Estate agents must ensure a vendor’s representative has proper authorization to sign the provisional agreement for sale and purchase on a client’s behalf.
If that is lacking they could face disciplinary action by the Estate Agents Authority.
An estate agent who acted for purchasers in a property transaction provided them with a land search of the property the provisional agreement was to be signed.
According to the land search, the property was owned jointly by two people.
Following advice from the agent, the purchasers signed the provisional agreement and paid a deposit to the vendors’ solicitors.
Upon closer scrutiny later, the purchasers realized that one of the vendors signed the agreement in her own capacity as well as on behalf of the other vendor, who was absent.
But there was no document showing she had proper authorization.
The purchasers also noticed that the vendors’ solicitors had not deposited the check for the deposit and that the vendors had not proceeded with the signing of the formal agreement for sale and purchase.
The solicitors then argued that the provisional agreement was ineffective as it was not signed properly by all the vendors.
The purchasers’ agent had not asked the vendors’ agent to produce any authorization from the absentee vendor.
The EAA disciplinary committee was of the view that the estate agent had failed to protect his clients’ interests – and thus failed to comply with the association of code of ethics.
Further compounding the offense was the fact that the estate agent had even advised his clients to pay the deposit to the vendors’ solicitors.
The disciplinary committee ordered that a warning be issued to the agent.