The Price of Not Letting Go

Contributed By: Michael Kleinschmidt Stratum Legal on

Forward bookings belong to the lot owner. Trying to hang on to them can cost more than you think

When you lose a Lot from your Letting Pool don’t be tempted to try to hang on to the forward bookings – you have to act in the best interests of your, soon to be former, client (the lot owner). At the very least, you must ensure that the guests with the forward bookings are aware of the change over in management, so that they can keep their forward booking if they wish. A Noosa Real Estate Agent who failed to do this was recently fined $10,000. In Department of Justice and Attorney – General – Office of Fair Trading v Noosa Resort Management Pty Ltd &Ors (No 2)[2020] QCATA 403 QCAT Member Kanowski fined the Agent Corporation $5,000, and the 2 licensed Directors of the Corporation $2,500 each for:

  1. failing to properly supervise the company’s
    employee;
  2. not ensuring that their trust accounting system
    enabled relevant data to be extracted; and
  3. making false representations relating to the
    letting of property.

The Lot Owner had taken their house out of the Letting Pool. The Letting Agent told 4 prospective guests who had made advance bookings that the house would no longer be available. That was incorrect. The house was available, and the bookings could have been taken over by the new letting agent appointed by the Owner. An employee of the Letting Agent gave the prospective guests details of other properties managed by the Letting Agent that would be available on the same dates. As a result, 2 prospective guests cancelled their bookings, and the Letting Agent refunded their deposits. The other 2 prospective guests switched their bookings to the other properties managed by the Letting Agent. The Letting Agent transferred the deposit monies over to those new bookings.

The Tribunal accepted that the licensed Directors did not know of, or encourage, the employee of the Letting Agent to act in the way that they did. The Tribunal also accepted that the unlawful conduct was isolated. On this basis the Letting Agent company was fined $5,000 and the licensed Directors were fined $2,500 each for a total fine of $10,000. If the commission was (say) 15%, making the fine back would require bookings worth over $66,000. In other words, the unlawful conduct of the Letting Agent in not putting the Lot Owner first was not only a breach of the fiduciary duties owed by an agent to their principle, it was not worth it. The appropriate action when you lose a Lot from your Letting Pool, is just to let the forward bookings go…

1 Comment

  1. Author

    The owner is lucky they were able to see forward bookings in order to take such action. When I took over the management of my holiday property from Accor last year they didn’t provide access to any such information. The forward bookings were totally withheld from me and none of them were transferred to my agency. I did not realise this was potentially unlawful, wish I had known.

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