1. REAA Case Studies

2. Case Study One Identifying the source of representations A number of agents have got into trouble by repeating information that came from the vendor without identifying it as such. An agent described a warehousing unit as of “solid construction” and having full services because the vendor told him that was the case. The building had a portion of timber frame covered by corrugated iron which was in poor repair in places but that was not obvious. It also had not hot water. The purchaser complained to the REAA when he found the faults in the iron and lack of hot water. By passing the information as if it was a fact, without identifying the source, the agent was presenting it as the agents information. Given the information was not accurate the agent was responsible.

3. Case Study One While this case has not been concluded we would expect that the agent involved will be charged with unsatisfactory conduct. SO… Ensure a simple disclaimer, “Information about this property has been provided solely by the Vendor. When discussing information with prospective purchasers make it clear that the information has come from the Vendor.

4. Case Study Two REAA decisions on agents and Certificate of Title’s An agent acted on the sale of a commercial property and marketed it as “Suitable for Development”. The eventual purchaser made it clear to the agent that they intended to develop the property. They were unable to do so. While there was no impediment to development from a town planning perspective, there was a covenant on the title which prevented further development. The covenant that prevented development was not easy to find. While it appeared on the face of the certificate of title, the covenant itself had to be searched and read to find the restrictions.

5. Case Study Two Again while the case is still pending we believe a charge of unsatisfactory conduct is likely to be laid against the agent. SO… In a similar case the tribunal has said; “Any agent should be able to search titles, identify covenants and tell purchasers what the covenant means before marketing a property. The agent has to search the title and fully understand it. If unable to understand the title the agent needs to get advise from someone who does”

6. Case Study Three Complying with technical requirements of the Act An agent provided pricing information to a prospective Vendor. The Vendor responded by giving the agent a recent valuation. Enough information was provided so that the prospective vendor has a reasonable idea of the value range of the property. However the agent did not provide a comparative market analysis (CMA) as required by the code. Even though it was clear that the vendor had sufficient information on value, when the Vendor complained to the REAA they found that failure to provide a CMA was a breach of the code and the agent was found guilty of unsatisfactory conduct. SO… Make sure you complete a CMA with each listing.