Real estate agents Australia-wide have been warned not to mislead prospective buyers over price projections following a Federal Court decision today.
Justice Sundberg has found that Gary Peer & Associates Pty Ltd had engaged in misleading conduct in the way it advertised a property at 341 Glen Eira Road, Caulfield, Victoria in 2003.
The company advertised the property with the representations "price guide $600,000 plus buyers should inspect" and later "price guide $650,000 plus buyers should inspect".
The court found that the representations falsely represented the price at which:
- the vendors of the property were prepared to sell
- the vendors of the property had instructed the respondent to sell, and
- the real estate agent believed that the property was likely to sell.
The court also found that Gary Peer & Associates Pty Ltd did not have reasonable grounds to make the representations.
Justice Sundberg stated it was appropriate in this case to make declarations to mark the court's disapproval of the real estate agency's conduct. He noted that "the subject matter of the case is of considerable public interest, involving as it does advertisements for the sale of real property that affect many members of the public".
He noted that "the applicant, as a public body charged with the responsibility for enforcing the Act, has a genuine interest in seeking declarations".
The court ordered the company to pay the ACCC's costs.
In 2003 the ACCC identified misleading and deceptive behaviour in the property industry as a priority area. Since that time the ACCC has worked with the industry at both the national and local levels to improve compliance with the Act.
"The Trade Practices Act requires adequate and appropriate disclosure at all times of all relevant price information, so that prospective buyers and the general public can make informed pricing decisions", ACCC Chairman, Mr Graeme Samuel, said. "This case is the first case of the underquoting of property prices brought by the ACCC. The decision has national coverage.
"The court's decision is a timely reminder that the real estate industry has to be ever vigilant and compliant with the Trade Practices Act in respect of its advertising practices".