Unhappy buyer's agent client

[Rolf Latham]

Nothing to do with values having fallen. Quite simply the block which was bought at land value or thereabouts is worth $100 000 less because it can't be subdivided. That applies today and also applied when I purchased it. It simply was not worth the asking price because of this and a BA who was doing their job properly should have picked up on this - that was their brief.

Go and fish for the PI insurance.

if its documented that this is what was required, and you have good documentation that clealry says it is subdivisable according to your brief, and you acted in reliance of that information, and you have suffered loss as a result of that information being false, then it would be worth having a chat with the BA for a start, and if that doesnt tale u anywhere, then a good solicitor to see if its worth taking on

ta

rolf

 

[Ideo]

Hang on - have the local council regulations changed, meaning that the block cannot be subdivided any more?

Have you put in a DA for a subdivision? Done any feasibility?

Lot of grey areas with property development.

 

[Aaron_C]

Lot of grey areas with property development.

I would say it is one big grey area.

 

[Ideo]

I would say it is one big grey area.

That too

Without knowing any details about where it is it's too hard to make a call.

Maybe there is a heritage overlay recently put in place. Or endangered species on site. THe land might have been rezoned. New flood modelling could have been done. A sea level rise policy introduced.

There's a long list of things that can change in 2 years.

 

[Propertunity]

Go and fish for the PI insurance.

Good advice!
Hopefully the BA you engaged was/is insured (although it is not a requirement to be licensed, currently). But it certainly is a benefit to use any professional, BA or otherwise, that has PI.

I'm not saying your BA didn't (as I don't know), but I'd be surprised if you'd find any BA that would have given you a guarantee that any block purchased could be subdivided.

There is no council officer I know of, in any of the regoins we buy in for clients, who will give a definite "yes" or "no" to the possibility of any block being sub-divideable. They all, in every case, will say "You'll have to submit an application (DA), to get a definite answer".

The best anyone can do, is find something that ticks all the requirement's boxes, to give you the best chance possible but it is still always at the discretion of the Council or if the decision is appealed, by the Land & Environment Court.

As the others have said, your chance of making a successful claim lies with the contract you signed and the information that was provided to you from the BA.

When you say sub-divideable, do you mean as in splitting a block into 2 sep. titles? or do you mean as in a 'strata sub-division'?
I find it difficult to believe that you paid a premium of $100K on a $400K property just to be able to sub-divide into 2 lots.
Did you need finance for the purchase (as it seems you did from your comments about the interest charges)? If so what was the opinion of the valuer from the lender? Surely this is a second professional opinion you could have used as a safety net?

 

[evand]

Was their brief in writing? You didn't respond to my previous post so i guess not.

 

[Fourducks]

Thanks for all the comments. Regulations have not changed since purchase. It is simply a case of the buying agent not doing their homework properly. And yes the brief was in writing.

 

[travelbug]

Aha!! getting somewhere.

Unfortunately you are not alone (with purchasing a block and assuming it can be subdivided).
I went to seminar once and they said 75% of blocks that people assume they can subdivide, can't be.
Personally I wouldn't have bought a block without the paperwork in place for subdivision approval (unless it was so cheap it wouldn't matter). But to pay $100,000 more for something you have no guarantee of is crazy.

Can't comment on what you were told/promised by your BA. But if they made promises that weren't upheld I'd say you have a case.

 

[Jacque]

Good advice!
Hopefully the BA you engaged was/is insured (although it is not a requirement to be licensed, currently). But it certainly is a benefit to use any professional, BA or otherwise, that has PI.

I'm not saying your BA didn't (as I don't know), but I'd be surprised if you'd find any BA that would have given you a guarantee that any block purchased could be subdivided.

There is no council officer I know of, in any of the regoins we buy in for clients, who will give a definite "yes" or "no" to the possibility of any block being sub-divideable. They all, in every case, will say "You'll have to submit an application (DA), to get a definite answer".

The best anyone can do, is find something that ticks all the requirement's boxes, to give you the best chance possible but it is still always at the discretion of the Council or if the decision is appealed, by the Land & Environment Court.

Salient advice here from Prop, and I know that it wasn't with our agency, as such guarantees are almost impossible. As BA's, our job is to search, assess and negotiate- not deal with development applications. The DA process is long-winded and difficult with most Sydney councils at the best of times, and even with purchases that involve options or owners signing off on documentation prior to ownership passing hands, there is no guarantee with councils (or a private certifier) that any complying development will meet their LEP or SEPP requirements until the application has been processed.

Without knowing the details of your particular purchase and agreement with the particular BA, I'm sorry I can't offer anything further but best of luck with it all and, if you do have a case, it is best to pursue it via the PI insurance (any BA worth their salt should have minimum $2m)

 

[mattnz]

Propertunity's comments are spot on.

A BA can't be expected to have the ability to guarantee that a property can be subdivided, as even the council officers that approve this can't provide this guarantee.

The only guaranteed way would have been if a DA was already in place. There are however certain factors which would almost guarantee that it couldn't be subdivided and built on, for example in a flood zone or heritage listed with the house in the middle of the block. If they missed basic due diligence of this kind, then you may have recourse.

Also goes to show that you shouldn't pick some random BA to do a specialist job. If they aren't a developer or town planner themselves, don't expect them to have any greater specialist knowledge than you do.

 

[BayView]

I would like to hear from anyone who has had a bad experience with a property purchased through a Buyer's Agent.

Have you taken legal action or had any luck with resolving the issues with the Buyer's Agent? Any advice would be very welcome. Please post your stories here or private message me. Thank you.

Sorry, but my view on buyer's agents is you are paying someone else to do your Due Diligence for you, - ie; paying for being lazy.

Now, some would argue they are too busy or whatever, so they have to pay someone else to do the running around....boolsheed in my opinion.

If you wanna fork out thousands to get someone to buy a place for you, then you cop yer right whack.

Only exemption; someone who is moving interstate to live, and has to keep working until the move.

But; I've managed to do it more than once, so... if I can, then everyone else can.

 

[Ed Barton]

Thanks for all the comments. Regulations have not changed since purchase. It is simply a case of the buying agent not doing their homework properly. And yes the brief was in writing.

you haven't answered the question about where it was. we can therefore only assume it was in an area where 20% drops are normal; GC, SC, Cairns and other QLD coastal areas.

i think you expected too much of a buyers agent.

 

[MsAli]

you haven't answered the question about where it was. we can therefore only assume it was in an area where 20% drops are normal; GC, SC, Cairns and other QLD coastal areas.

i think you expected too much of a buyers agent.

I don't think it's too much to expect. A fee is paid to the BA for the advice. No one in their right mind over pay 100k. Obviously they paid that as they believed it was sub-dividable.

 

[Ace in the Hole]

I can understand the purchasor expecting the BA to get it right.
But surely everybody would have a spare 5-10 minutes to confirm a property is subdividable.
Knowing the property was 100k more than comparible properties which were not subdividable, it would have been the only reason the purchase was made.
This is the most important detail of the deal and more attention should have been given here, by both parties.
Prevention is better than cure.
It's always good to get a 2nd opinon or confirmation before committing to a purchase such as this one.

 

[willair]

And yes the brief was in writing.

May make very little difference,there would be something down the bottom of the page in small print that covers what ever is said,you can only look at it 2 ways you walk away a learn that one simple phone call too the local town planner would have sorted it,or you employ a Legal person spend time worry stress and come out the other end back where you started..imho..

 

[Deena]

You are getting great advice here, it is like pulling teeth getting more specifics from you so people can assist you more

 

[Jacque]

Sorry, but my view on buyer's agents is you are paying someone else to do your Due Diligence for you, - ie; paying for being lazy.

Now, some would argue they are too busy or whatever, so they have to pay someone else to do the running around....boolsheed in my opinion.

If you wanna fork out thousands to get someone to buy a place for you, then you cop yer right whack.

Only exemption; someone who is moving interstate to live, and has to keep working until the move.

But; I've managed to do it more than once, so... if I can, then everyone else can.

With all due respect Bayview, people don't outsource to services because they're simply "lazy". Otherwise, why wouldn't everyone sell their own homes or investment properties, do their own book-keeping, conveyancing etc? Not everyone has the disposition, knowledge, experience, confidence or time to learn the ropes or conduct their own DD when buying or selling property.

 

[Sailesh Channan]

A buyers agent is generally used to source a property within certain guidelines. He can then make a recommendation however, the contract should have a due diligence clause which involves getting a townplanners written opinion. This can cost as $300.00 or you can do it yourself however, it is always best to get professional advice. If he detects concerns then he may request further investigations from engineers, etc.

At this stage you may decide it is getting too complicated and you can decide to pull out and loose $300.00 rather than potentially loosing thousands.

Buying a development site takes months of research and I am not sure a standard agents fee would compensate him or her for the amount of time spent searching. It took us 8 months of searching by a full time staff member to find one viable site.

Therefore, I dont believe that the BA or you understood the brief before going into the process.

 

[evand]

But 99% do.

Not everyone has the disposition, knowledge, experience, confidence or time to learn the ropes or conduct their own DD when buying or selling property.

Re the Thread topic, It's very rare that the development potential isn't built into the price of a property. I bought one about 20 years ago and haven't seen one since. If your BA though he could get the property for $100k below, he was kidding himself, a liar or incredibly inexperienced.

 

[Sailesh Channan]

But 99% do.




Re the Thread topic, It's very rare that the development potential isn't built into the price of a property. I bought one about 20 years ago and haven't seen one since. If your BA though he could get the property for $100k below, he was kidding himself, a liar or incredibly inexperienced.

Correct,the development potential is usually built into the price however, if it determined that the property cannot be developed then you instantly loose that value plus loose all the costs associated with the purchse and subsequent sale of the property leading to massive losses.

The reasons why a property cannot be developed are many and varied and that is why professional opinion needs to be sought.