THE VICTORIAN PROPERTY FUND: MITIGATING THE RISK OF DEALING WITH FRAUDULENT REAL ESTATE AGENTS AND CONVEYANCERS
Consider the following scenario: You have entered into a contract to purchase an off the plan property. The papers are signed, the deposit is paid and your bank is ready and on standby. However, before settlement can occur the developer becomes insolvent, the project is abandoned and your contract is terminated. To add insult to injury, the real estate agent who was holding your deposit of $35,000 disappears overseas and there seems to be no way to salvage the situation. Or is there?
If you have suffered monetary loss as a result of the fraudulent behaviour of a licensed real estate agent or conveyancer, it may be that initiating legal proceedings against the offender is by itself a less than satisfactory course of action. For instance, the offender may be insolvent and lack the funds from which you can make a claim for recovery, or the offender may have fled overseas, thereby making prosecution prohibitively difficult and expensive. In such circumstances, perhaps you can consider making a claim from the Victorian Property Fund.
The Victorian Property Fund
The Victorian Property Fund is a trust fund established under the Estates Agents Act 1980 (Vic) and administered by the Estate Agents Resolution Service, a department of Consumer Affairs Victoria (“CAV”).
An individual or a corporation that suffers monetary loss because of defalcation by a licensed estate agent, a licensed conveyancer, or by any of their employees, in the course of carrying on a real estate business is able to make a claim for the full amount of the loss against the fund. Defalcation is defined by the Estates Agent Act as “theft, embezzlement, failure to account, fraudulent misappropriation or other act punishable by imprisonment of or in relation to money or other property”.
There is no time limit for making a claim against an estate agent, and a 10-year time limit for making a claim against a conveyancer. However, a claim cannot be made for non-financial loss or for a loss arising from the estate agent or conveyancer simply acting unprofessionally or giving bad advice.
Where does the money come from?
When a property is purchased in Victoria, a deposit is paid. The deposit goes into a special trust account, usually managed by the real estate agency facilitating the transaction. Since the timeframe between execution of contracts and settlements generally range between 60 days and 90 days, these special trust accounts can accrue significant amounts of interest. The interest on agent’s trust accounts are paid into the Victorian Property Fund.
Making a claim with the fund
Berrigan Doube Lawyers is experienced in property law and help clients to resolve complex property and related disputes. We are also experienced in preparing applications to the Victorian Property Fund on behalf of our clients. Our clients engage us because we are able to an initial assessment as towhether individuals have a reasonable basis to make a claim, and to assist our clientsin lodging their applicationssuch that they maximize their chances of successfully claiming against the fund.
Furthermore, in the event that the decision handed down proves unsatisfactory, we are able to assist clients to appeal the decision to the Victorian Civil and Administrative Tribunal.