It has been a long time coming, but now it is official.
Months ago, the company that owns Barry Plant Mount Waverley and 2 other Melbourne-area Barry Plant offices, appeared before the Federal Court of Australia on charges of "deceptive conduct" and "making false representations about property sales".
In short, underquoting.
The company, Melbourne South Eastern Real Estate Pty Ltd (MSE) [ACN: 128 550 541] has Barry Plant offices in Mount Waverley, Oakleigh and Wheelers Hill.
The breaches of Australian Consumer Law only apply to the Mount Waverley agent office.
Consumer Affairs Victoria (CAV) took action against the company related to 25 property listings that Barry Plant placed with realestate.com.au between 1 September 2014 and 25 August 2015.
The properties were located in (alphabetically): Ashwood, Burwood, Burwood East, Chadstone, Hugesdale, Mount Waverley, and Wheelers Hill.
The Federal Court found against the company on 20 of the properties.
MSE admitted that it had set search parameters on its listings that were less than the appraisal price, and for some of the properties, less than the estimated selling price written on the sales authority.
Underquoting is intended to draw in more customers to promote competition, in the hopes that it will drive prices up further than they might otherwise have been.
MSE is ordered to issue a public notice admitting their contraventions of law, to publish it on all websites on which the company operates (including realestate.com.au), and also display it in the Mount Waverley office.
They have also been issued a penalty of $720,000, which to our knowledge is the largest underquoting penalty so far. They must also pay $30,000 costs.
(Update 04/12/18: This is incorrect. We reported earlier in the year that Fletchers had been fined $880,000. Thanks to Simon Derham for pointing that out.)
Further, they must undertake a compliance program for their staff regarding legal obligations under Australian Consumer Law, and appoint a compliance offer to ensure the program is properly designed, carried out, and maintained.
The penalty far exceeds the nearly half-million dollars the agency received in commission on the properties.
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