NSW Fair Trading Minister Matthew Mason-Cox today issued a stern warning to real estate agents, revealing a blitz of property auctions is underway with a focus on underquoting, dummy bidding and deceptive conduct.
“In August, Operation Kuban was launched in the Northern Beaches to check licenses and gather intelligence on any underquoting activity, Mr Mason-Cox said.
“Officers attended 74 agencies, sighted the licenses or certificates of more than 450 people and reviewed the sales records of 285 properties. “There was no evidence of underquoting but officers issued 21 Penalty infringement notices, totalling $18,150.
“Last month, Operation Gavel targeted real estate agents in Sydney’s North West, which involved both covert and overt investigations.
“NSW Fair Trading officers attended open days, posing as young couples wanting to buy a property. “They recorded the sale price information provided by the selling agent, while other offices conducted overt inspections of the real estate businesses to determine if underquoting had taken place.’’
While all the agents investigated were found to be compliant in the area of underquoting, NSW Fair trading treats any allegations of that kind of activity very seriously, Mr Mason-Cox said.
“The market is very strong at the moment, which is why NSW Fair Trading is committed to being out in the field to ensure that it is a fair and competitive one for everyone,’’ said Mr Mason-Cox.
“The practice of underquoting is shameful and cheats innocent prospective buyers of purchasing their dream home.
“Make no mistake, NSW Fair Trading is watching and rogue operators will be held accountable.’’
Underquoting is a breach of the Property, Stock and Business Agents Act 2002. Section 73 prohibits an agent falsely underestimating the selling price of a property.
Agents who engaged in this illegal practice could face a maximum penalty of $22,000, Mr Mason-Cox said. “NSW Fair Trading also has the power to cancel or disqualify an agent, depending on the seriousness of the offence,’’ he said.
During 2014, NSW Fair Trading has conducted several operations targeting the real estate industry. Nearly 440 real estate businesses have been inspected.
Those investigations generated 111 fines, totalling $121,000 against real agents for offences including contravening the rules of conduct, individuals working or advertising without a license and failing to supervise staff and the business.
“NSW Fair Trading will continue to take an active role in the industry and more operations, such as Gavel are planned for the inner west of Sydney shortly,’’ Mr Mason-Cox said.
“Legitimate real estate operators have nothing to fear. “But we will not hesitate to discipline agents found to be committing breaches of the consumer protection legislation.’’
So far this year, three real estate agents have been convicted of trust account offences, and ordered to repay a total of $530,651.65 to the Property Services Compensation Fund.
Rachael Jena Kwawegen, was convicted in Parramatta Local Court on 16 September 2014 of misappropriating over $1,000,000 of client trust account funds held by Strata Agency Pty Ltd. She was sentenced to 15 months imprisonment.
Louise Catherine Sultana, the director and company secretary of BLM Enterprises trading as Century 21 Lifestyle Hawkesbury, was convicted in Parramatta Local Court on 13 February 2014 of misappropriating $208,639.51 from her company’s sales trust account and $55,062.14 from her company’s rental trust account. She was also convicted of failing to lodge rental bond funds totalling $66,650. On appeal to the District Court, on 13 June, Ms Sultana was given an 18 month suspended sentence and placed on a good behaviour bond.
Glenn Raymond Boatswain, the sole director of GLMP Pty Ltd trading as Boatswain Commercial & Industrial Real Estate, was convicted in Bathurst Local Court on 13 June 2014 of misappropriating $225,323.16 of client trust account funds. He was sentenced to 12 months imprisonment to be served by way of home detention and be eligible for parole after nine months.