Sometimes we do and say things that appear not to have any relevance and then find out that its vitally important. Leverage had a conveyance this week where an agent had said something innocuous to a prospective purchaser that sent us down a pathway of discovery.

Our clients were looking at a townhouse on the Central Coast. The agent knew that he was dealing with a person who had been appointed by the Guardianship Tribunal. He made two assumptions:

  • Because there was an order by the Guardianship Tribunal, the public trustee was managing the property; and
  • Because the public trustee was involved, the person must be dead.

These assumptions were completely wrong! Yes, there was an order from the Guardianship Tribunal, but it was in favour of the owner’s daughter. In other words, the daughter would execute the contracts for sale and the transfer. Secondly, because there was an appointment by the Guardianship Tribunal, it must mean the person is alive.

Most special conditions for contracts allow a contract to be terminated for death, mental illness etc. This little bit of fact sent us on a pathway to find out what that particular clause would mean to our client if we didn’t know the facts.

The last thing you need is a clause which says that if the vendor dies then they can withdraw from the contract. If they have already passed away, this clause becomes completely irrelevant.

What was most interesting however was that the guardian had been appointed to the vendor. We obviously couldn’t continue with a contract which allowed for withdrawal, because this would allow the vendor to withdraw at any time. Leverage contacted the vendor’s solicitor and had any reference to mental illness removed from the agreement.

Passing on the information lead us to a more secure contract for the purchaser, and ultimately a better contract for the agent. It’s important that your facts are correct.

Whatever you do, it is poor form to kill your client off before they are dead. Moreover, if there is a guardian, an agent’s agency agreement must be executed by the guardian and instructions must only be taken from that person.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au