SuperUser posted on July 19, 2009 13:32
Vendors and agents face big underquoting fines
Caroline James
July 19, 2009 12:00am
Source: theheraldsun.com.au
HOMEOWNERS face fines of up to $220,000 for underquoting their property's expected auction price, in a radical shake-up of real estate law.
And unsuccessful homebuyers who are duped will be able to seek pre-purchase costs back from greedy vendors and real estate agents under the changes.
Australian Competition and Consumer Commission boss Graeme Samuel yesterday warned cheats they would be relentlessly pursued under the new laws, which will come into force on January 1.
"If a vendor is complicit with this conduct, they will be fined, too," Mr Samuel said.
"That $220,000 (fine) is a large chunk out of the sale price of your house.
"So clean up your act now because, if you do not, the ACCC and state bodies will come down on you."About 45 agents have received written warnings about underquoting since 2004 15 of those since January 1.
Victoria's property market has recorded its 10th-straight week of auction clearance rates above 80 per cent.
Yesterday 236 homes were sold at auction.
Federal Consumer Affairs Minister Craig Emerson said the changes including fines of up to $1.1 million for real estate agents who underquote would "totally change the landscape within the real estate industry".
The ACCC and state consumer rights watchdogs, including Consumer Affairs Victoria, will get "real teeth for the first time" to prosecute those who advertise home prices below the vendor's reserve, Dr Emerson said.
"This (law) is here to protect buyers so they don't waste money on . . . building inspections, trying to buy homes they never really could have bought if they'd known the real price," Dr Emerson said.
The changes will result from the proposed Trade Practices Amendment (Australian Consumer Law) Bill 2009.
The Bill went through the House of Representatives and is expected to be passed in the Senate when Parliament resumes next month, before returning to the lower house for a final vote.
Dr Emerson's spokesman, Chris Ward, said the Bill "so far" had bipartisan support.
Under the changes, if a buyer is led to believe a house will sell for $500,000 and later finds the vendor's selling price is $580,000 he or she can complain to either the ACCC or CAV, which can immediately demand the vendor and/or agent show proof they intended to sell for $500,000.
If not satisfied, the watchdogs can take the case to a civil court.
If the ruling is in its favour, it can ask the court to issue "substantial fines".
"The new law will allow the courts to order the offender to pay restitution . . . and penalise the offender that is what is groundbreaking," Mr Samuel said.