Beware of Property Scams in 2012

In a year that has seen two major property frauds in Western Australia, the Department of Consumer Protection has amended the Code of Conduct for real estate agents and sales representatives as of the 1^st November to protect property buyers and sellers.

Agents are now required to use “due skill, care and diligence” when listing and selling property. The term “due” has been added to bring the code in line with Australian Consumer Law.

Stuart Cox, Chief Executive Officer of Harcourts Western Australia, suggests that whilst real estate agents are making changes to what they do when listing and selling property, it is pertinent to inform the public of what is now one of the most common scams reported to the police.

According to Mr Cox, several recent ‘inheritance or beneficiary scam’ attempts have been made from supposed property purchasers and sellers.

In one example, a potential buyer contacts an agent looking to purchase a property using a significant inheritance from overseas, but in order for the sale to precede a fee must be paid to cover overseas taxes.

“Caution must prevail if a ‘release fee’ is ever asked for in a property sale,” Mr Cox said.

Another twist on this is an overseas lawyer notifying an unsuspecting buyer of a cash offer on a property on the basis they will receive an inheritance prior to settlement. When the money doesn’t arrive the buyer is faced with legal fees, or alternatively is asked to send money overseas to release the inheritance, which of course never comes, leaving the buyer with a potentially costly legal dispute on their hands.

“Learning from the lesson presented in 2011, be aware in 2012 because as always, if a deal looks too good to be true, it probably is!” cautioned Mr Cox.