Buyers under 18 can’t sign contracts

2016-12

Estate agents should keep themselves informed of any laws and government regulations relevant to their work in order to be in a position to advise their clients in a responsible manner.

An estate agent acted for both the vendors and purchasers as dual agent in a property transaction. The purchasers were a mother and her son, who was under 18.

A few days after the agent had arranged for the parties to enter into a provisional sale and purchase agreement, the purchasers requested deletion of the mother’s name from the agreement. As the vendor was amicable to the purchasers’ request, the agent then arranged for them to amend the provisional agreement.

As a result, the purchaser’s son became the sole purchaser of the property. However, he was under 18 years old at that time.

Despite repeated requests from the vendor’s solicitors, the purchasers refused to add an adult’s name to the sale and purchase agreement. Eventually, the deal was rescinded.

The EAA Disciplinary Committee was of the view that estate agents ought to know that an agreement may be regarded as invalid if the contracting party was under 18. It was the estate agent’s duty to take all practical steps to ascertain that the contracting parties had full legal capacity for entering into a contract.

To do so, the estate agent should check the identification documents, such as identity cards of the contracting parties before arranging for them to enter into the provisional agreement.

Therefore, the agent was in breach of paragraph 3.2.2 of the Code of Ethics, which states: “Estate agents and salespersons should keep themselves informed of any laws, government regulations, essential facts and developments in the real estate market in order to be in a position to advise their clients in a responsible manner. They should strive to provide services and opinions based on knowledge, training, qualifications and experience in the real estate business.”

Taking into consideration the estate agent had no ill intent in making the mistake, the committee suspended her license for two weeks.

(01 December 2016)