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TAKE CARE - You must market your property properly

Mana v Fleming – Court of Appeal case law

The plaintiffs, Mana and Jury as trustees of a trust, entered into an agreement to sell a property to the Flemings, the defendants, for $860,000.00. A special clause, making the agreement conditional upon the defendant's entering into an unconditional agreement on terms and conditions acceptable to them for the sale of their property within 90 days from the signing of the agreement, was inserted for the benefit of the defendants.

On the advice of a neighbour, a former real estate agent, the defendants undertook some remedial work to their property and also asked him to use his 'contacts' in the industry to market the house. Discussions took place with a local real estate company about a covert marketing strategy – one without advertisements in papers, photos in the real estate office window, signposts on the property and without organising open homes – due to the potential difficulties this may have caused to the client base of the defendants' lawn mowing business, which would also be sold once their house was sold. No agency agreement was entered into.

The defendants were aware that a nearby property was about to be sold at auction and that the expected sale price would be $2.1 million. They had hoped that the unsuccessful bidders would be directed toward their property although no formal arrangements were ever made. In the meantime the defendants placed two "For Sale" signs on the property lawn but the small amount of interest was unfruitful.

The wife also asked her sister, another former real estate agent, to provide them with her database of former clients and to ask her former colleagues to pass the word around. Again, no interest was forthcoming. The husband's brother made an offer to purchase their property for $1.3 million which was rejected in anticipation of the auction of the nearby property.

They had also advertised their business in a newspaper. After receiving calls from worried clients, the defendants resolved that a covert marketing of the property was necessary to protect the value of the business.

A second real estate company was approached but again not formally contracted. Another offer to purchase their property was made, this time for $1.4 million with $150,000 to be left in on vendor mortgage for 12 months. This offer was also rejected in the hope that the property would sell for more.

The nearby property sold at auction for just $1.5 million to a sole bidder. The defendants lost hope of entering into an agreement satisfactory to them for the sale of their property before the fulfilment date of the agreement they

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