RE Agent lodges Caveat for Commission!!!!

[Terryw]

Someone sent me a link to this interesting article by Peter Mericka:

Conveyancing Consumer Alert - Beware of the Sneaky Stamp!

My Summary:
- Agent selling the property place a "sneaky stamp" on his Sales agreement with the vendor
- The sneaky stamp contained a clause which allowed the agent to place a caveat on the property if his commission wasn't paid.
- With one sale the amount held under the deposit was not enough to pay the agent's commission in full
- As a result the agent demanded payment before settlement or at settlement
- Cheques had already been drawn
- So agent lodged a caveat on the day of settlement!

Check out the article for a pic of the stamp. You would have needed a magnifying glass to read it!

 

[NBS]

Thanks for sharing that tit bit was an interesting read.

I would be ******* off as a purchaser to be given the run around on settlement day for something thats not my fault.

If the agent refused to remove the caveat until he was paid in full and refuses to pay for the $71.00 would this give the purchaser grounds to pull out of the contract.

Brian

 

[NedKelly]

I don't know about NSW but in QLD I would say this couldn't happen. I doubt it would allowed as it would have to be full disclosed on the PAMD form the seller signs when appointing the agent.

 

[Player]

Very interesting Terry.

Would not that added stamped clause have needed an initial by both venor and rea acknowledging it's unconventional position on the exclusivity authority and tiny font?

Ya learn something every day.

 

[mech81]

Something worthwhile to know. Sneaky and downright ugly. Taken that RE agent's and RE place to mind.

 

[Terryw]

Very interesting Terry.

Would not that added stamped clause have needed an initial by both venor and rea acknowledging it's unconventional position on the exclusivity authority and tiny font?

Ya learn something every day.

Not really, but ideally the agent should have the seller initial - otherwise there may be disputes about when the stamp was added + did the buyer even know about it?

 

[womble66]

Yes the stamp is sneaky but how often would the deposit held be less than the sales commission?

In NSW its generally 10% deposit, sometimes an agreed lower rate of as low as 5% maybe even lower, but usually Sales commissons I feel are less than 3% in general.

 

[Terryw]

I don't know about NSW but in QLD I would say this couldn't happen. I doubt it would allowed as it would have to be full disclosed on the PAMD form the seller signs when appointing the agent.

It probably could happen I imagine. When lodging a caveat the caveator just has to describe the interest claimed. ie The lodger just has to list on what basis the caveat has an interest. In this case they may say something like "an equitable interest puruant to a contract xxx".

However, just because the caveat is lodged doesnt mean it is valid. But it would be enough to hold up settlement and cause problems.

 

[cu@thetop]

I don't know about NSW but in QLD I would say this couldn't happen. I doubt it would allowed as it would have to be full disclosed on the PAMD form the seller signs when appointing the agent.

It can and it does. I last encountered it as a special condition by Ray White at Surfer's Paradise (Player take note as you live in that neck of the woods). It is included as a term of the contract of sale (not agency appointment) described as a condition for the benefit of the agent.

How to get rid of it? Both buyer and seller can agree to ammend the contract by the deletion of the clause

If an agent caveats the property they could then be sued for consequent loss.

In Qld watch for the standard agency appointment as to when commission is payable. Delete the first three and only allow the one where it is payable on completion/settlement.

Payable on "sale" means when there is a signed contract ie- straight away!

 

[NedKelly]

It can and it does. I last encountered it as a special condition by Ray White at Surfer's Paradise (Player take note as you live in that neck of the woods). It is included as a term of the contract of sale (not agency appointment) described as a condition for the benefit of the agent.

How to get rid of it? Both buyer and seller can agree to ammend the contract by the deletion of the clause

If an agent caveats the property they could then be sued for consequent loss.

In Qld watch for the standard agency appointment as to when commission is payable. Delete the first three and only allow the one where it is payable on completion/settlement.

Payable on "sale" means when there is a signed contract ie- straight away!

I found this article which explains the story of the Gold Coast agent:-

http://www.lawyersconveyancing.com.au/news/conveyancing_241_sneaky_stamp_follow_up.asp

 

[cu@thetop]

I found this article which explains the story of the Gold Coast agent:-

http://www.lawyersconveyancing.com.au/news/conveyancing_241_sneaky_stamp_follow_up.asp

Thanks for that- I met Tim once at a social function and he seems a nice enough guy. Does seem to have a bit of time/energy to burn though!