ROGUE AGENT IN CARRIBEAN.
ROGUE AGENT ALERT!!
I used to only know about this through hear-say about this particular agent (“Agent”) in Caribbean, today I just met up with one of my friend who recently bought Caribbean and confirmed this first-hand.
This Agent in Caribbean whom she often claims herself as the resident agent. This is what I gathered.
1. Fantastic attitude and service prior to turning in a cheque.
2. My friend saw unit he likes and would like to see the TA, and Option before making an offer.
3. Agent advised my friend that owner will only agree to let him see TA and Option if a cheque is available on hand to indicate there is a genuine interest.
4. Agent confirms the the cheque will be held on trust by her, until my friends sees the TA and Option, and any release of the cheque will only be subject to his satisfactory review of the TA and Option.
5. On the basis of her positive attitude, apparent pro-buyer ethics and Pt. 3 and 4, my friend got comfortable in issuing a cheque and ensured that the Offer to Purchase form has such subjectivities
(a. offer will be subject to the form of TA attached and Option initialed by my friend).
The next thing my friend know, the Agent took the Offer to Purchase and handed over the cheque to the Seller. The understanding is that Seller was advised by the Agent, that they can encash the same immediately with no due regard to the satisfaction of the subjectivities stated in the Offer to Purchase. My friend came to know about this after multiple phonecalls to the Agent and was extremely furious after he knew about this.
While the TA and Option turned out to be fairly standard, but it was a clear deviation of the instructions given to the Agent. When my friend said that if he had not been satisfied with the TA or Option, he would have cancelled the cheque immediately, on ground of non-satisfaction of the terms of the Offer to Purchase.
I understand the Agent attitude changed immediately and advised that my friend could walk away from the deal and lose his 1% if he wants. In any case, given that the seller has already encashed the 1% payment, she is already entitled to 0.5% of the receipts by the seller. Agent further refuted that he will be sue for criminal offences and fraud if he had tried to cancel the cheque. Indeed a dishonoured cheque could be tantamount to a basis of fraud but certainly not in such context!!
The Agent further threatened that she will also take vigorous action on her part to recover the lost commission given him pulling out now/stopping the cheque, her commissions will be affected. She apparently gave a very forceful verbal threat that she will take action against him until the ends of the world, if need be. (at this point of the conversation, my jaws almost dropped when I heard this!!).
My friend likes the unit, the TA and Option money was also ok so he did not let this affect his basis of the purchase and went ahead. What was really annoying is that this Agent is using all sort of reasoning and tactics to threaten her clients, which I think is rather distasteful. More importantly, notwithstanding the specific instructions of her client, she went ahead to issue the cheque without due regard of the risk her client would face (which was already told to her!!) What worse, if the TA and Option had been some can of worms, and my friend is stuck because of her rogue actions in giving out the cheque against the conditions and instructions from my friend, he will be done for!!!
Yes, one can argue that the Agent is in obvious breach of her duty (fiduciary or standard care, that’s a separate discussion) towards her client and she could have been liable to damages, if any arose from her rogue actions. This said, it is a huge hassle and one certainly do not want to have to go to small claims tribunal or district courts (depending on the quantum of claim) for things like this… …. I am not sure about you guys, but its incidents like this that made me extremely wary and skeptical about agents in general.