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Case Study 2

Homeseller sued for marketing fees for unsold property

Liza was threatened with legal action unless she paid her agents $2,024 in marketing fees. Her property had not sold.

Liza says the agency quoted her a likely selling price of $330,000 to $340,000 before she signed the agency agreement. Later, however, the agency said the apartment was likely to fetch only $290,000.

Liza says she was told, both orally and in writing, that "no fees would be payable unless the property was sold". Advertising fees were to be deducted from the sale proceeds and were not separate to the selling fees.

The unit failed to sell at the recommended auction or subsequently. The listing agreement expired and Liza received a demand for $2,024.

Liza contacted the HHPF who wrote to the agency on 28 June 2002 to advise "it appears that there has been unethical conduct and also breaches of the Trade Practices Act and Contracts Review Act".

The letter says: "Your agency was aware that the property owner’s first language was Cantonese and that her understanding of English is poor. Your agency failed to ensure that the property owner was able to read and understand the written agreement you encouraged her to sign."

Liza has been given approval to use the HHPF if there is any disputation or litigation from the agency. The agency has been advised that any litigation "will be vigorously defended and appropriate counter-claims for damages initiated". It has been advised that details of their conduct will be forwarded to the Consumer Trade and Tenancy Tribunal and reported also to the ACCC.

There has been no response from the agency, which appears to have dropped the matter.

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