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Legislative Assembly for the ACT: 2003 Week 9 Hansard (28 August) . . Page.. 3379 ..

MS TUCKER (continuing):

a hypothetical example, an agent may convince someone that she should accept a $250,000 offer immediately, before talking to her lawyer.

Another may convince a person that the deal will be lost: "You can't expect to find property in Dickson for this price. Just sign here; you won't be sorry."You may be very sorry when you have to pay a $625 penalty, in this case, to withdraw when your lawyer points out that there are no penalties in the contract for the seller if they fail to settle, or the lawyer points out that the contract is unusual and the property inspector is one who spends less time than others on an inspection, so maybe to be sure you should arrange your own.

The conveyancing process is time critical on several counts. Exchanging contracts is one of the most critical times to be sure, before the buyer is committed and before the seller is committed, that everything is in place. A seller may get a contract prepared by a solicitor and a letter of advice from the solicitor not to sign until the solicitor is there, but the property may have been on the market for a couple of months, the agent needs the money and wants to go to Queensland for a holiday, the seller is being made nervous by the agent's murmurs that maybe the market is falling, it is a rainy day and the agent says, "Quick, agree to this offer, sign them up before they find out about the leaky roof which the inspector didn't pick up in their haste,"the price is less than the seller could have received and, in the haste for the buyer, the solicitor did not have a chance to say that they would double-check on the inspector.

If that cannot be done within the five days, it is too late to pull out. Maybe that is just tough, but here the agent is acting for himself or herself and acting to advise both the seller and the buyer that this is a good deal. Lawyers are not allowed, except in certain circumstances and when certain directions are given, such as by existing clients or family members, to act for both parties in a transaction because that is not seen to be possible. If the agent supervises the exchange of contracts, who decides the settlement date? The agent cannot amend that part of the contract, so presumably a standard period will be written in by the lawyer, say, 30 days.

The agent acting in this role takes away the usual opportunity to adjust the settlement date to suit the buyer and the seller. There are potential penalties if the timing is wrong, but that is not the agent's problem. The agent can only do the exchange if specifically authorised. As I understand it, authorisation can be quite simple-a note on a slip of paper, verbal, or in the fine print of a contract with a real estate agency. These contracts are not usually checked by a seller's solicitor until or unless there is a dispute down the track and then it is too late.

Vacant possession presents another potential trap. Let us say that the proposal is that the contract will be exchanged and the tenant will vacate before settlement and the agent, not being particularly au fait with the tenancy laws, says that the tenant will have to move out once the sale goes through, that the buyer is satisfied that the tenant will vacate in three weeks, which is necessary because the buyer will be needing somewhere to live, but the tenant does not move out because the tenant does not have to or maybe because another agent has not given proper notice, and that the seller becomes liable for substantial damages because of what the agent said would happen and the vacant possession condition. That is just another example of some of the concerns we have.

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