Calls for conveyancers to stop ‘unethical’ referral fees
Buying a new home is one of the biggest purchases most people ever make, and having good legal representation is a must. But in some parts of the country real estate agents are being paid to recommend legal firms to their clients and critics say the practice should be outlawed.
Transcript
00:00 When Napoleon Bernal bought this Gold Coast home, he needed a law firm.
00:07 Bewildering choice, very, very difficult to differentiate between them,
00:12 all charged about the same ballpark figure.
00:15 His agent recommended two firms and he picked Own It Conveyancing,
00:20 but later switched because he was unhappy with their work.
00:24 While there's no evidence Own It paid for the recommendation,
00:27 the firm openly advertises a million dollar referral program.
00:32 Here in Queensland, it's not against the law to pay for referrals
00:36 as long as a payment is declared,
00:38 but there are growing concerns about the practice.
00:41 The feedback from members is that a lot of real estate agents
00:44 are now basically demanding a referral fee.
00:46 Paul Garson argues the payments are unethical kickbacks
00:50 and can create conflicts of interest.
00:52 You've got to cast doubt on whether that lawyer or conveyancer
00:56 is going to look after the client.
00:58 He's provided these emails, which he says were sent to agents
01:01 offering payments of up to $400 per client.
01:05 I am noticing that the fee is going up.
01:08 It's become a bit of a bidding war.
01:10 First call.
01:11 But the real estate industry in Queensland
01:13 believes the practice is acceptable.
01:15 Disclosure is of key importance,
01:18 so ensuring that your client is aware of the benefit
01:21 and consent is obtained.
01:23 Final call.
01:24 It's banned in Tasmania and WA
01:26 and been against the law in South Australia for 50 years.
01:30 It should be adopted in other states or territories
01:33 that don't have this ban.
01:35 A stance Paul Garson wants everywhere.
01:39 [BLANK_AUDIO]