People buying homes and properties are being reminded that real estate agents cannot keep deposits when a sale falls through due to circumstances beyond the buyer’s control, after a Suva agency refused to refund a consumer’s $10,000 property deposit.
The consumer had paid the $10,000 deposit under an Offer of Purchase managed by the agency, however, the sale did not proceed after the vendor withdrew the property from the market.
The Consumer Council of Fiji has referred the agency to the Real Estate Agents Licensing Board and requested an investigation into possible breaches of the Real Estate Agents Act 2006.
The agency then refused to return the money, saying the payment was a non-refundable deposit.
Council CEO Seema Shandil says a real estate agency cannot rely on a non-refundable clause when a transaction falls through because of a vendor default.
Shandil says money paid towards a property purchase remains trust money and real estate agents cannot arbitrarily keep a buyer’s deposit as forfeiture or unearned income when a transaction does not proceed.
She says when a vendor withdraws from a transaction, the buyer is legally and morally entitled to a full refund.
She says under Section 54 of the Real Estate Agents Act 2006, an agent must pay money received in connection with a transaction to the person lawfully entitled to it or deal with the money according to that person’s written directions.
If there is genuine uncertainty over who is entitled to the money, it must remain in the agent’s trust account while reasonable steps are taken to determine entitlement.
The Consumer Council says holding buyers’ money in trust is a strict regulatory responsibility and not a discretionary practice.
It is urging people to conduct due diligence and carefully read all terms before signing property agreements.
The Council says buyers should also understand their right to a full refund when a transaction falls through through no fault of their own, including when a bank rejects financing for the purchase.
Consumers seeking advice before dealing with a real estate agent or facing similar property deposit issues can contact the Consumer Council of Fiji on toll-free 155 or email complaints@consumersfiji.org.
