Understanding changes to under quoting laws
Understanding changes to underquoting laws from Consumer Affairs Victoria
Changes to the Estate Agents Act 1980 will come into effect on 1 May 2017 to strengthen underquoting laws in Victoria.
Your responsibilities under the new laws
From 1 May, all estate agents and agents’ representatives selling residential property in Victoria:
- must include an estimated selling price in the sales authority that:
- is reasonable, and
- takes into consideration the sale price of the three properties that are most comparable to the property for sale, unless the agent considers that less than three comparable sales are available.
- must consider the standard, condition and location of the property, and the date of sale when selecting the most comparable property sales
- must inform the seller and update the sales authority if the estimated selling price changes
- must provide a Statement of Information in the approved form during open for inspections, with online advertising, or within two business days of a request from a prospective buyer. The Statement of Information must include:
- an indicative selling price. This cannot be less than the estimated selling price or the seller’s asking price, or an amount already rejected by the seller
- details of the three most comparable property sales
- the median house or unit price for the suburb.
- cannot advertise price ranges of more than 10 per cent
- cannot use qualifying words or symbols, such as ‘from’, ‘offers above’, or ‘+’, when advertising a price or a price range
- must update advertising if the estimated selling price changes, or if the seller rejects a higher written offer to buy the property.
Estate agents and agents’ representatives found to be underquoting, risk a penalty of more than $31,000 (200 penalty units) and loss of their sales commission.
These changes will complement the Australian Consumer Law, which prohibits misleading and deceptive conduct by a business, such as making false and misleading representations about the sale price of a property.
For more information about the changes, visit the Understanding underquoting page on our website.
We regularly inspect Victorian businesses to check that they are complying with legislation, or to investigate when there are signs that a business may not be doing so.
We will continue to monitor sales and conduct inspections to ensure estate agents are complying with the law.
For more information, visit the About inspections page on our website.
Note: We will notify you when the following documents are available:
- Statements of Information
- Guidelines for selecting comparable properties
- Determination of metropolitan areas.
Hocking Stuart (Richmond) Pty Ltd
We took action in the Federal Court of Australia against this real estate agency after investigations found they had advertised price ranges lower than the expected selling price in the marketing of 11 properties in Richmond and Kew.
The company was penalised $330,000 and ordered to pay costs of $80,000, as well as implement a compliance program aimed at educating its agents about their legal obligations.
Hocking Stuart (Yarraville) Pty Ltd
We accepted an undertaking from this agency after it admitted to underquoting the sale price of six properties in Altona North, Brooklyn, Footscray, West Footscray and Yarraville.
The company will contribute $45,000 to the Victorian Consumer Law Fund, implement a compliance program and display a notice at its business premises acknowledging its contraventions.
O’Brien Real Estate Pty Ltd
This company offered an undertaking to contribute $45,000 to the Victorian Consumer Law Fund after acknowledging it underquoted the sale price of seven eastern suburb properties.
It will also establish and implement a compliance program and display a notice at its business premises acknowledging its contraventions.