This article is from the Australian Property Journal archive
MELBOURNE real estate agents Hocking Stuart Richmond has been fined a record $330,000 and legal costs of up to $90,000 for engaging in underquoting.
The Federal Court found Hocking Stuart Richmond engaged in misleading and deceptive conduct and to have made false and misleading representations about the sale of land.
In his judgement, Justice John Middleton said,
“Some may have missed the opportunity to buy elsewhere, being lured into a bargain that did not, and was never going to, eventuate.
“Similarly the vendors of other properties, who were not marketing their properties in the same way, may have missed out on getting potential purchasers into their properties.”
The Court ordered the agency to pay $330,000 in penalties to the Victorian Consumer Law Fund, as well as legal costs that could be up to $90,000.
Hocking Stuart Richmond will be required to display this notice in their office for six months and publish a notice in the newspaper summarising the court’s finding against them.
Furthermore, the Court ordered the agency implement a compliance program to educate Hocking Stuart agents about their legal obligations under the Australian Consumer Law.
Hocking Stuart will also need to employ a compliance officer to oversee the program so it is effectively designed, delivered and maintained.
In a statement, the agency said it regretted the mistakes.
“We want to assure our clients and buyers that we’ve already implemented a number of changes to ensure this doesn’t happen again.
“We put our agents through a refresher of Hocking Stuart’s rigorous compliance monitoring and training program, and have established a comprehensive compliance process and team within our office,” the statement read.
Although Hocking Stuart’s head office said it was disappointed with the decision and believes it has been made by the Court.
Consumer Affairs Victoria launched court action after its investigation found that the agency’s advertised price ranges were significantly lower than the expected selling point of 11 properties in Richmond and Kew.
Consumer Affairs has a further 13 investigations currently underway involving both franchisees from large estate agencies and smaller private licensees.
“Underquoting is not a smart sales tactic – it’s illegal. This serves as a serious warning to agents doing the wrong thing,” Acting Minister for Consumer Affairs Martin Pakula said.
“Victorian home buyers deserve a fair go. There’s nothing clever about deceiving people who are making one of the biggest purchases of their life,” he added.
Consumer Affairs Victoria director Simon Cohen said authority is working hard to identify and prosecute those who do the wrong thing.
“This outcome shows that we are serious about ensuring the market is fair and transparent for buyers.” Cohen said.
Australian Property Journal
