OFT: industry under cloud of misunderstanding

Published: 16 March 2007.

Due to a lack of clarification by the OFT in respect to when to apply the new legislation for presentation of sales contracts to Buyers, the whole industry is now under a cloud of misunderstanding.

As the revised legislation has only recently been published, we have not been able to analyse the full intent of the legislation until now. Thanks to feedback from Roland Taylor at Statewide Conveyancing in Mackay we now have a clearer understanding.

The legislation actually requires that the FULL PRESENTATION PROCEDURE be implemented on TWO OCCASIONS to the Buyer:

* Firstly, before the Buyer signs the 'proposed relevant contract', AND
* Secondly, after the Seller has signed and you present a copy of the 'relevant contract' to the Buyer (Or the Buyer's Solicitor on the Buyer's behalf)

This means that when giving the Buyer (or the Buyer's Solicitor) a copy of the relevant contract in order to make the contract binding, you MUST follow exactly the same process of presenting the Contract, which includes re-presenting the Cover Page, Warning Statement & BCCM 14 in the correct order and attachment method as outlined in the Act for the method of presentation used.

The reasoning behind this extra process is that this is the time that the Cooling-off Period commences and as such is another opportunity to direct the Buyer to seek legal advice.

Exactly how much warning should you have to give a Buyer? Next they will have you escorting them to their solicitor, hand-cuffing them to a chair and forcing them to 'talk' in order to earn your commission. You may even be forced to pay the solicitor's fees for them.

The fact is that the majority of lawyers in Qld don't even understand the Act. How on earth are you supposed to? And, why should you have to jump through hoops of fire in the Qld Real Estate Legal System Circus to provide a warning that realistically no one takes any notice of anyway?

In my opinion, a regulated Sales Contract is the answer. The contract itself should contain all required warnings and words of advice to the Buyer. Legislation would outline exactly how and where such warnings should appear, including font size and positioning. It would be so much simpler and far more sensible. It is not your job to 'pressure' Buyers to seek legal advice. They should already have the common sense to do so.

There are many other problems with the current Act that should also be addressed, too numerous to mention here.

I suggest that it is time to collectively demand a sensible overhaul of the PAMD Act. It is up to you! Email the Honourable Member Mrs Margaret Keech, Minister for Fair Trading, and voice your concerns now. Her email address is:
tourism@ministerial.qld.gov.au

Alan Liddle
(Managing Director - ADL Software)

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