Agent Obligation - Family members buys property your are selling

Discussion in 'The Buying & Selling Process' started by JLin88, 20th Aug, 2016.

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  1. JLin88

    JLin88 Member

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    Hi Guys,

    My apologies if this is not in the right thread category but I am currently getting my real estate license and there is an interesting case study which I would love to get your opinion:

    You are are real estate agent representing a seller for a property. You tell your son about the property and he shows interest and wants to make an offer.

    Is there a conflict of interest in this case? What will you need to do - disclose the relationship to the Principal? Is there an obligation that a sales agent need to undertake?

    Thanks.

    JL.
     
    JLin88, 20th Aug, 2016
    #1
  2. legallyblonde

    legallyblonde Well-Known Member

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    Def need to disclose to principal and the seller... it will be interesting to see what everyone thinks.
     
    legallyblonde, 20th Aug, 2016
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  3. D.T.

    D.T. Specialist Property Manager Business Member

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    Refer section 24 of the Land and Business Sale and Conveyancing Act in SA. All states have an equivalent.
     
    D.T., 20th Aug, 2016
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Yes a conflict of interest which needs to be disclosed.
     
    Terry_w, 20th Aug, 2016
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  5. D.T.

    D.T. Specialist Property Manager Business Member

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    In SA, disclosing it is not enough. Need approval from commissioner as well.
     
    D.T., 20th Aug, 2016
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  6. wylie

    wylie Moderator Staff Member

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    We once put a contract on (Qld) that my mother was selling. We had to write a contract for one figure, with a separate clause detailing the commission being a separate figure, disclosing the relationship. This was more than 15 years ago so the rules may have changed, but we definitely had to lay our cards on the table.
     
    wylie, 20th Aug, 2016
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  7. Cactus

    Cactus Well-Known Member

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    Breach of Cl55 in Vic I think from memory.
     
    Cactus, 20th Aug, 2016
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  8. MrFox

    MrFox Well-Known Member

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    You can not sell a property your company has been engaged to sell to a direct relative with out going through S55. You have to get your principal to agree to your son buying the property in writing. The vendor has to agree to sell the property and pay commission (they don't have to pay). Than you have to do a sworn valuation at your sons expense and from memory the vendor has a cooling off until settlement. Read this link but in reality thats how its done.
    ESTATE AGENTS ACT 1980 - SECT 55 Restriction on agent purchasing property
     
    MrFox, 21st Aug, 2016
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  9. Ed Barton

    Ed Barton Well-Known Member

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    For full marks say that you will charge the vendor commission and also your son. Bonus marks if you search the sofas for any small change.
     
    Ed Barton, 21st Aug, 2016
    #9
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