I am sure that many of you like myself saw the reports in the media on the weekend with the NSW Premier Mike Baird and the Minister for Fair Trading Matthew Mason Cox vowing to crack down on agents that under quote if re-elected at the NSW election being held on 28 March 2015. This was also confirmed in this article on the Liberal Party website.
If we look at the Property, Stock and Business Agents Act 2002 (the Act) in this regard:
Section 72 of the Act prohibits an agent from making false representations with respect to the agent’s true estimate of the selling price of a property to either a seller or prospective seller of residential property.
Section 73 of the Act prohibits an agent, by any statement made in the course of marketing a property pursuant to an agency agreement for the sale of a residential property, falsely understating the estimated selling price of the property.
Section 75 of the Act extends the provisions of sections 72 and 73 to ‘estimated price range’ in the same way as it applies to ‘estimated price’.
The maximum penalty for a breach of the provisions is $22,000. It is interesting to note that there have been no fines issued or prosecution of agents for this practice in recent years.
EAC has been in discussions with Fair Trading Officers with regard to, what appears to be, an increase in the incidence of “under quoting” by some agents and the impact of significant price escalation driven by unprecedented consumer demand. This market activity and selling price increases has made the task of estimating future selling prices extremely difficult.
The comments made by both the Premier and the Minister fail to recognise the existing legislative requirements and the impact on consumer expectations of the agents if properly enforced. The greater majority of agents understand their responsibilities. For the few that don’t the law is already in place.
With the election looming I believe that the attack on estate agents was a “knee jerk” reaction and was purely for political gain (read votes) and not in the best interests of consumers or agents. The reality is that many well researched and well prepared estimates of selling prices by agents are often overtaken by buyer competition and market forces, factors outside the agents control and not readily predicted.
EAC enjoys a healthy working relationship with NSW Fair Trading and will continue to work with them to ensure that the interests of the industry and consumers are protected.
EAC Chairman Dale Whittaker is also disappointed with the approach that the government took on the weekend and he believes that the approach that NSW Fair Trading should be taking is to raise the entry level standards for the industry and through quality ongoing training.