Can I sue the realestate agent?

[Tim86]

As you can see from my other thread. The subdivision that council initially told me would be approved. Has been rejected.

No subdivision is possible.

Now the ad for the property by the realestate agent stated the property was subdividable.

"This is a perfectly positioned 1012m2 corner block which can be subdivided with 2 street access."

http://www.realestate.com.au/property-house-qld-salisbury-110642897

Obviously we over paid because the block was apparently subdividable.

Plus all the costs with trying to get the subdivision approved. Plus holding costs, etc...

Would it be possible to take legal action against the realestate agent for a false advertisement?

Or maybe more importantly, would it be practical?

Thanks

Tim

 

[TMNT]

I feel for you, I really do,

im surprised the agent didnt put in STCA

I am no lawyer but I doubt agents can be sued, or else the courst would be full of agents being sued

 

[Terry_w]

Yes, you could sue the agent - but you should be asking "should I sue the agent".

Are you prepared to fork out tens of thousands in legal fees with a risk that you could lose, have to pay your own legal fees as well as the agent's? face a court judgement - bad for wealth and credit history.

But you should talk to a litigation lawyer as you may be able to begin the process and see where it takes you.

BTW, did the council tell you you couldn't subdivide or that it may be possible if certain conditions are met.

Print off a PDF of that page too, before it is taken down or changed.

 

[Terry_w]

I feel for you, I really do,

im surprised the agent didnt put in STCA

I am no lawyer but I doubt agents can be sued, or else the courst would be full of agents being sued

They get sued all the time and they sue all the time- double commissions are a big one.

 

[pinkboy]

I would also screenshot this ad, and document anything else which relates to the sale, including any conversations with the agent regarding its suitability to be subdivided.

Document, document, document.


pinkboy

 

[marg4000]

You were initially told by the council that sub division was possible, so no doubt the vendor and RE agent would have received the same advice.

Legal action will be costly with no guaranteed outcome. At worst, if the decision goes against you then you may also be up for the other party's costs as well as your own.
Marg

 

[jrc]

The real issue is if the block cannot be subdivided did you pay the value for a one lot block that cannot be subdivided. Actions. for negligence are meant to put you in the same position as if the negligence hadn't happened ie your potential profit is not likely to be taken into account. Did you tell the agent you were going to subdivide before contracts were exchanged. Did you rely on the agent or did you make your own inquiries and proceed from that, did the agent know you were relying on the statement?

If you take legal action even if you are successful then you will not normally get back all the money you have spent on legal costs, possibly you might get back around two thirds.

There is a thread from several years ago where I think a purchase's solicitor was negligent, but the purchaser was unable to recover anything because she couldn't show a loss

 

[Terry_w]

This would probably a false and misleading conduct matter. This comes under the Australian consumer law (old trade practices act) and also state legislation relating to real estate agents. Directors of a company can be personally liable too.

 

[eKwatee]

Why not approach the agent and ask them:

1. To resell the property for you at no charge.
2. To reimburse you the difference, should the sales price be less than what you were out of pocket.

or you will pursue the matter in the courts. Might be worth a try.

They might just sell it for a little more than you paid and all they are out is their time and marketing expenses.

 

[willair]

I know that area Tim,and I'm not a legal person but sometimes you have to draw a line in the sand and work out which side you want to stand on..

"This is a perfectly positioned 1012m2 corner block which can be subdivided with 2 street access.."

That's what the add says in black and white,and from my simple understanding you would not be taking legal action against the
2 agent who's name in on the add,but the principal of real estate agency
whom you purchased the property from,so the question is do you have deeper pockets then the principal,with all the stress worry time and you still may walk out of court with the gentleman in the silk wig with nothing
and end up in the front bar of the legal peoples drinking holes in Brisbane thinking "WTF" just happened,you gotta know when to walk and when to talk..good luck..

 

[Terry_w]

,so the question is do you have deeper pockets then the principal, .

And their insurers - but you could probably sue the vendor jointly too.

 

[jim1964]

im surprised the agent didnt put in STCA

You see STCC here quite often in Adelaide,the agent wouldn't know j@ck Sh&t half the time.Its a great selling word sub-dividable.

 

[willair]

And their insurers - but you could probably sue the vendor jointly too.

Terry keeping a diary is the least you can do in these circumstances , but with your vast knowledge and skill in randomness-laden professions like real estate sales something like this can go either way..or just go ring up one of those 6.30 crying game tv shows and see what they can do..

 

[Terry_w]

Terry keeping a diary is the least you can do in these circumstances , but with your vast knowledge and skill in randomness-laden professions like real estate sales something like this can go either way..or just go ring up one of those 6.30 crying game tv shows and see what they can do..

Yeah, it could go either way. Even people in the right lose.

 

[wylie]

Yeah, it could go either way. Even people in the right lose.

Amen to that. The first words our barrister said to us was "you are in the right and he must fight to get anything". Pfffffttt!!! Didn't quite happen that way .

What is legally right doesn't mean squat if you have to pay lawyer and barrister the same amount as you risk losing. We could have fought for the moral win, but risked losing as much as we paid in "go away" money just to prove ourselves right.

Lose/lose for us.

It wasn't a risk we were prepared to take, especially as by the time the first letter landed on us, first we knew he was making a grab at money, his legal bill had already hit $22K, so we weren't prepared to risk it dragging through the courts.

I would avoid the legal route unless you are sure you will win. We were "almost" assured we would win in our recent legal stoush, but that win was likely to cost us as much as we paid out to make it "go away".

And of course, had we lost, we would have lost considerably more than we paid to make it "go away".

If you can get something out of the agency without spending too much, do that. If not, I reckon your best bet is to make that lemonade as best you can with minimal cost.

 

[Macca]

As advised, save everything first.

I would be talking to a lawyer who knows his stuff then I would get them to write to the principal of the agency and ask for a free resale or compensation else legal action would commence.

They may well make an offer to avoid legals and bad publicity, if they don't then you need to rethink but could be worth a sternly worded letter to find out.

Of course, if the council would have allowed subdivision at the time it was advertised then you are up the creek. I realise the rules may have changed but that is not the REs fault

 

[RPI]

If you wanted to do this.

If it went all the way trial
1. Our fees would be north of $50k, barristers fees, expert witnesses and other costs on top of this.
2. you would be spending hours and hours hanging out with lawyers (riveting I know)
3. There would be 5-7 large ring binders of documents in it.
4. it would be draining.
5. If we win you should get 50-60% of your costs on top of your loss
6. If we lose, you will pay 50-60% of the other side's costs on top of your loss

We run this sort of matter all the time, my Senior Associate litigator and the barrister he briefs on this sort of matter could do this standing on their heads. It is not a particularly complex matter BUT it is something that needs a large amount of documentation.

The first advice we would give you is that you must show that you have attempted to mitigate your losses. This means you MUST appeal the planning decision within time (which is fast running out).

So you would need to run the planning and environment court appeal matter first anyway. If you are considering doing this you need to move now, or you will be out of time. If you win the appeal (very possible) then you have no action to take against the REA. If you lose the appeal then you have mitigated your loss and you start the action for damages.

Cheapest way is still to put in a new application with a more supportive hydrological expert.

If that is not an option then appeal the matter in planning and environment court and we go to mediation and sort it out for $10-$20k.

 

[Tim86]

Thanks for the replies everyone.

All good information to know.

I don't know how to comment on how expensive and difficult the legal system is without sounding cliche. And the fact of the matter is, a lot of people have it much worse than I.

I guess the reassuring thing for me, is that if I ever do something that someone wants to sue me for, I now know that it's very unlikely that they'll go ahead with it because it's such a costly process

RPI, I'm wondering, how would there be any way around the issue with the subdivision? It seems pretty black and white to me. You have to raise the level of the blocks of land. This WILL cause the other blocks to be more prone to flooding... Why would another hydrologist say any different?

"If that is not an option then appeal the matter in planning and environment court and we go to mediation and sort it out for $10-$20k."

What would that actually look like? Would it be successful. If so why would it be successful if we don't meet the councils criteria for subdivision?

 

[perthguy]

Cheapest way is still to put in a new application with a more supportive hydrological expert.

Just a question on this. Say Tim got a new (and more favourable) hydro report, lodged a new application and had the new application refused. If he then took that application to planning and environment court, can the BCC use the previously lodged (less favourable) hydro report as evidence?

If not, the way forward may be to:
- get a new hydro report
- lodge a new application
- if the application is refused, appeal the matter in planning and environment court

You would have to work out if this is worth it and the chances of success if you took this path.

 

[westminster]

I spent a very tense 2 weeks in the past month on a similar matter.

A REA didn't disclose something he reasonably should have known/found. As part of his duties a prudent REA would have found it and disclosed it as part of their duties in their code of conduct.

It dramatically impacted on the viability of a block because there was a road widening reservation on it which meant 3m along a 40m boundary could not be developed on. Voila 120sqm completely useless on a 788sqm block.

My settlement agent found it and thankfully they are a lawyer so into the fray we went. Our argument was that they didn't disclose something that materially affected the useability of the land. Their argument was that mistakes and errors are allowed (sounded better legally)

Letters flew back and forth. Their settlement agent (non lawyer) got out of their depth so they paid a lawyer to right a letter but that was it. The REA got narky. I refused to settle until I got a reduction in price. It got heated. In the end the person with the most to lose was the Seller as they had bought another property. 2 days after settlement was due we came to an agreement and did a last minute settlement on the 3rd day.

I was lucky. I still have the opportunity to have a go at the REA but as pointed out above it's a lot of work and the person in the right doesn't always win.