The Australian Competition and Consumer Commission has obtained Federal Court orders against Metropolis Real Estate Pty Ltd for making false, misleading and deceptive representations to a client regarding the fee for acting as agent on a property sale.
In bringing the proceedings, the ACCC alleged that Metropolis Real Estate had misled and deceived a client by quoting a flat fee of $5,000 and then after settlement, and without the vendor's consent, withholding an extra 10 per cent from settlement funds on account of the Goods and Services Tax.
Where prices are quoted to consumers for goods or services, it should be on a GST-inclusive basis so there is no opportunity for the consumer to be misled about prices. The court findings were consistent with the ACCC's view that pricing should be GST-inclusive to avoid misleading conduct.
"A real estate agent occupies a position of trust in relation to their client", ACCC Chairman, Professor Allan Fels, said today. "If an agent makes an agreement to sell a home for a flat fee, the vendor is entitled to believe that the fee is inclusive of the goods and services tax".
The ACCC had previously approached Metropolis Real Estate seeking to resolve the matter administratively however the company had declined to do so.
Metropolis has consented to orders:
- declaring that Metropolis had engaged in false, misleading and deceptive conduct
- restraining Metropolis from representing GST exclusive prices for its real estate services
- requiring Metropolis to refund $500 to the vendor
- requiring Metropolis employees and agents to attend a trade practices compliance seminar; and
- pay the ACCC's legal costs.