Internet Search Led to “Termination”
OPINION
by Tim O'Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au
Consumer advocate Neil Jenman has long used his website to alert real estate consumers, particularly first time property investors, to real estate scams and scammers. He fearlessly names individuals and companies he believes are acting dishonestly and deceptively. Some property investors, who have dealt to their detriment with those exposed by Mr Jenman, come across his frank revelations only afterwards.
Lucy Young, of Ringwood North, Victoria, was one such trusting soul who, with some nagging doubts, searched the internet after signing to buy an off-the-plan unit in a 44-lot retirement village in a Queensland country town.
When she happened on the Jenman site and read one of his latest Consumer Alerts, Lucy was horrified.
Jenman’s “Guided Tour”, as he called it,described almost exactly Lucy’s own recent property investment experience. Worse, she recognised not only the group of companies supposedly assisting her but also the Victorian solicitor she’d faithfully engaged, on their recommendation, to protect her in this purchase.
Lucy quickly contacted an independent Melbourne law firm to get her out of this dubious, and possibly over-priced, property deal. Because Lucy looked to be legally locked into an interstate contract, those lawyers called Queensland solicitors they knew. A brief account and some of Lucy’s documents were immediately emailed north. The Queensland firm, aware of my reputation as a “contract killer”, promptly phoned me. Would I take on this case?
It had been some 12 months since I’d rescued any “marketeering” victims. Lucy’s story sounded familiar: telemarketed, interviewed, assessed, convinced to secure her retirement, advised on investment strategies and finally stitched up on a negatively-geared, and supposedly wealth-creating property. Only the usual quick trip to Queensland was missing.
So I said, “Sure, send me what you’ve got and I’ll see what I can do.”
After reading the emails, I phoned Lucy’s Melbourne lawyers. I’d give it my best shot, but could make no promises yet. I first needed a detailed statement from Lucy and every piece of paper she had.
Lucy’s statement and a door-stop of material soon arrived. At first glance her prospects did not look rosy. There were lots of disclosures, disclaimers and documents all “signed, sealed and delivered” by an apparently fully-informed and willing Ms Young.
Talk about stitched up! Among other things, Lucy had signed a financial Service Agreement “for the duration of the Client’s natural life”, a Solicitor-Client Agreement whereby she would “indemnify and release the Firm from any liability in relation to this transaction and/or the handling of the conveyancing” and a 26-page contract to purchase her piece of the Sunshine State subject to – wait for it – a “Sunset Clause”. This made Lucy’s contract conditional upon the seller’s registering a survey plan and establishing its Community Title Scheme “on or before a date…three years from the Contract Date (‘the Sunset Date’).”
Much of Lucy’s statement revealed how she’d been sucked in:
- “After going through this booklet I agreed to attend a meeting with their consultant the following Monday (my day off) at 11.00am…I returned home around 6.00pm – tired from a long day with them.”
- “If I sold the property in 10 years’ time, I would gain $130,000.00 nett – a handsome sum for retirement.”
- “I asked if I could go home and return the next day, but I was not allowed. Many excuses were given.”
- “The lawyer went through (the clauses) very quickly then the documents were signed.”
- “I only found out conclusively that it had not been built after I signed the sales contract at the lawyer’s office.”
After a lot of reading, a little research and some quiet reflection, I wrote three letters. One sacked the solicitor and asked for Lucy’s file. Another to the “Lending Services” company canned its life-time contract. A longer “termination” letter went to the seller’s solicitors. This mentioned Jenman’s website and Lucy’s distress over being another “victim of an overpriced property marketeering scheme”. I raised the issue of “misleading, deceptive and unconscionable conduct” and suggested breaches of various consumer protection laws, including the Trade Practices Act.
A week later this one-sentence reply came from the seller’s solicitors: “We refer to your letter to us and advise that our client agrees to termination of the contract.”
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