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Property management argument ends in nine-month ban

29 September 2015 Nick Bendel

A principal has been banned after acting as “judge and jury” in a dispute with a landlord over liquidated damages.

Christopher Hugh Fyson, managing director of Professionals Fyson & Associates, told RPM that he had been punished over an innocent mistake.

Consumer Protection Western Australia announced that Mr Fyson had illegally withdrawn $6,850 from the Kalgoorlie agency’s trust account in August 2013.

The State Administrative Tribunal banned Mr Fyson from holding a licence and triennial certificate for nine months, while his business was fined $8,000.

Consumer Protection said the funds were withdrawn from the trust account during a dispute with the owner of a combined commercial and residential property, which the agency had been managing.

“While the original time period under the residential management agreement had expired, the five-year commercial management agreement was still in effect for another four months,” according to the regulator.

“When the owner of the property arranged to terminate the agreements and list the property with another agency, Mr Fyson and his agency claimed the money as compensation for liquidated damages, which the owner disputed, having already requested the matter be taken to arbitration.”

Mr Fyson, who previously spent six years as the chairman of Professionals Real Estate, told RPM that he believed he was legally entitled to claim the money.

“Under what we understood as the rights under our authority, we charged him liquidated damages. One of our authorities allowed us to do that and the other one – which we hadn't realised had a slightly different wording – didn't allow us to do that,” he said.

“What we also discovered – and which none of us knew, including people who had been in the industry as long as I have – is that the one that does allow us to charge liquidated damages, you can’t actually do without a court order.”

Mr Fyson said his agency immediately refunded the money once it became aware of the technical breach.

“I now have to live with this for the rest of my life,” he said. “I've had 40 years of immaculate record where I've trained umpteen people and led the industry for years in best practice just smashed against the wall.”

WA’s acting commissioner for consumer protection, Gary Newcombe, said property managers must respect trust account laws.

“Those in charge of real estate trust accounts should not act as judge and jury and are required to allow the court to resolve any contractual or financial disputes,” he said.

“Money held in trust does not belong to the agency, so those in control of trust accounts cannot make unilateral decisions when disputes arise and take funds without the agreement of the client.”

Ian Cornell, who is the current Professionals chairman, said the network fiercely opposed fraud – but that Mr Fyson’s case was actually a technical oversight.

“He always operated his office under the mantra of best practice and we agree with Chris that this is just an aberration that has occurred,” he told RPM.

Update: The original introduction accidentally used the word ‘tenant’ instead of ‘landlord’. The error has now been fixed.

Property management argument ends in nine-month ban
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