The Real Estate and Business Brokers Act, 2002 (“REBBA”) was recently amended to address the issue of “phantom offers” in the real estate market.
Prior to July 1, 2015, when a potential buyer made an offer on a home, there was nothing preventing the seller’s agent from advising that there was a competing offer, when there wasn’t.
This tactic would often cause potential buyers to raise the purchase price offered.
The amendments to REBBA prohibit agents from advising that an offer has been received unless it is in writing and signed.
It also requires real estate brokerages to retain copies of the bidding history for a property.
The intent of these amendments is to make real estate bidding wars more transparent.
The new legislation is meant to prevent offers that are talked about, but never materialize, from artificially raising the price.
If you require assistance with respect to suspected phantom offers, or for any other real estate law matter, please contact one of the real estate lawyers at Daniel & Partners LLP.
Article by Brianna Mayes, summer law student.