Property 101: Property photos and rules in NSW to avoid misleading buyers

These Guidelines have been issued by the Commissioner for Fair Trading and apply to all agents licensed under the Property, Stock and Business Agents Act 2002.

They are intended to assist agents when publishing photographic advertisements.

Photographs are an influential selling tool in the home property market whether in print or on the internet. Photographs are used by agents in property advertisements, in addition to descriptive words and phrases, to help create a picture in the mind of the prospective buyer. A beautiful photograph of a house, its unique features, its views, and its surrounding local area can immediately draw in many potential buyers.

It is often said that ‘a picture is worth a thousand words’. Real estate agents should be mindful when using photographs in a real estate advertising campaign as visual communication must ensure the message is not misleading.

Consequently, these guidelines have been developed by the Office of Fair Trading to assist agents in publishing acceptable photographic advertisements which convey accurate information for the property buyer and leave the buyer with the ‘right impression’.

As the real estate industry becomes more competitive more photographs are used to advertise the sale of a house. Often several photographs of indoor and outdoor settings are used in the one advertisement which may leave some consumers uncertain or unclear about the pictures they see in the photographs. For example, where a single photograph in the property section of a local newspaper featuring a magnificent beach view is used, it may be unclear to consumers whether this view can be seen from the property being offered for sale or whether the beach is nearby. Without any labelling on the photographs themselves consumers will be left with uncertainty about the image they see.

The law

Section 51 of the Property, Stock and Business Agents Act 2002 forbids a licensee in the course of carrying on their business from publishing or causing others to publish any statement that:

• is intended or apparently intended by the licensee to promote the sale or lease of any property, and
• is materially false, misleading or deceptive (whether to the licensee’s knowledge or not).

A statement is published if it is: 

• in any newspaper, periodical publication or other publication, or
• publicly displayed in, on, over or under any building, vehicle or place (land or water), or in the air in view of persons on any street or public place, or
• in any document sent or delivered to any person or thrown or left at premises occupied by a person, or
• broadcast by radio or television, or
• circulated on an internet website or by electronic mail.

Penalties apply for breaches of the provision of section 51 of the Property, Stock and Business Agents Act 2002. The maximum penalty is 200 penalty units – presently $22,000.
 
Section 51 of the Property, Stock and Business Agents Act 2002 applies in addition to other legislation that relates to misleading or deceptive conduct and false representations, including the Fair Trading Act 1987.

Section 42 of the Fair Trading Act 1987 states that a person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Section 45(1)(b) of the Fair Trading Act 1987 provides that a person shall not, in trade or commerce, in connection with the sale or possible sale, of an interest in land or in connection with the promotion of the sale of an interest in land make a false or misleading representation concerning the nature of the interest in the land, the price payable for the land, the location of the land, the characteristics of the land, the use to which the land is capable of being put or may lawfully be put or the existence or availability of facilities associated with the land.

Penalties apply for breaches of section 45 of the Fair Trading Act 1987. The maximum penalty in the case of a person is 200 penalty units – presently $22,000 and for a company is 1000 penalty units – presently $110,000.

False, misleading and deceptive statements

A statement is taken to be false or misleading if it has a reasonable tendency to lead to a belief in the existence of a state of affairs that does not in fact exist, Whether or not the statement indicates that the state of affairs does exist.

Misleading or deceptive conduct is a concept that has been broadly interpreted judicially. Conduct is misleading or deceptive if it is likely to lead a reasonable or ordinary member of the class of persons to whom it is directed into error. Misleading conduct can include acts of silence or omission. Conduct can be misleading even if the agent does not actually make any representations. It is not relevant whether the agent actually intended to mislead anyone to establish liability. What is relevant is the overall impression created by the conduct and its actual or likely effect on reasonable or ordinary members of the target audience (prospective buyers). Any type of conduct related to the photographic advertising of real estate that could give a consumer the wrong impression may potentially breach the Property, Stock and Business Agents Act 2002 and the Fair Trading Act 1987.

Agents must ensure that any claims made about any property or land characteristics in any photographic representations and advertising are accurate and could not give prospective buyers the wrong impression. Statements made in conjunction with photographs of the views and facilities available in a local area must not be false or misleading.

Examples of undesirable photographic property advertisements which currently appear in newspapers, real estate publications and on the internet include: 

• a photograph of a water view or scenery, placed next to a photograph of a house, makes it difficult to ascertain whether the water view or scenery can be seen from the house or whether the photograph is a ‘location shot'
• a photograph of a beach scene with the wording ‘minutes to this!’ typed above the photograph does not give a clear indication of the distance from the property to the beach shown in the photograph
• a photograph of a park and beach with the wording ‘opposite home’ where, in fact, this view cannot be seen from the property
• a photograph of a house placed next to a photograph of a beach with the wording ‘stroll to beach’ printed underneath the photograph does not give a clear indication of the distance from the property to the beach
• a photograph of a beach with the wording ‘90 seconds walk to waters edge, not actual view’ printed at the bottom of the photograph needs more clarification
• a photograph on the internet of a beach with the wording ‘100 metres from beach’ printed at the bottom of the photograph needs more clarification.

The photographs and wordings in the above examples are likely to mislead, give the wrong representation or be unclear to any person relying on the photographs to give them an image of the property being offered for sale.

The ‘touching up’ of photographs that appear on internet websites which promote the sale of real estate is also of concern. Photographs of properties which have been touched up to hide undesirable characteristics or enhance other features could mislead consumers. Accordingly, agents must ensure that photographs are not used in a manner that may lead to implied representations that are false or involve misleading or deceptive conduct. Real estate agents must not: 

• modify or allow to be modified photographs of properties so that the images no longer truthfully and fairly represent that property
• change the appearance of a property by digitally removing or adding features, but adjusting the lighting slightly to compensate for poor lighting on an overcast day may be acceptable or
• zoom in on a photograph of a view which can be seen from the property to make that view appear closer.

The modifications to photographs described in the above examples are likely to be misleading or deceptive.

The use of labelling to clarify meaning

Accurate labelling of photographs used in property advertisements could eliminate any doubt in a consumer’s mind about what they actually see in a photograph.

Some examples of acceptable practices in photographic advertisements which Fair Trading suggests agents use are: 

• a photograph of a water view which has been taken on the property being offered for sale does not require any labelling
• a photograph of a water view which has not been taken on the property being offered for sale, but is within the immediate area, should have printed on the photograph ‘location shot’
• a photograph of a parkland or bushland which has been taken on the property being offered for sale does not require any labelling
• a photograph of a parkland or bushland view which has not been taken on the property being offered for sale, but is within the immediate area, should have printed on the photograph ‘location shot’.

Note: The term ‘location shot’ should only refer to photographs of facilities and services within the immediate surrounding area of the property being offered for sale, such as, a park, playground, beach, shopping village, café scene or other facility. Generally, the scene in the photograph labelled as a ‘location shot’ cannot be seen from the property being offered for sale, and was not taken on the property itself. Therefore, the most accurate description to print on the photograph would be ‘location shot’.

It is suggested that any photographs taken on the property itself to be used in real estate advertising do not require labelling. Accordingly, only photographs not taken on the property itself, but within the immediate surrounding area, will require the labelling ‘location shot’.

Photographs of the property (outside and inside photographs) that is being offered for sale which are for illustration purposes must not be misleading. The touching up of photographs would be considered misleading.

Further, the Australian Competition and Consumer Commission’s guideline ‘Fair and square - A guide to the Trade Practices Act for the real estate industry’ advises that vague statements about the location of land are likely to be misleading under the Trade Practices Act 1974. Only factual information about the location of land or property should be used.

The following examples show what wording would also be acceptable to use in the description of a property to supplement the photograph/s: 

• "2 km to beach” is preferable to “close to beach”; and
• “village shops 3 km” is preferable to “within walking distance of shops”.

All efforts should be made by agents and their employees to provide an accurate picture or impression in the consumer’s mind of the features of the property being offered for sale.

Agents cannot avoid liability simply by claiming that the buyer or consumer should have made reasonable enquiries and checked the information provided. Agents are responsible for their words and actions in their dealings with their clients.