Real estate exploitation raises concerns for those living with dementia

Concerns about the exploitation of older Australians have erupted after a Sydney real estate agent purchased a home at a significantly undervalued price from a man living with Alzheimer’s disease she held power of attorney over.

Rachelle Norah was suspended for 12 months and fined $11,000 for buying a home from a vulnerable 82-year-old man with alcohol problems for $500,000 under market value one month after the house next door sold for $1.1m.

The agent with a decade of experience went to the NSW Civil and Administrative Tribunal to overturn the decision, arguing that she did the right thing when she purchased the home for $600,000 at a significantly undervalued price in April, 2023.

But, the decision was upheld by the tribunal, which ruled the agent engaged in misconduct and took advantage of the man for her own personal financial benefit.

The Australian Institute of Family and Studies found that one in six older Australians experience elder abuse each year and 2.1 per cent will be victims of financial abuse.

The study showed older people with a disability or long-term health condition experience higher rates of elder abuse than older people without an impairment.

About 21 per cent of older people with a disability or long-term health condition experience elder abuse each year.

Dementia Australia executive director of services, advocacy and research Kaele Stokes said dementia and cognitive impairment could increase a person’s risk of experiencing elder abuse.

Dr Stokes said the disease impacted an individual’s cognition and decision-making skills, and could make them more vulnerable to being taken advantage of.

“There may also be a gradual loss of ability and capacity to manage financial affairs as dementia progresses,” she said.

“Financial abuse of people living with dementia is most often perpetrated by people entrusted to manage the money and financial affairs of someone living with dementia, which makes safeguards all the more important.”

Australian Lawyers Alliance spokesman Rodney Lewis has dedicated 20 years of his legal career to elder abuse cases.

Mr Lewis, who is also the Elder Law Special Interest Group chair, said these types of incidents occurred daily across Australia.

“We definitely need better laws, especially in NSW, where once you win a case, you can recoup the money, and most importantly, not see tens of thousands of dollars spent on legal fees,” he said.

He said the majority of time when a person was appointed a power of attorney it went well, but there were always cases when it did not.

“I have seen elder abuse cases many times, or seniors with money is another way to describe it. People befriend them and that is how it happens,” Mr Lewis said.

“If a person has a problem with cognitive ability, then it’s much more likely that they won’t know or they can be persuaded by the person who’s talking to them about transferring the house or the car or whatever it might be.”

Mr Lewis said there was a constant flow of cases in the NSW Civil and Administrative Tribunal where people go to ask them to review power-of-attorney documents.

The human rights lawyer said the application was not usually made by the elder themselves but a concerned family member.

“A family law dispute with children, loans and bank loan guarantees can go wrong,” he said.

“If an elder is approached with a proposal or deal to transfer a house and if the person is a lawyer, under a power of attorney, then you have a situation where there are laws and strict responsibilities.

“As far as the power of attorney is concerned, for somebody who breaks the rules and is liable to restore money and property to the person, the elder can go to court in a civil claim and try and get back the money and or title depending on the circumstances.

“There are serious penalties in the powers-of-attorney law that apply to issues of dishonesty and or taking advantage of the position of trust which a lawyer holds for the principal.

“The Powers of Attorney Act actually has criminal penalties attached to it.”

Mr Lewis said when cases involved a person affected by dementia it was usually an adult sibling who tried to do a deal about property, and one or more of the siblings find out and engage a lawyer.

“They will say, ‘My brother is trying to deceive mum into selling the home to him or let him have the home when she dies, and in the meantime, he’s promised to care for her, and she believes him’,” he said.

Mr Lewis said those types of cases could go to the tribunal, and another sibling is appointed financial manager or guardian.

He said the first thing anybody should do is see a solicitor capable of handling these cases to weigh up the risks of bringing a claim.