The Federal Court has handed down the largest penalty for underquoting in Victoria’s history, with an eastern Melbourne real estate agency fined $880,000.
Fletcher & Parker (Balwyn) Pty Ltd was today found to have engaged in misleading or deceptive conduct, and to have made false or misleading representations about the sale of land.
It follows a sweeping crack down on underquoting by the Andrews Labor Government and the introduction of new laws to stamp out the practice.
Fletcher and Parker (Balwyn) – operating as the “Fletchers” Blackburn and Canterbury offices – will be forced to pay $880,000 in fines, $40,000 in costs to Consumer Affairs Victoria and implement a program to educate its agents about their legal obligations.
The agency must appoint a compliance officer to ensure that the program is effectively designed, delivered and maintained and acknowledge their contraventions in the local newspaper in which they advertise, and on property websites, and display a notice in their office for six months.
The record-breaking outcome is the result of ongoing investigations by Consumer Affair Victoria (CAV) through their Taskforce Vesta.
The taskforce found that Fletcher’s marketed and negotiated the sale of 22 properties in Melbourne’s east during 2015 either knowing the vendors would not sell for a price within the listed range, or that the property was unlikely to sell for the price listed.
This record penalty comes a week after the Federal Court handed down a $160,000 penalty to Manningham Property Group Pty Ltd (trading as Hocking Stuart Doncaster) for underquoting nine properties in Melbourne’s east.
CAV has been active during the spring auction season, with inspectors issuing 50 agents with notices to supply documents.
Inspectors are conducting follow-up inspections and any serious contraventions of the new laws will be referred to Taskforce Vesta for further investigation.
Quotes attributable to Minister for Consumer Affairs, Gaming and Liquor Regulation Marlene Kairouz
“Underquoting is dishonest, misleading and against the law – and today’s decision shows that if you do it, you’ll pay the price.”
“In the past fortnight the Federal Court has handed down more than $1 million in penalties for underquoting, which is a clear message to all agents that it won’t be tolerated in Victoria.”
“This outcome will give homebuyers the confidence that this dodgy practice is being stamped out.”
Reviewed 19 August 2020