Agency Pays Record Price For Underquoting

A Melbourne real estate agency caught underquoting property prices to house hunters has been sentenced today by the Federal Court of Australia.

Hocking Stuart Richmond was found to have engaged in misleading and deceptive conduct and to have made false and misleading representations about the sale of land.

The agency will now:

  • Pay $330,000 in penalties to the Victorian Consumer Law Fund, as well as legal costs that could be up to $90,000
  • Implement a compliance program to educate Hocking Stuart agents about their legal obligations under the Australian Consumer Law
  • Employ a compliance officer overseeing the program so it is effectively designed, delivered and maintained
  • Issue a notice in The Age’s Domain liftout summarising the court’s finding against them
  • Display the notice in their office for six months.

Consumer Affairs Victoria commenced the 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.

In August, the Andrews Labor Government announced tough new laws targeting underquoting in the real estate industry, set to come into effect in 2017.

Quotes attributable to Acting Minister for Consumer Affairs Martin Pakula

Underquoting is not a smart sales tactic – it’s illegal. This serves as a serious warning to agents doing the wrong thing.”

“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.” 

Quote attributable to Consumer Affairs Victoria Director Simon Cohen

Consumer Affairs Victoria is working hard to identify and prosecute those who do the wrong thing, and this outcome shows that we are serious about ensuring the market is fair and transparent for buyers.