Agent and son acted ‘deceitfully’ over land sale’s $6m bonanza: Real estate bulletin issue 124 (October 2016)
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(The King and I Pty Ltd / Colin King / Paul King)
The following information outlines details of a recent case that Consumer Protection took to the State Administration Tribunal (SAT).
A former York real estate agent and his son have been found to have engaged in misleading conduct after a ‘deceitful’ land deal which resulted in a $6 million profit for family members.
The SAT has upheld allegations by Consumer Protection against former licensees The King and I Pty Ltd, formerly trading as Colin King Real Estate, and its director Colin Maxwell King, as well as his son Paul Anthony King who worked as a real estate sales representative at the agency. Consumer Protection had alleged that each had breached the Code of Conduct for Agents and Sales Representatives 2011 in six rural land deals.
The land deals occurred between 2008 and 2010 and involved the separate sale of six rural lots, with Colin and Paul King acting as selling agents for three of them and introducing the ultimate buyers in each sale. All six lots were first sold to an intermediary company controlled by another of Colin’s sons Michael King who was not a licensed real estate agent or sales representative.
The land lots were then immediately on-sold to Malaysian-based investors at substantially higher prices resulting in a $6 million profit that directly benefited Michael King. The original owners and the Malaysian-based investors were not aware of the on-sale arrangements.
Relating to the three lots which were sold through Colin King Real Estate, the SAT upheld Consumer Protection’s allegations that Colin and Paul King had:
- failed to act in the best interests of the original seller;
- failed to act fairly and honestly in facilitating the on-sale scheme;
- misled or deceived the original sellers;
- failed to disclose material facts to the sellers; and
- acted in the circumstance of a conflict of interest.
Relating to the three lots not sold through Colin King Real Estate, Colin and Paul King were still found to have acted unfairly and dishonestly by facilitating the on-sale scheme.
Colin King had also applied for the SAT to review the decision by the Commissioner for Consumer Protection not to renew his licence in August 2014. That decision was upheld by the SAT agreeing that, due to his misconduct in the on-sale scheme, he was not of good character and not a fit and proper person to hold a licence.
As Colin King and The King and I Pty Ltd were no longer licensees, the SAT did not have jurisdiction to impose a penalty in this case although it found the allegations proved.
The SAT will impose a penalty on Paul King at a later date. Paul King no longer holds a sales representative’s certificate.
Acting Commissioner for Consumer Protection David Hillyard said the on-sale scheme was one of the worst cases of deception perpetrated by a real estate agency in WA.
“Colin King and his two sons Paul and Michael acted deceitfully to manipulate a circumstance where they made massive profits at the expense of land owners who had put their faith in the agency to act in their best interests,” Mr Hillyard said.
“That trust was betrayed in the worst possible way by denying the owners the true profit from the sale of the land. The loss of Colin King’s licence was more than justified as his actions, and those of his sons, were reprehensible by being involved in this illegal on-sale scheme.
“This was deception on a grand scale and reinforces the importance of having a licensing system and codes of conduct for the real estate industry to protect the interests of buyers and sellers of property in WA.”
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