Insidious elder abuse demands far more robust systemic checks – Sydney realtor buys house $500k under market value

In 2023, an 82-year-old Sydney man with a form of dementia and a history of substance abuse sold his house to a professional Sydney realtor, Rachelle Nohra of Eser Property, for $500,000 below market price. While also raising concerns about the time it has taken for the conduct to come to light and make its way through the Commissioner of Fair Trading and the Civil and Administrative Tribunal, Nohra’s 12 month realtor license suspension has been upheld and $11,000 fine sustained last week.

Systemic inadequacy

The Attorney-General’s Department lists numerous plans and supports available to prevent elder abuse and support those reeling from its impact. The government is well-aware of the complexity of elder abuse, stating it is, “a complex issue that is often caused by someone the older person trusts, such as a family member, friend, professional or paid caregiver”.

The response has largely consisted of extensive numbers to call and some increased funding for specialist front-line services to support older people. The intricacies of this case highlight the degree of inadequacy of current response legally and systemically.

The stories of abuse, particularly to the eye-watering amount of hundreds of thousands show the need for drastic reform. From a systemic standpoint, multiple levers must be pulled towards mitigating the opportunity for elder abuse, particularly at the hands of licensed professionals leveraging respect for easy trust.

This latest instance, one in a long line, of seniors selling their homes for severely under market value is an indictment, not just on the resources that are proving ineffective but on the checks and balances in professional conduct compliance and other government departments and processes. Prevention, not punishment, must be the policy attitude for reform.

Systemic breakdown

The case between Rachelle Nohra and Commissioner for Fair Trading, as heard in the Civil and Administrative Tribunal before Senior Member L Bryant, is a sobering read.

Known only as “Mr. A”, the senior is stated as an, “82-year-old, self-funded retiree, who lives alone, is unmarried and has no children”. Importantly the Tribunal affirmed that, “Mr. A has a significant cognitive impairment, consistent with Alzheimer’s disease.”

It was found that Nohra met Mr. A in 2015 and “developed a friendship with him.”

The Tribunal also notes that, “on 21 July 2022, Mr. A executed an enduring power of attorney and an appointment of enduring guardian, appointing the applicant [Nohra] as his attorney and guardian.”

It is from this place of trust and power that, “on 28 April 2023 the applicant [Nohra] purchased Mr. A’s home (the property) from him at significant undervalue.”

It would take a further five months for the government’s Guardianship Division to “revoke the appointment of the applicant [Nohra] as Mr. A’s enduring power of attorney and enduring guardian.”

Yet concerningly the Tribunal found that, “The sale of Mr. A’s home did not occur in the course of the applicant’s dealings as a real estate agent, and did not involve the use of the power of attorney she had been granted by Mr. A.”

Nohra’s actions in the real estate exchange were as a buyer from a seller, however this exposes that in the exchange, multiple government departments did not pick up on the legal relationship between the two parties, or the need for further investigation.

$1.1 million home value

Rachelle Nohra has publicly stated before multiple government bodies that she knew that, “a month before the sale the property next door had sold for $1.1 million and Mr. A’s property was of the same or similar value.”

However, across all the years and fronting assessment, Nohra has maintained, “that purchasing Mr. A’s property in the circumstances was and still is the right thing to do.”

Under cross-examination Nohra did yield that, “Mr. A was vulnerable to her taking advantage of him at the time of the sale”, and, “at the time of the sale she had some responsibility for Mr. A’s financial affairs and she knew that there were times when he could not make decisions about his financial affairs.”

Questioned by the Tribunal, Nohra testified to have, “proposed $600,000 as a fair price. [However] The applicant [Nohra] was not able to explain why $600,000 was fair, other than it was her opinion, and was not based on calculations.”

The Tribunal clearly noted that Nohra’s opinion on the ‘fairness’ was a mute point as her, “financial interest in the transaction means that she has a direct interest and her evidence of what constitutes fair value is of limited weight.”

Report findings

Upon further cross-examination of Nohra, the Tribunal found:

“She knew that if Mr. A needed money for his medical care or, for example, to pay for a deposit for an aged care facility it would likely come from the proceeds of sale of his home.”

“She did not check before the sale that the purchase price would cover his future needs.”

“She did not consult a financial advisor to see whether the proceeds of sale would see him through retirement.”

“There was a conflict between Mr. A’s interests and her own interests when the price was negotiated.”

Multiple times Nohra has conveyed that Mr. A said he would gift her the house, however no written proof has been brought forward to this.

Additionally, her testimony contradicts this as well, “Mr. A told a solicitor, Ms Dona, that he sold his house in order to have money in the bank and to avoid being poor, which is inconsistent with gifting the house to the applicant.”

Tenancy

It was also found that Nohra did not put into place tenancy protection for Mr. A after the sale of the house, putting him at risk of eviction after 90 days, which could arguably be of benefit to her as the new owner.

The report found, “the residential tenancy agreement does not and could not preserve Mr. A’s right to continue living at the property – Mr. A is still dependent on the applicant for this – and her lack of knowledge in this area had a real consequence for him.”

The standard of systemic protections

The robustness of the systemic protections against elder abuse, particularly in financial matters has shown to be inadequate due to the complexity of attitudes involved.

The Tribunal found that Nohra, in the course of multiple hearings and witness, “showed no real insight into her misconduct in relation to the purchase of Mr. A’s property.”

“The applicant [Nohra] was unable to recognise that her personal and financial interests conflicted with those of Mr. A, an elderly and vulnerable person who, at the time, she had responsibilities to as his enduring power of attorney and guardian.”

The systemic protections set in place to protect seniors must be resilient to mitigate instances where those that exploit maintain an attitude of utter innocence. “The applicant’s [Nohra’s] belief that purchasing Mr. A’s property in the circumstances was the right thing to do is greatly concerning. Of equal concern is the applicant’s failure to accept responsibility for the issues.”

Reform required

The report clearly states, “The Tribunal is satisfied that Mr. A did not have the requisite mental capacity to sell his home to the applicant at the time of the sale.” It is incumbent on all systems involved in the sale of property in Australia, particularly in this case Revenue NSW, that checks and balances are instituted to assess the cognitive ability for sales to go through.

Particularly in the significantly reduced stamp duty that would have been attached to the transaction through Revenue NSW, there should have been the opportunity for red flags to be activated within the transaction, commencing investigation by relevant government bodies.

As to the clarity of yet another case of established elder abuse, the Senior Member Bryant for the Civil and Administrative Tribunal NSW stated, “the Tribunal has found that the applicant took advantage of a vulnerable elderly person for her own personal financial benefit.”

With the current legal inability to nullify the transaction, it is imperative that reform is enacted to protect the exploitation of vulnerable seniors who are not in a position to protect themselves. Preventative systemic measures must be robust to shield against the precedent of subtle, insidious and complex workings of elder abuse.