Property Law: Why You Should Never Rely on Verbal Promises
When people think of dramatic areas of law, family law and criminal law usually come to mind. But in reality, property law can be just as intense – and the financial consequences are huge.
At Renee Roumanos Legal, we’ve seen it all: last-minute discoveries, unexpected costs, and clients caught out by what they were told versus what was actually in the contract.
Here’s one story that highlights why you should never rely on verbal promises (or text messages) from a real estate agent.
The Problem: $35,000 Special Levies
Our client purchased a property at auction. Before signing, they asked the real estate agent whether there were any special levies.
The agent replied by text message: “No special levies.”
Reassured, the client went ahead with the purchase.
But when the contract was reviewed, the truth came out:
The contract for sale clearly stated that the buyer could not rely on any information outside the contract.
The property did, in fact, have special levies totalling $35,000.
This left our client in a very difficult position.
What the Law Says About Misrepresentation in Property Contracts
This situation raised important legal questions:
Was the text message an innocent misrepresentation?
Did it amount to misleading and deceptive conduct under the Australian Consumer Law (ACL)?
Could the purchaser rescind the contract in equity?
The law is clear on these issues:
Nadinic v Drinkwater [2017] NSWCA 114 – equity allows rescission where a contract was induced by innocent misrepresentation.
Redgrave v Hurd (1881) 20 Ch D 1 – an innocent misrepresentation is false but made without moral wrongdoing, yet still impacts the decision to contract.
McDonald v Dennys Lascelles (1933) 48 CLR 457 – misrepresentations going to the root of the contract entitle rescission.
Tanwar v Cauchi (2003) 217 CLR 315 – equity will not enforce a contract entered into on the basis of a false representation.
Section 18 ACL – prohibits conduct in trade or commerce that misleads or deceives, whether intentional or not.
The Result: Vendors Paid $35,000
By relying on these principles and negotiating firmly, we achieved a great result for our client:
👉 The vendors paid the special levy of $35,000 in full.
Key Takeaways for Property Buyers
Never rely on verbal promises or text messages from agents. If it’s not in the contract, it doesn’t exist.
Always have the contract reviewed by a lawyer. We can pick up issues before you commit.
Know your rights. Even if you’ve been misled, the law may provide remedies – but it’s always better to avoid the problem in the first place.
Why You Need a Property Lawyer Before You Buy
Buying a property is one of the biggest financial commitments you’ll ever make. The contract is full of technical clauses designed to protect the vendor – not the purchaser. Without the right advice, you could be left paying tens of thousands of dollars for problems you never expected.
At Renee Roumanos Legal, we make sure you understand exactly what you’re signing, and we fight hard to protect your interests if things go wrong.
💡 Thinking about buying or selling property?
Don’t risk it. Book a consultation with our team today and make sure the contract is working for you – not against you.
📩 Contact us now to get started.
