MENTAL CAPACITY

With every good intention comes those who will seek to abuse it. The acceptance of mental illness as a real issue is incredibly important. We all have people in our life that has suffered or been affected by a loved one who has a mental illness. The work of Black Dog and Beyond Blue has been so important in this space.

Unfortunately, there are people who abuse the good intention of the community by misusing the mental health card. We at Leverage have seen the emergence in a number of spheres the mental health card used to get out of legitimate contracts. It seems, in some persons mind, to be a get out of gaol free card.

Leverage has a client who purchased two blocks off an old fellow in Queensland. One block was vacant whilst the other had the old fellow’s home on it. To describe it as a house is misleading and deceptive. It was a crumpled old shack, which was termite infested and riddled with asbestos.

The contracts were executed, exchanged and the deposit taken. Negotiations ensued after the sale regarding the old fellow continuing to live in the shack. Our client was concerned about the shack collapsing on the old fellow and said he wouldn’t give him a licence to occupy.

Two days later, the old fellow said he was suffering from a mental illness and did not remember executing the contract. No evidence was provided except a list of drugs.

A contract is void if the person executing the contract does not know what they are signing and the agent knew or ought to have known he did not know what he was signing. Mental illness is not the test, it is whether the person knew what they were doing. In this case, the old fellow definitely knew.

As an agent, if you have any concerns about a persons capacity, always have a witness present at signing. All you have to do is satisfy yourself that the person knows what they are signing. A simple question stating “can you tell me what you are signing” is sufficient.

We don’t believe the story of mental capacity, and thankfully the agent has great notes to assist.

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 or call 1300 438 538