Hocking Stuart (Richmond) Pty Ltd has been fined $330,000 in the Federal Court on 6 October 2016, after admitting to misleading and deceiving buyers in relation to 11 residential properties sold in 2014 and 2015 in which property prices were underquoted in the marketing and advertising of the properties.
The Federal Court stated that price was an essential piece of information for prospective buyers, who should be able to rely on correct information to make an informed decision and the price representations made by Hocking Stuart Richmond were intended to create the ‘illusion of a bargain’ which would cause significant inconvenience to many prospective purchasers. Underquoting can cause interested buyers to waste time and money on inspecting properties, obtaining property reports, attending auctions and cause them to miss the opportunity to purchase elsewhere.
Forms of underquoting can include where a real estate agent:
- advertises or advises a prospective buyer that a property is available for sale at an amount that is less than the vendor’s asking price or reserve price;
- advertises or advises a prospective buyer of a price that is less than the salesperson’s current estimate of the likely selling price;
- advertises or continues to advertise a price that is less than a genuine offer or expression of interest by a prospective buyer that the vendor refused; or
- gives an inaccurate appraisal of the current market price of a property.
New underquoting laws have already been introduced in New South Wales as of 1 January 2016, making real estate agents liable for an underquoting offence if they state or publish a property price that is less than their reasonable estimate of the likely selling price agreed with the seller.
The New South Wales reforms also made it illegal for agents to promote properties with statements such as ‘offers above’ and ‘offers over’ a certain amount or to use symbols like ‘+’ which do not indicate the likely selling price to buyers.