Failure to verify the legal capacity of parties

An estate agent, who failed to verify the legal capacity of the purchaser and arranged for the vendors to enter into a provisional sale and purchase agreement with a purchaser under 18 years of age, had her licence suspended for two weeks.

The estate agent acted for both the vendors and the purchaser as dual agent in this transaction. Before signing the provisional sale and purchase agreement, the purchaser had nominated her son and her friend to be the nominee purchasers. The purchaser's son was then under 18.

A few days later, the estate agent arranged for the parties to meet together to discuss the purchaser's request to delete the name of the purchaser's friend from the provisional sale and purchase agreement. The vendors agreed to delete the name of the purchaser's friend. As a result, the purchaser's son became the sole nominee purchaser of the property.

Subsequently, despite repeated requests from the vendors' solicitors, the purchaser refused to add an adult nominee purchaser to the formal sale and purchase agreement. Eventually the purchaser rescinded the purchase.

Having carefully considered the evidence and the representations made by the parties at the inquiry hearing, the Disciplinary Committee came to the conclusion that the estate agent did owe a duty of care towards the parties, and that it was an estate agent's duty to take all practical steps to ascertain the legal capacity of parties before letting them enter into a provisional sale and purchase agreement.