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  • Agent stuffed up settlement - legal advice please

    Hi everyone,

    We have sold our house on the 11 Sept after the auction with the last bidder in vacant possession and are awaiting for settlement on 12th November.

    On the same day house was sold , whilst we were leaving the auction room, the agent who we have been dealing with and sold the house came to us and said, 'everything is taken care of and the new landlord wishes to take over the tenancies and he is introducing them to the tenants' . When I said that I still would serve the 42 day letter of notice to the tenants, as house is sold at vacant position, he said, no need to do so, as the new landlord wishes to take them over, and better not to confuse the tenants and not to worry that side of things and he ‘d sort it out'.

    We came home and I wrote to the tenant at unit & PM (it was a house and unit and house was managed by a PM, and the unit was managed by us) stating that the house is now sold and the settlement date and further advised that the agent xxx (who sold the house, who they have been liasing with to organize open homes etc) would arrange a meeting with new landlord and tenants to make the transition smooth. I cc this to the agent who sold the house too.

    I wrote/texted to agent and followed up couple times in between if the new landlord and tenant have been met with and all agreed he said, yes the main house is taken care of, and further he emailed/texted, that the new landlord was pretty busy and didn't have time to arrange a meeting with tenant at unit, but will do so soon etc.

    We felt it is not clear and something missing and when contacted the agent last night over the phone he said, that the new landlord may accept the back tenant for increased rent which is in rental appraisal ( as it was tenanted low due to being on market for sale) . Again, he went on his usual story, that he would sort it at his end and no need to worry.

    Its only less than 3 weeks to settlement and our tenant at unit came to us, asking 42 day letter of notice last night and stating that he can’t move in such short notice?

    I was dumb to believe the agent and not to add a line to the letter I sent earlier saying it serves the 42 day letter notice to vacate to tenants, in first place. Or to get the S&P agreement endorsed with the current tenancies and strike off the vacant position and agree on to it with new landlord and us signed. The agent who I think is reasonably new has amounted heavily to this confusion. To date the tenants stay with new landlord/ move out remains ‘unconfirmed’.

    Last night in reply to my mail, after the phone conversation, the agent emailed me that he suggests sending 42 day notice at least now , asap, as the contract is in vacant possession in case if the new landlord doesn’t wish to keep tenants??? Again saying he too is trying to sort things out.

    An extract of the agent’s mail last night

    “I have been liaising with the tenants and the purchaser of xxx Street since the day the contract was signed. However, as the contract was for vacant possession and settlement is on 12th November, it has only been bought to my attention this week that the 42 day notice to vacate has not been received by either tenant from yourselves.

    I have verbally sorted out the continuation of the tenancy at 1/xx xxx Street, , but the continuation of the tenancy at 2/xx xxx Street Ave is still unknown. I will be continuing my efforts to sort an agreement for the purchaser to continue the tenancy with xxxx of 2xx xxx Street. But as it is not my authority, I do recommend that tomorrow you hand deliver a 42 day notice to vacate to xxxx at 2/xxx Street, just incase the purchaser decides to stick with the vacant possession that he is entitled to and to limit any potential liability from your part.

    So leave the sorting out of a meeting or agreement between the purchaser and xxxx 2/xx xxx Street to me, and I will keep you updated with the outcome of the meeting, with a smooth transition to hopefully follow. “

    We shouldn’t have let this happened and gone out of the way to accommodate the new landlords interests and agents request and now we have been dumped into enormous problems and stresses and losses.

    We have to leave NZ to attend to a family wedding and tickets have been bought and leave on 29th November and are out of country till mid January.

    We need knowing what our path is asap.

    Thank you so much in advance

  • #2
    You'll need some proper legal advice here but if it were me, I would walk into the agency with murder in my eyes and discuss their liability with the manager. Don't waste your time with the agent. You have evidence in the form of txts and emails and it's in their interests to get it sorted.
    You can find me at: Energise Web Design

    Comment


    • #3
      We need knowing what our path is asap.
      Yesssss... is there possibly a communication problem going on here? Is english your second language?

      Not trying to be rude, but what you've said above doesn't make sense. Firstly you say the agent has said they would issue a 42 day notice(s), then goes on to say
      as the contract was for vacant possession and settlement is on 12th November, it has only been bought to my attention this week that the 42 day notice to vacate has not been received by either tenant from yourselves.
      So his/her understanding seems to have been that you were going to issue the notice(s).

      Not sure why you would sell a property with 'vacant possession' stated, when tenants are still in occupation. Is this standard practice?
      Squadly dinky do!

      Comment


      • #4
        Originally posted by Davo36 View Post
        Not sure why you would sell a property with 'vacant possession' stated, when tenants are still in occupation. Is this standard practice?
        It can be if there is an agreement to continue the tenancy. It's more to cover backsides. I've bought a house using vacant possession but then re-signed the tenants on my own terms.
        You can find me at: Energise Web Design

        Comment


        • #5
          Originally posted by Davo36 View Post
          Yesssss... is there possibly a communication problem going on here? Is english your second language?

          Not trying to be rude, but what you've said above doesn't make sense. Firstly you say the agent has said they would issue a 42 day notice(s), then goes on to say


          So his/her understanding seems to have been that you were going to issue the notice(s).

          Not sure why you would sell a property with 'vacant possession' stated, when tenants are still in occupation. Is this standard practice?

          I think the agent's position changed -
          When I said that I still would serve the 42 day letter of notice to the tenants, as house is sold at vacant position, he said, no need to do so, as the new landlord wishes to take them over, and better not to confuse the tenants and not to worry that side of things and he ‘d sort it out'.
          Selling with vacant possession means just that - you should have issued the 42 day notice REGARDLESS of whether the new owner intended to take over the tenancies or not - I guess you know that now, but stating it clearly may help the next person.

          Sounds like you need to clearly establish what the new owner's position is and if it is that they want the tenant out, negotiate some compensation with the tenant for the short notice and get the agency to pay/contribute to that and hope that the tenant doesn't decide to also go to the tribunal.
          DFTBA

          Comment


          • #6
            If the agent said to you the new owner wanted to take over the tenancy rather than requiring vacant possession, and that is in fact true, then you ought to have a good case for requiring the purchaser to settle with the tenancy in place, because you have only kept the tenant in place at the purchaser's request....if you can prove who said what.

            If the agent denies telling you this, or the puchaser denies telling the agent, then there is a problem, which boils down to who has the best evidence. The purchaser has a contract saying vacant possession, and that is the basic starting position. You have to trump that with, for example, a text from purchaser to agent saying they will keep the purchaser and the agent being willing to testify to that effect.

            Personally I would talk to the agent reminding them in no uncertain terms of what they said after the auction, and asking them what they are going to do to fix it. If they won't help or deny they ever said anything, you will need to discuss your position and your chances with your lawyer on the conveyancing. You might be right, but find yourself unable to prove that you are right, and you would then have little option but to issue a 42 day notice asap.

            It could all have been avoided by getting something in writing between your lawyer and theirs, just an email would do, confirming whether they wanted the tenant to remain, or not.

            Comment


            • #7
              PS I do agree you need the purchaser's position sorted straight away...but talk to the agent first about the purchaser's position, reminding the agent about what they said on the auction, as asking the purchaser directly would be an invitation for them to change their mind.

              Comment


              • #8
                yip - try to transfer the responsibility and worry, try to make it their problem.

                Comment


                • #9
                  Thank you heaps for your input.

                  I wrote to the agent, over the week end the following

                  Hi xxx

                  We are extremely disappointed to hear the direction of the matter now progressing.


                  You volunteered (and/or at new owners request) you took the responsibility to transfer the tenancy from us to new owners at settlement, when/after the house was sold in vacant possession and it is clear and did not matter us at all, and we had enough time left to give tenants notice to vacate, should not you taken this step of responsibility away from us.



                  You possibly are still only a year young real estate agent and needing more hands on real estate exposure and which is why from the beginning, we asked you to buddy with another agent and even suggested some experienced market go getters to liaise with and this was over looked/turned down by you/your manager and now this leads to load of mess.


                  You still do not have yet ONE SINGLE ANSWER ,clarified, since xx/9 for over one and half months, simply if the new owner wants to have tenants of both house and/or unit or not, after all.

                  I am afraid, you as our agent have not looked after our interests nor our tenants basic needs instead have messed the whole process up.

                  We have trusted you ,and went out of the way and agreed to accommodate your request to assist the new owner's interests and your request you to allow current tenancy transferred to new owner/landlord, and now ( in your last night email) you are trying to dump us into enormous problems/stresses and losses.


                  When the house was sold on xx/9, just before leaving the auction room, xxx, asked you if anything else xxxx has to do. And you said, one thing , that the new landlords wish to continue with tenants, and then I told you that as the S&P is in vacant possession, I still would send the 42 day notice to tenants , and you said, that you are organizing a meeting with new landlord to take over the tenancy at the settlement and there is no need to send a letter to terminate the tenancy and it may confuse tenants and you would sort those out at your end.

                  These are your words you used, and we trusted your words, and following those your actions towards this.

                  We could have endorsed this to the S&P agreement, however, you talking with such confidence, we continued to believe that you are trustworthy and responsible and left you to follow those up.
                  We are landlords for almost couple decades and are fully aware that we must give 42 days notice in a such an instance when the house is sold in vacant possession and never thought you would mess this up to this state.

                  On xxxh September, I wrote to both back tenant and the PM of front house and ccto you too, stating that the house is sold and advised the settlement date and also endorsed your name details stating clearly that you would get new landlord to come and meet to discuss the transfer of tenancy.



                  Again , as no updates from you, as to if the new landlord has already discussed the merge with current tenants, I wrote to you , a week later , on xxth September asking if new landlord and tenants are met as there still has been ample time for us to send off 42 day letter to tenants to vacate should it still be needed.


                  You did not respond to the mail instead, you have texted me after 2 x days, that the new owner has already met with the front tenant and but has not had time to meet with the tenant in back unit.

                  When I rang you again on xxrd October to clarify, you said, that you are " right on to it" and gave clear impression that the tenancies are now sorted and not to worry and I asked you to send it in writing, and we were happy as there is nothing to worry.


                  We felt it is still not clear as nothing is formally agreed and sent to us in writing , and felt something is dier lacking and when I contacted you last night over the phone, you said, this time, a different story ( which you never emailed or told us as an update) that the new landlord may accept the back tenant for increased rent which is in rental appraisal. I was so upset . Should we be known this ahead, we would have taken actions then and there, and would have had time to send 42 day notice to our tenants. Clearly you have not taken timely actions in professional manner to communicate those with us to take actions, let alone to protect our interests nor our tenants needs. When I expressed that we were not aware of those , again you went on with your usual phrase, that you would sort something out and no need to worry.

                  The tenant at the back unit has got in touch with us and asked his position and advised that he is unable to find elsewhere in such a short notice, Then only we realized that you have not kept to your promise. Even, when I rang last night, as you always do, went on saying that you will be meeting new owner soon,, 'I'll sort it at my end, and leave it to me', but these words are very vague.

                  And I wrote to you to reiterate the position and even the letter you sent last night in reply to my mail states 'leave it to sort out' but, this time you present more doubtful remark and ask me NOW to send 42 day letter, when there is no enough time!!!




                  We leave NZ on xxx mber, to attend to a family reunion event, and tickets are bought and we are out of country till mid/late January 2014.


                  To date you have not answered to THE MOST IMPORTANT question, after WEEKS/month the property is sold, ie if/when the tenants are taken over by the new owner and a feasible plan of action to move forward

                  xxxx this needs resolved. We want to believe you and your company is a responsible professional body and must take accountability to its agents words/actions.


                  Suggest what/how you would resolve the mess and come up with concrete plan of actions, in writing, by 4pm tomorrow, Sunday, 27 October and time is ticking.




                  If it comes to worse and you/your manager do not suggest a workable plan / compensate tenants stay / move out and enable settlement on the date agreed, the house may not be sold/settled on the day, and we will lose the sale, at your/ xxxxxs cost and we will not be left with any options other than escalating to the next level up. "


                  I left a voice mail message as well as couple text and an email every evening and there wasn't any reply/acknowledgement.

                  So, I emailed and texted him this morning , saying that shouldn't I hear back from him, that we would escalate this to his manager and then to our solicitor or REINZ and heard from him finally this moring with an excuse that he was awy with his daughters.

                  He didn't respond to any of my emails, instead said he was only 'liaising' with purchaser to transfer tenancy but 42 days letter still could have sent by me?? I brought him back to the conversation we had had before leaving auction room and how he convinced me that it is not needed to send 42 days letter to the tenants, then he continued saying that the new owner may want to have them , I was running out of patience, but tried to be calm, and luckily had someone at the door and had to hang up and asked him to response to my email, ratehr.

                  Instead he has sent a text saying owner's agent may see the the front tenant etc etc plus another recent text too was sent which I couldn't open and when I asked hime to email me, I just recieved this email from him.

                  Hixxxx, just another update. The new owner said that he is happy to keep XYZ on following the last conversation that he had with him a few days ago. He said his property manager is in a court hearing for 2 days and will sign the new tenancy agreement with XYZ after then. The same with PQR ( back tenant ) , that is if PQR doesn't find another property to move into before then as he has been looking and I have also sent him a list of available rental options to further assist.
                  Kindest regards,
                  xxxx"

                  It still is not clear, I told him in my last night email as well as in my text this morning that I have scheduled a meeting this evening to meet tenants and need a concrete answer. Do you see where this is heading?

                  What's my pathway?

                  Much appreciated

                  Anita S

                  Comment


                  • #10
                    Sounds like you knew he was a real rooky - why did you sign up with him?
                    You pay the same money for the best and worst.

                    Comment


                    • #11
                      Very long few days passed, a quick update though

                      As there's no any indication of where we are I sent an email to agent's manager giving him the opportunity to resolve.
                      "Hello xxxxxx


                      I already have sent you a text as unable to get hold of you on phone to discuss this matter.



                      xxxx has sold our house at xx xxxxx and settlement is only few weeks away on xxth November.



                      House was sold after the auction on the day of the auction, at vacant possession.


                      Before leaving the auction room, the same day the house was sold, the agent, xxx came to us and said, that the new owner is taking over the tenancies and xxxx is arranging a meeting with tenants. I interrupted him and said, that I would still send the 42 day letter to tenants to vacate, as the S&P is at vacant position, xxxx said, it will only confuse the tenants, and no need to do so and he is dealing with it and he is taking new owner to meet with the tenants to take over the tenancy. Thus a variation to contract hasn't been endorsed, however, he was so confident and we trusted him and he said that he would liaise with new owner to transfer the tenancy and would sort those out at his end and no need to worry.


                      Here follows SOME email communications and I have several other emails texts that affirms that he has been liaising with new owner and his property manager too to take over the tenancy .


                      Clearly, the agent, xxxx's words actions were to inherent the tenancies to the new owner/purchaser . However, it has been over 4-5 weeks and it is going no where with no clear direction and this is giving you, as the manager of xxxx xxxxt to fix this up within in house dispute resolution process.


                      You are a professional body, and we employed you as an agency and trusted your agents would work with integrity and take responsibility and accountability for their actions.


                      xxxx has not responded to any of my emails since last Friday 25th October, despite many texts/voice mail messages left,


                      And this is giving you, as the Manager of xxxx the opportunity to resolve this issue. Hope you would be able to work a reasonable solution in house .


                      Should I not hear back from you with a reasonable solution by 4pm , Thursday 31st October 2013 I shall escalate this to REAA and to our solicitor and if any costs for legal protocols will be added to your agency. And will make aware the other social medias of the quality of service and professionalism we receiv/ed from xxxx/xxxx.


                      Regards


                      xxxx xxxx
                      Ph/Fax 0xxxx
                      Mobile 0xx xxxx "


                      The manger too has not responded to my email, instead talked to me over the phone to persuade me that I am at fault.

                      Our solicitor has written to buyer's solicitor that the settlment is with tenancy,as the owner indicated to continue wtih tenancy (thanks Ivan!) and initially buyer's solicitor has acknowledged, however, later he has checked with the buyer ,and the buyer has responded to the email from his work stating that he(the buyer) would only accept the tenancies only if it is at the so and so price (at incresed rent) for both house and unit. In reply to that , our solicitor wrote them ", Your client is welcome to deal with the tenants in any way he chooses after settlement .However, having elected to take them on he cannot now demand changes to the tenancy when the date for giving notice to the tenants has passed. Tenants have a right to appropriate notice and to obtain alternative accommodation with sufficient. ".

                      Just got to know that the purchaser and his wife, both are prominent investors in commercial and residential and more importantly LICENCED REAL ESTATE AGENTS in the local area and, in fact the man is the PRINCIPAL OWER of one of the main stream real estate (residential sales ) agenices in Auckland.

                      A terrible dealing, how much sleepless evenings this brought us and it pulled down our energy and we missed many good deals that we would have otherwise secured.

                      We have been mislead/misrepesented?

                      Time for your comments /suggestions/thoughts/tips and where to move from here?

                      AnitaS
                      Last edited by Anita; 31-10-2013, 08:22 AM.

                      Comment


                      • #12
                        This looks like a case of mis-communication by one or more parties and I don't think the fact that the purchaser are prominent investors or REA makes a differance - I doubt they set out to create this situation.

                        Seems like your lawyer is dealing with it and you need to let it run its course.
                        As for the deals you may or may not have had - conjecture. Forget about it - you decide if you want to get depressed by this.
                        Just decide not to and look for the positives. Learn from it and move on emotionally.

                        Comment


                        • #13
                          134Contracts for acquisition by licensee or related person may be cancelled

                          • (1)No licensee may, without the consent of the client for whom he or she carries out real estate agency work in respect of a transaction, directly or indirectly, whether by himself or herself or through any partner, sub-agent, or nominee, acquire the land or business to which the transaction relates or any legal or beneficial interest in that land or business.

                            (2)No licensee may, without the consent of the client, carry out or continue to carry out any agency work in respect of a transaction if the licensee knows or should know that the transaction will, or is likely to, result in a person related to the licensee acquiring the land or business to which the transaction relates or any legal or beneficial interest in that land or business.

                            (3)The client’s consent is effective only if—
                            • (a)given in the prescribed form; and

                            • (b)the client is provided with a valuation in accordance with section 135.


                            (4)The client may cancel any contract—
                            • (a)made in contravention of subsection (1); or

                            • (b)brought about by agency work carried out in contravention of subsection (2).


                            (5)No commission is payable in respect of any contract of the kind described in subsection (4), regardless of whether the client cancels the contract.

                            (6)The client may recover any commission paid in respect of any contract of the kind described in subsection (4) as a debt.

                            (7)For the purposes of this section, a person who is the client of an agent in respect of a transaction is also the client of any branch manager or salesperson whose work enables the agent to carry out real estate agency work for that client.

                            (This section and section 135 have effect despite any provision to the contrary in any agreement.



                          no commission no valuation no deal!!


                          135Client to be provided with valuation

                          • (1)For the purposes of section 134(3), the licensee must give the client a valuation made at the licensee’s expense.

                            (2)The valuation must have been made by—
                            • (a)an independent registered valuer; or

                            • (b)in the case of a business, by an independent chartered accountant.


                            (3)The licensee must give the client the valuation either—
                            • (a)before seeking the consent of the client; or

                            • (b)with the agreement of the client, within 14 days after obtaining that consent.


                            (4)Every consent given under section 134 without the valuation being supplied to the client in accordance with subsection (3) is ineffective.

                            (5)Any contract to which the client is a party and to which the consent relates is voidable at the option of the client if—
                            • (a)the client gives his or her consent in accordance with subsection (3)(b); and

                            • (b)the valuation, when supplied, is greater than the valuation specified in the prescribed form of consent as the provisional valuation.


                            Compare: 1976 No 9 s 64


                          Last edited by Perry; 05-11-2013, 10:19 PM. Reason: disabled smilies

                          Comment


                          • #14
                            Yes Anita I wondered about that.

                            Do the agents that bought the place know the people selling it?

                            And also, I wonder how those provisions can be practically put in place when the property is being sold by auction...
                            Squadly dinky do!

                            Comment


                            • #15
                              Originally posted by Anita View Post
                              Hi everyone,

                              We have sold our house on the 11 Sept after the auction with the last bidder in vacant possession and are awaiting for settlement on 12th November.

                              On the same day house was sold , whilst we were leaving the auction room, the agent who we have been dealing with and sold the house came to us and said, 'everything is taken care of and the new landlord wishes to take over the tenancies and he is introducing them to the tenants' . When I said that I still would serve the 42 day letter of notice to the tenants, as house is sold at vacant position, he said, no need to do so, as the new landlord wishes to take them over, and better not to confuse the tenants and not to worry that side of things and he ‘d sort it out'.

                              We came home and I wrote to the tenant at unit & PM (it was a house and unit and house was managed by a PM, and the unit was managed by us) stating that the house is now sold and the settlement date and further advised that the agent xxx (who sold the house, who they have been liasing with to organize open homes etc) would arrange a meeting with new landlord and tenants to make the transition smooth. I cc this to the agent who sold the house too.

                              I wrote/texted to agent and followed up couple times in between if the new landlord and tenant have been met with and all agreed he said, yes the main house is taken care of, and further he emailed/texted, that the new landlord was pretty busy and didn't have time to arrange a meeting with tenant at unit, but will do so soon etc.

                              We felt it is not clear and something missing and when contacted the agent last night over the phone he said, that the new landlord may accept the back tenant for increased rent which is in rental appraisal ( as it was tenanted low due to being on market for sale) . Again, he went on his usual story, that he would sort it at his end and no need to worry.

                              Its only less than 3 weeks to settlement and our tenant at unit came to us, asking 42 day letter of notice last night and stating that he can’t move in such short notice?

                              I was dumb to believe the agent and not to add a line to the letter I sent earlier saying it serves the 42 day letter notice to vacate to tenants, in first place. Or to get the S&P agreement endorsed with the current tenancies and strike off the vacant position and agree on to it with new landlord and us signed. The agent who I think is reasonably new has amounted heavily to this confusion. To date the tenants stay with new landlord/ move out remains ‘unconfirmed’.

                              Last night in reply to my mail, after the phone conversation, the agent emailed me that he suggests sending 42 day notice at least now , asap, as the contract is in vacant possession in case if the new landlord doesn’t wish to keep tenants??? Again saying he too is trying to sort things out.

                              An extract of the agent’s mail last night

                              “I have been liaising with the tenants and the purchaser of xxx Street since the day the contract was signed. However, as the contract was for vacant possession and settlement is on 12th November, it has only been bought to my attention this week that the 42 day notice to vacate has not been received by either tenant from yourselves.

                              I have verbally sorted out the continuation of the tenancy at 1/xx xxx Street, , but the continuation of the tenancy at 2/xx xxx Street Ave is still unknown. I will be continuing my efforts to sort an agreement for the purchaser to continue the tenancy with xxxx of 2xx xxx Street. But as it is not my authority, I do recommend that tomorrow you hand deliver a 42 day notice to vacate to xxxx at 2/xxx Street, just incase the purchaser decides to stick with the vacant possession that he is entitled to and to limit any potential liability from your part.

                              So leave the sorting out of a meeting or agreement between the purchaser and xxxx 2/xx xxx Street to me, and I will keep you updated with the outcome of the meeting, with a smooth transition to hopefully follow. “

                              We shouldn’t have let this happened and gone out of the way to accommodate the new landlords interests and agents request and now we have been dumped into enormous problems and stresses and losses.

                              We have to leave NZ to attend to a family wedding and tickets have been bought and leave on 29th November and are out of country till mid January.

                              We need knowing what our path is asap.

                              Thank you so much in advance

                              Get your lawyers advice, once the property is sold, the agent's job is pretty much finished, and the lawyers should be sorting this out.

                              Give all the communications between you and the agent to your lawyer.

                              Comment

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