong for a number reasons too - 1. Does it depend on how the clause is written? Yes (which means some contracts are not going to get you out of hot water);
          2. Some evidence that supports the particular clause that you hold is a get out jail free card.

          I will point out that on a lot of contracts, the finance clause states have: "(b) has done everything reasonably required to obtain approval of the loan;"
          You better be able to show the Court that you done just that, otherwise the 'get out of jail clause' will fail spectacularly.

  • ihbh on 28/06/2019 - 19:45

    What suburb does this agent operate in?

    • Ti-au on 28/06/2019 - 20:31
      -2

      Uggghh.

      What are you going to do? not buy a house in that Suburb?

      As useful as saying what country does this agent operate in?

  • gstfree on 28/06/2019 - 19:53
    -1

    Talk to the vendor nicely and ask 50% back if you run busy life.

    If you have time, lodge a complain to the supervising agency and eventually you will get your deposit back.

    Good luck.

    • Ti-au on 28/06/2019 - 20:33

      if you run busy life.

      Yes run busy life entitles you to 50% back.

      If you have time, lodge a complain to the supervising agency and eventually you will get your deposit back.

      ?

      No. Just no. I could say "lodge a complain" to whom? But it's easier not to engage.

      • Ash-Say on 28/06/2019 - 21:00

        As I said you hate people so leave us alone :)

  • lippy on 28/06/2019 - 22:40
    +3

    Never trust what agents tell you or promise you. They will say everything in your favour to get the deal. Once you sign the contract and pay they will forget about you.

    If the amendments are not agreed on contract, the vendor is not obliged to fulfil this.

  • porsche26c on 29/06/2019 - 06:54
    +1

    i hope other people learn a lesson as well.
    1. i always use a solicitor. doesnt charge much more and is a bull shark for me when it comes down to it.
    2. my solicitor obviously makes sure everything is in the contract but asks me to check his copy with the agents copy line by line (i just looked at the first word of every line to make sure its the same).

    you cant trust anyone and just need to make sure everything is in the contract. unfortunately a gentleman's handshake doesnt exist anymore.

  • virtuousdee on 29/06/2019 - 10:31
    +2

    Hey OP,

    The purpose of the 0.25% is to reserve the property so that no one else can have the opportunity to buy the property before you. During the cooling off period, you have the opportunity to make changes to the special conditions and make sure you have pre-approval to to complete settlement.

    It sounds like the agent was making misrepresentations just to make a sale but there is no evidence that the agreement was made in the contract. The first time you sign a contract means you agreed all the conditions within it. The vendor is not obligated to make any changes.

    The proper way was for you to grab the vendor's contract and bring it to your lawyer/conveyancer before you sign it, unless you really know what you're doing.

    It's unlucky that the vendor wasn't friendly about this.

    Good luck in your future purchase.

    • Ash-Say on 29/06/2019 - 11:11

      This is what's quoted on ACCC wesbite.

      It is illegal for a business to make statements that are incorrect or likely to create a false impression. This includes advertisements or statements in any media (print, radio, television, social media and online) or on product packaging, and any statement made by a person representing your business.

      For example, your business must not make false or misleading claims about the quality, value, price, age or benefits of goods or services, or any associated guarantee or warranty. Using false testimonials or ‘passing off’ (impersonating another business) is also illegal.

      When assessing whether conduct is likely to mislead or deceive, consider whether the overall impression created by the conduct is false or inaccurate.

      I agree there was oversight from my end for not making sure these special conditions have been incorporated into contract before I signed it. That's said, the agent was making clear misrepresentation and his conduct was deceptive.
      Therefore I am making claim against him for misleading me and created an impression he had full authority to make decisions on behalf of the vendor.

      • virtuousdee on 29/06/2019 - 12:35

        Hey OP,

        Yes definitely give it a try. If you have emails confirming this misrepresentation, you could have a case against the agent.

        Look at misleading and deceptive conduct or unconscionable conduct if you felt you were pressured in entering into a contract.

        Curious of how this would go so let us know of any closure!

      • aliam on 29/06/2019 - 12:46

        Have you gotten a lawyer to write a letter to the real estate agent?

        If you are so sure you are in the right, don't waste your time waiting for the principal to act; nothing will happen until your lawyer contacts them. They'll just hope you go away in the meantime.

        • Ash-Say on 29/06/2019 - 13:02

          Thanks for your advice. There are 3 days left for the Principal to respond. At least this will help me to demonstrate to NCAT they I tried to reach resolution with the agent before lodging with the claim.

  • ribze1 on 29/06/2019 - 12:43
    -2

    2am.
    Rocks.
    Windows.

    Karma

  • Trying2SaveABuck on 29/06/2019 - 16:35

    wasnt Ray White Taylors lakes was it? those bastards would say anything for a dollar?

  • Ash-Say on 29/06/2019 - 21:21

    Can someone please guide me best NCAT category that fits my claim? I have been looking since morning but can't find relevant category

    Many thanks

    • MITM on 29/06/2019 - 22:15

      Ring them. They are there to help you.

      • Ash-Say on 29/06/2019 - 22:16

        Thanks will do on Monday

    • pndl on 29/06/2019 - 22:53

      NCAT will only deal with 'consumer' claims… generally this means purchase of goods or services under $40000… for general contractual claims you will probably need to go to the Local Court

    • aliam on 30/06/2019 - 04:19

      You already made one mistake with the contract, just see a lawyer on Monday and get it sorted out. I'm not sure how much money is at stake, but rather than compounding your problems/getting legal advice online, I would consider the small investment in seeing someone with legal experience in this area, as it may improve your chances of success, as well as speeding the process up.

      If you act on the wrong advice online, it can create more difficulties. Good luck - the email thread you have should immediately let a lawyer know if you have a chance to proceed and win.

  • Powershopz on 30/06/2019 - 12:01

    Bad luck OP. Sounds like the agent screwed you over.

    Next time potentially get a solicitor rather than a conveyancer who could help steer you in the right direction. I almost got myself into the same situation you did when I purchased my first house but was given some decent legal advice from our solicitor.

    • Dr Techno on 30/06/2019 - 21:02
      +1

      there can be bad solicitors, so check reviews before hand.

  • roddo on 30/06/2019 - 16:56

    I had a similar issue when buying my first place. There was a problem with the retaining walls along the boundary not being up to scratch and the car port pole and driveway moving because of it. I talked with the agent about this, they said that it would come up in the structural report and be fixed because at that stage. So I paid the deposit, pending the pest/termite and structural inspection. The report called it a "minor defect" and because of this, they didn't think they had to act on it.

    Real estate agents are snakes - they'd lie through their teeth to get the sale. No integrity at all. Don't trust them, they are acting for 1) themselves and 2) the buyer.

  • Sofie519 on 30/06/2019 - 22:20

    The Agent is authorized by the Vendor to act on the Vendor's behalf, so you are not wrong to assume that any agreements/representation made by the agent is that of the Vendor. As long as you have everything in writing.

    Contact Fair Trading, with the Agent's details, and details of the whole situation and proceed to make a claim against the Agent for liability, as long as all your paperwork is in place, it is likely that either the Agent or their professional indemnity insurer will settle out of court. At the same time file a claim in Court for damages. Basically Fair Trading administers Real Estate Licensing and will investigate, impose penalty etc on the agent. Local Court is where you will either get a stop / extension to the contract and seek damages + costs. If your Legal representative acts swiftly and sternly, it wont go too far, and the Agent/Vendor will likely settle the matter to avoid delay in sale and further costs.

    This is also the part where you need to consider whether the qualifications of a Conveyancer (a practitioner that administers the paperwork of a property sale/transfer) is sufficient compared to appointing a Solicitor who is experienced in Property Law.

  • [Deactivated] on 30/06/2019 - 22:22

    Use a lawyer and not a conveyance. Might cost more, but circumstance like this will save some pain.

    1. Given it is not in the contracts, chances are slim. Can always try arguing the agent is acting on the seller's behalf.

    2. If one fails, claim against agent. Personally, I would go as far as going to the state tribunal, or a court case where the amount is substantial. Chances are not bad, given the agent has responded in writing.

    My advice, get legal advice, or at least speak to a friend that is a qualified lawyer.

    Not sure how nasty you would like to be. Try an injunction on the settlement (if you go ahead with option 2) until your dispute on the minor repairs are sorted. (Not sure if this is possible, lawyer is your go to person). Might as well share the mess with the seller.

  • vid_ghost on 01/07/2019 - 09:26

    cooling off is when inspections are carried out. If they fail you get back 100% of your money.. minus any 0.25% holding fee ..around $1000 to $1600

    Not all real estate agents charge this starting contract fee.

    Apart from that.. its 100% up to the owner if they refund you the money or not. that's the law.

    Ive done this 3 times now and have only ever pulled out of two properties after the inspection. Never would i wave the cooling off period or buy at auction and HAVE no cooling off

  • Ash-Say on 03/07/2019 - 17:10

    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.

    • gimme on 04/07/2019 - 10:44

      Actually a lot of the advice was rubbish. According to the majority here you wouldn't have received a refund. Glad it all worked out.

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