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Hocking Stuart real estate agency in Richmond fined for rife underquoting on 11 properties

Hocking Stuart real estate agency in Richmond fined for rife underquoting on 11 properties

31 October 2016 Scott Carbines, Samantha Landy

REAL estate agents Hocking Stuart have been fined $330,000 for underquoting on 11 inner-city properties in Melbourne.

The Richmond agency has also been ordered to pay up to $90,000 in costs.

Consumer Affairs Victoria took legal action against the Bridge Rd office in February, claiming it breached Australian Consumer Law by underquoting properties in Richmond and Kew in 2014 and 2015.

One of the worst instances saw a property in 14 Lyndhurst St, Richmond was advertised at $800,000 to $880,000 before selling for $1.102 million.

Another home at 39 Barkers Rd in Kew was advertised for $700,000 to $770,000 and was sold at $955,000.

CAV had previously told the Federal Court the agency should lose its $200,000 in commissions and be fined about $50,000 per property scrutinised.

It is illegal for an agent to advertise or advise a price that is less than the seller’s auction reserve or asking price, or their own current estimate of the likely selling price.

Justice John Middleton said when delivering his judgment: “Buyers should be able to rely on correct information to make an informed decision.”

“In view of the ‘illusion of a bargain’ created by Hocking Stuart, Richmond, in respect of each property, many consumers seeking to buy a home were likely to be significantly inconvenienced, disappointed and deceived.

“Some may have missed the opportunity to buy elsewhere, being lured to a bargain that did not, and was never going to, eventuate.”

The court heard that another implicated agent, Trent Stewart, wrote to a client: “We want to get the best price for you, and the best way to do that is to create an illusion of a bargain”.

Mr Bhojani said the office director Peter Perrignon had also sent a written appraisal to the vendors of a two-bedroom cottage at 278 Mary St estimating its value at $850,000-$900,000.

But the property hit the market in July 2014 advertised from $700,000-$770,000, and eventually sold at auction for $955,000, he said.

Mr Bhojani said Mr Perrignon quoted the same range for a property in Kew, telling the sellers in an email: “We have it as $700,000-$770,000 as a starting point, but it has no relevance to what we both think it’s worth.”

Federal Court Justice John Middleton said in August deterrence was important in such a case.

The consumer watchdog’s half-year report revealed in April there were 12 major underquoting investigations underway following CAV inspections.

But CAV is yet to take legal action against any other agencies.

 

Source: heraldsun.com.au

Date: October 6 2016