Barry Plant cops $720,000 fine for underquoting home prices
The Mount Waverley office in the Barry Plant estate agency group have been been found guilty and fined for underquoting.
They have been fined $720,000, plus $30,000 costs, after the Federal Court of Australia found it had engaged in misleading or deceptive conduct and making false representations about property sales.
It is not the heaviest fine as Fletcher and Parker were fined $880,000 for underquoting last year. And hockingstuart who were also fined $330,000.
The breaches, of the Australian Consumer Law, relate to conduct at the Mount Waverley office which is owned by Melbourne South Eastern Real Estate Pty Ltd.
They also operate Barry Plant offices in Oakleigh and Wheelers Hill.
The fine concerns 25 property sale listings on the realestate.com.au website between September 2014 and August 2015.
The properties were in Ashwood, Burwood, Burwood East, Chadstone, Hughesdale, Mount Waverley and Wheelers Hill.
The company admitted that, when uploading properties for sale, it had set price search parameters that were less than the appraisal price, and estimated selling price written on the sale authority (for some of the properties).
The $720,000 penalty exceeds the $490,923.67 in commissions the agency received for selling those properties.
The Herald Sun reported the case of two Mt Waverley homes, the agency had instructions from the vendors “not to sell them below a certain price, which was … more or substantially more than either the display price or the blind price,” Justice Mortimer said.
The vendors of one, located at 17 Gordon Rd (pictured in title), said they wouldn’t accept an offer of less than $1.2 million. However a blind price was set at $950,000 and the property eventually sold for $1.333 million.
The Federal Court's Justice Mortimer said this example showed “the deliberateness of the strategies employed”, adding house hunters were “entitled not to be misled about the likely selling price of a property”.
As part of the ruling Melbourne South Eastern Real Estate must also issue a public notice acknowledging their contraventions and publish it on all websites the company operates, and on realestate.com.au as well as display it in the Mount Waverley office.
The company must also implement a compliance program, including training its staff about their legal obligations under the Australian Consumer Law, and appoint a compliance officer to ensure the program is effectively designed, delivered and maintained.
The vigilant department also secured $60,000 after Consumer Affairs Victoria investigated Harcourts Wantirna and its sole director, Achilles Mantsos, after receiving 17 complaints about the company’s conduct between April and July of 2015.
The company acknowledged contraventions relating to four properties under the Australian Consumer Law (Victoria) and 20 properties under the Estate Agents Act 1980 (EAA).
The company routinely set price search parameters when uploading properties for sale on realestate.com.au, which were substantially less than the estimated selling range (ESR) or estimated selling price (ESP) on those properties’ sale authorities.
As a result, potential buyers searching for properties would enter their nominated price range, and find listings from Harcourts Wantirna for homes whose ESR or ESP was much higher.
In one example, a Wantirna property was advertised for $750,000, when the ESR was listed on the sale authority as $900,000 to $990,000. Another was advertised at “$580,000 plus”, when the ESR was $690,000 to $750,000.
On other occasions, the company provided an ESR where the difference between the upper and lower range limits was more than 10 per cent of the range’s lower limit, in contravention of the EAA.