Combating misleading price advertising in Victoria
31 March 2016 REIA
Victorian Minister for Consumer Affairs Jane Garrett has announced plans to reform the Estate Agents Act 1980 to combat misleading price advertising on residential properties and provide certainty for buyers.
Under the new laws, real estate agents will have to provide prospective buyers and Consumer Affairs Victoria with evidence about how they arrived at a property’s advertised price.
Agents will be required to give prospective buyers a new information statement with the details of: • three comparable properties sold recently
• the agent’s estimated selling price
• the median sale price of properties for that suburb. New rules will aim to reduce misleading advertising practices and increase transparency:
• Phrases in the advertised price, such as ‘starting from’, ‘over’, and ‘+’, will be outlawed
• Advertised price ranges will be restricted to no more than 10 per cent
• Advertising will have to remain accurate through the sales campaign, and agents must revise the advertised price if a seller rejects an offer to buy that is above the advertised price.
Estate agents who fail to comply with the proposed underquoting laws risk fines of more than $30,000 and may also lose sales commissions and other fees. This represents an additional penalty of around $14,000 on an average home and much more on blue chip properties. The Victorian Government intends to introduce these reforms into Parliament in the middle of the year, to commence in late 2016, and will continue to consult with the real estate industry.
Source: Real Estate Institue of Australia March 2016 update