The recent NSW Court of Appeal decision in Hyder v McGrath is a timely reminder for real estate agents to avoid losing a hard-earned sale, particularly in the current cooling market. Some agencies place a standard disclaimer in their advertising materials – rightly so because no one wants a claim of misleading and deceptive conduct or misrepresentation against them. In Hyder v McGrath, it was alleged by the purchasers for a $9.4 million house that agents from McGrath made claims about certain exclusive parking rights in a shared driveway, which were later found not to be the case. The purchasers then sought to rescind the contract based on this misrepresentation. The trial judge found that the purchaser was not able to establish any loss suffered from the agent’s misrepresentations, therefore McGrath escaped liability. The purchasers then appealed the decision and it was held at appeal that McGrath did not engage in misleading and deceptive conduct. The reason being they were merely passing on information from the vendor. It was also held that any reasonable purchaser would have obtained legal advice as part of their due diligence when making the purchase. This case shows that it may not be easy to prove misleading and deceiving conduct and establish actual loss suffered as a result. However, it is still a reminder for all stakeholders in a conveyancing process, particularly agents and lawyers, to collaborate together to ensure all information passed on are accurate and all required disclosures have been made. See how non-disclosure can lose a sale. For agents, you could take some precautionary steps when ‘sealing a deal’ without compromising your position. These steps include:

• adopt standard disclaimers in all advertising materials
• avoid responses to purchasers’ queries that are not provided to you or otherwise endorsed by the vendor or another third party
• qualify any representations that you make
• recommend the purchasers seek independent legal advice for the purchase.

In a cooling market, we are seeing more buyers’ remorse and increased attempts by buyers to rescind a contract without losing the deposit. It is more important than ever to ensure all sales are completed “by the book”. For you, this means not losing a hard-earned deal, or even worse, suffer any financial and reputational loss due to any mis-selling. Subscribe to our legal updates