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16 December 2015

An Adelaide real estate agent has been convicted for offences relating to the 2013 sale of a dying woman’s Para Hills property.

Nabil Chehade and NRC Property Group, trading as Chehade Real Estate, were both convicted in the Elizabeth Magistrate’s Court for obtaining a beneficial interest in respect of a property that they were engaged as the agent and sales representative to sell. Magistrate McLeod imposed penalties of $3600 each for Nabil Chehade and the NRC Property Group.

Commissioner for Consumer Affairs, Dini Soulio, said Chehade was engaged to sell a four-bedroom home on behalf of its owner, however the purchasers were Chehade’s sister and her husband.

“Consumer and Business Services (CBS) has successfully prosecuted Nabil Chehade, Director of Chehade Real Estate, and Chehade Real Estate with one count each of obtaining a beneficial interest in land they had been authorised to sell under the Land and Business (Sale and Conveyancing) Act,” Mr Soulio said.

“When Chehade first presented the sale contract to the vendor for $275,000, he failed to advise the vendor that the purchaser was his brother-in-law.

“When his brother-in-law couldn’t secure finance on his own, his sister, who was also an employee of his real estate firm, became co-purchaser. It was only through the vendor’s son conducting his own internet research that the connection was discovered.

“It is important to note that in this situation, the basis of this offence is not about the sale price of the property.

“By acting as he did, Chehade and his real estate company created the perception that they were not acting in the vendor’s best interests and had a conflict of interest, which might ultimately operate to the detriment of the vendor.

“We will never know if the property may have been sold for a lower or higher price had it not been sold to the defendant’s sister and her husband.

“The purpose of the law is to ensure that land transactions are kept at arm’s length so consumers are protected.

“This is one of the most serious offences that a real estate agent or sales representative can commit, as it has the potential to undermine confidence in the integrity of the real estate industry as a whole.”

The maximum penalty for an offence under section 24G for both an agent and sales representative is $20,000 or imprisonment for one year.

In addition, Chehade’s company was fined the sum of $3600 for an additional offence of allowing its’ employee to act as a sales representative without a licence, bringing the total penalty to $10,800.

The employee was held out by the company to be an “Area Manager” and appointed as sales representative for three separate properties. In fact, he was only studying to become a real estate agent and not registered as a trainee or a sales representative.

In handing down sentence, Magistrate McLeod said: “The public has a right to expect that land agents and sales representatives act with complete integrity.  Anything short of that – including the conduct to which you have admitted – however explained – only seeks to undermine the level of confidence in an industry where trust is fundamental. It also acts as fuel to perceptions about the lack of oversight of the real estate industry and the prevalence of sharp practice amongst agents and sales representatives.”

“The penalties imposed in this case should act as a strong deterrent to the real estate industry that conduct of this nature is not dealt with lightly by CBS. We believe it is crucial that the public can have confidence in the integrity of the industry in South Australia,” Mr Soulio said.

Consumer concerns or complaints can be made to CBS on 131 882 or for more information visit cbs.sa.gov.au.