Re/Max refunds disputed deposit to Durban buyer
The Durban widow who not only lost the house she had contracted to buy when the seller pulled out of the deal but was also made to pay the R92 000 estate agent's commission was refunded after Business Times Money reported on the matter last week.
Re/Max is also considering taking action against the franchisee. And the offending clause in the Re/Max Bluff franchise's sale agreement has been removed.
Mirinda Ellis had paid the purchase price of R950000 for a house on Durban's Bluff to the conveyancing attorneys used by that Re/Max franchise, pending transfer.
But she later learnt that she wouldn't receive a full refund when the seller cancelled the sale - R92 055 would be paid to the agent as commission. When she protested, she was pointed to a clause in the sale agreement that read: "In the event of the purchaser having paid a deposit to the conveyancers ... and provided all suspensive conditions contained in this agreement have been fulfilled, the purchaser and the seller agree that the conveyancer is authorised ... to pay Re/Max Advance their sales commission, plus VAT, from the deposit."
Independent legal advice
Re/Max Southern Africa CEO Adrian Goslett initially said that he was sorry for the loss Ellis had suffered, and "it is the seller that has not fulfilled their obligation to the agreement and should be sued for delivery". He undertook to seek advice on revising the contract in question.
After publication of the article, Goslett said he had sought the advice of four independent attorneys. "They agree it is unfair to expect the purchaser to pay for the seller's default and that the claim should be laid against the seller. I advised the franchise owner to refund the purchaser ... and pursue remedy against the seller," he said.
By Tuesday Ellis had her money back.
Goslett said he would tell franchisees to remove the offending clause if it featured in their sales agreements.
"And we are considering appropriate remedial action against that franchisee. This is not what we expect from our franchisees and is not the standard we prescribe. We do more than 1 500 home sales per month through the group and I have not seen a clause like this in any of our contracts."
Goslett said he'd been advised by an attorney that it was near impossible to list all of the clauses that should not be included in a contract.
"Having said that, the exclusion of this clause in any Re/Max contract will be expressly stated to everyone in our network."
As for how the offending clause came to be in the Re/Max Bluff contract, Goslett said the owner had told him that he had acted on the advice of his attorney, and that he "did not intend to cause harm to the purchaser".
"This Re/Max office has been in operation for more than 10 years with an impeccable record and I cannot recall any issue of this or similar nature in the past," he said.
"I certainly hope not to have a repeat of this in the future, which is why it will be turned into a learning experience for our franchise owners and agents."