$21,200 penalty after Perth home sold without co-owner's consent: Real estate bulletin issue 165 (December 2017)

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Property industry

First Western Realty / Ligaya Varela

A Joondalup real estate agency and a sales representative will have to pay a total of $21,200 in penalties and costs ordered by the State Administrative Tribunal after a Balga house was sold without the consent of one of the owners.

The owners were a couple who had moved overseas and the agency was duped by the husband into believing that his wife and children were killed by the Taliban in Afghanistan.

Poliwka Group Pty Ltd, trading as First Western Realty, was reprimanded and fined $6,000 and ordered to repay its $10,700 in commission, which will be held in trust until the finalisation of the couple’s Family Court proceedings. The agency must also pay $1,000 in costs. Ligaya Varela, a real estate sales representative employed by the agency, was reprimanded and fined $2,500 and ordered to pay $1,000 in costs.

The agency was contacted by the husband in November 2012 to sell a Balga property owned by both the husband and wife as joint tenants. He signed the listing authority and told Ms Varela that his family had moved back to Afghanistan, that he needed the home sold as soon as possible and he was soon flying back to Afghanistan to join his family.

A $350,000 offer on the home was accepted by the husband. However, the planned settlement of the property in January 2013 did not proceed as the husband sought an additional $10,000 from the buyers and the seller’s settlement agent then withdrew their services. The wife’s identity, authority to sell and acceptance of the offer had still not been verified at this stage.

At the end of January 2013, the husband told Ms Varela that he had returned from Afghanistan to help finalise the sale. About the same time, a friend of the husband called the sales representative to inform her that the husband’s family had been killed by the Taliban.

A document purporting to be the wife’s death certificate, dated February 2013, was supplied in March 2013 and a translation stated that the wife and children were kidnapped and killed by armed Taliban on 15 December 2012. The buyers of the property agreed to extend the settlement date.

Settlement on the property occurred in March 2013 with the husband receiving the entire proceeds from the sale of $34,271, instead of it being split with the co-owner. The agency received $10,700 in commission.

The wife, who was not deceased, returned to Perth in June 2013 to discover that the property had been sold without her knowledge and without signing the listing authority or the contract of sale.

First Western Realty had breached the Real Estate and Business Agents Act by receiving a commission without holding a valid written authority to act. Both the agency and Ms Varela had failed to exercise due skill, care and diligence by acting as an agent and sales representative respectively in circumstances where the verification of identity process had not been completed and the listing authority had not been signed by both registered owners.

Commissioner for Consumer Protection David Hillyard said both the agent and sales representative had attended training about property fraud and verifying the identities of owners, prior to the sale being completed.

“A great deal of effort by the Department has gone into educating the industry over many years about property fraud and the fundamental need for identity and document verification, so there is no excuse for this carelessness,” Mr Hillyard said.

“The lack of due diligence in this case is disappointing and has deprived a property owner of part proceeds of the sale, a totally unacceptable outcome.”

Consumer Protection
Bulletin
Last updated 14 Dec 2017

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