The extent of an agent’s duty to his client seller in relation to the sale of a home in Tarragindi Brisbane was the subject of a Queensland court decision in June.

The parties signed a contract on 17 June 2008 for $795,000 and a deposit of $20,000 was paid. It provided for a 14 day finance period and settlement in 30 days.

On 23 June 2008 the buyer sent a fax to the agent terminating the contract under the PAMDA cooling off provisions. The agent did not reveal this to the seller.

When the buyer did not proceed with the purchase, the seller – assuming that the contract was unconditional – believed that the purchaser had defaulted and briefed lawyers to sue him for the $20,000 deposit held in the agent’s trust account.

The agent still did not tell the seller about the cooling-off notice, saying somewhat illogically, that the seller should forfeit the deposit because they had not notified regarding finance.

When the cooling-off termination was finally revealed in the course of the seller’s debt collection proceedings against the buyer, the proceedings were terminated but not before the seller had incurred more than $12,000 in legal costs.

It was not disputed that there was an implied condition in the arrangement between the seller and the agent that the agent would at all material times act in the best interests of the seller and exercise due care and skill.

Peter Carter – Conveyancing & Leasing Partner

The court ruled that the seller only pursued the buyer for recovery of the deposit because of his mistaken belief that the buyer was in default. Had the agent notified him of the cancellation under the cooling-off provisions, this would not have occurred.

Accordingly judgment was given for the seller against the agent for all legal costs incurred by the seller in the debt collection proceedings plus seller’s legal costs in the District Court claim against the agent.

* Turcinovic v Curtsen Pty Ltd [2010] QDC 251 (15/06/2010)

This case is important not just in relation to an agent’s duty to communicate to the clients but also in relation to the general duty to act “at all times” in their “best interests”.

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