NSW Fair Trading prosecutes Double Bay and Surry Hills auction price underquoting allegations

NSW Fair Trading prosecutes Double Bay and Surry Hills auction price underquoting allegations
Jonathan ChancellorDecember 7, 2020

The Sunday Telegraph has revealed that NSW Fair Trading has accused the BresicWhitney agency of advertising two auction properties — in Double Bay and in Surry Hill — at prices below estimates that were given to sellers in written agreements.

The agency only learnt of the court action on Friday night and was yet to decide whether it would defend the claims, but accepts it needs to ensure future compliance.

The consumer watchdog will reveal its case in the Parramatta Local Court later this month.

The more serious price discrepancy alleged was at Double Bay, where the publicly published price guidance reputedly did not match the private agency agreement documentation in the office paperwork.

The Murilla apartment at 62/543-545 New South Head Road had a reported price guide of over $1.5 million last November, but Fair Trading investigations revealed the selling price estimate in the agency agreement at the low end of $1.6 million.

The late 1950s, A.M. Bolot-designed, company title apartment (below) was reported in the Wentworth Courier as sold for $1.79 million (and at $1.76 million by the Sunday Telegraph) through agent Walter Burfitt-Williams. The three bedroom sub-penthouse had 176 square metres space in the eight storey block above Redleaf Pool at the corner of New South Head and Victoria roads. The previous time it was marketed for sale was in 1989.

When contacted by The Sunday Telegraph cost of living editor, John Rolfe, before its front page splash, Walter Burfitt-Williams said: “The owner gave us instructions.”

At Surry Hills an 1890s terrace house at 14 Collins Street was advertised last November with a price guide of over $1.05 million, but the estimate in the agency agreement was $1.1 to $1.2 million. The guidance was lifted from $1,025,000 during the marketing campaign.

The two bedroom terrace (below) actually sold for $1.07 million through Nic Krasnostein, so it appears, with benefit of hindsight, he may have been overly ambitious in his pitch to the vendor. It sold to an investor who sought to rent it out at $850 a week. It had previously sold at $610,000 in 2005.

The prosecutions are the third in a decade.

“We believe we’ve found evidence to prove the agent has under quoted,” Commissioner Rod Stowe told The Sunday Telegraph who published a Warren cartoon too.

Source: Sunday Telegraph

Last December, Property Observer reported possible underquoting activity from an undisclosed agency was under investigation.

Operation Balaya, an investigation specifically developed to look at real estate compliance, was launched on agencies operating in the inner-city.

Officers were also checking licences, certificates, current continuing professional development, professional indemnity insurance and current and past financial year qualified audits.

“During its inspections, NSW Fair Trading identified certain information that requires further investigation to establish whether or not representations made by a real estate agency in relation to a number of recent sales were misleading,” the Minister for Fair Trading Matthew Mason-Cox said.

“Agents who engaged in this illegal practice could face a maximum penalty of $22,000 or depending on the severity of the breaches an agency could have its license cancelled.”

The NSW Premier Mike Baird recently elevated the issue into an election policy.

NSW estate agents were reminded last weekend that they must tell buyers the same price guidance estimate they have given to their vendors.

Depending on the success of his re-election, Baird has vowed to crackdown on price underquoting… and overquoting too.

Not only fines, but also the loss of sale commissions for any such sale where there is intentional false feedback.

Property Observer gleans the genesis of the policy was when the Mason‐Cox was quoted a price on a Sydney unit, only for him to discover it sold for 25% more a few days later. 

There has, however, not been a fine on an agent for underquoting since 2004 when an agent was fined more than $14,000 by NSW Fair Trading. In 2008 another agent was disqualified from holding a licence for five years for underquoting, The Daily Telegraph reported.

"There are some agents that bend the rules and waste everyone's time," Baird said.

"The practice of underquoting has to end."

"This is aimed at those who advertise a price that they know is not fair value for a property."

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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