Consumers will receive greater protection when purchasing a property, after a bill strengthening the law against underquoting passed the NSW Parliament today.
Minister for Innovation and Better Regulation Victor Dominello said the reform fulfils a NSW Government election commitment.
“The NSW Government committed to overhauling the current laws to crackdown on the practice of real estate underquoting – and we have delivered,” he said.
“Underquoting is illegal and misleads potential buyers looking for their dream home.”
Amendments to the Property Stock and Business Agents Act 2002 include:
- Agents will be required to provide evidence of their estimated selling price to the vendor and this estimate must be stated in the agency agreement;
- When marketing a property an agent must only use the estimated selling price provided in the agency agreement;
- Estimated selling price can be a single figure or a price range. If a price range is used, the highest price must not be more than 10% higher than the lowest price;
- Advertisements and representations that say “offers over” or “offers above” or any similar statement will be prohibited;
- Agents will be required to keep a register of prices quoted on a property whether these are provided to the vendor or prospective purchasers.
In addition to the existing penalty of $22,000, agents found guilty of underquoting will now be liable to forfeiture of any commission or fees from the sale.
“There have been no successful prosecutions related to underquoting made under this Act in 13 years, so this reform is long overdue,” Mr Dominello said.
NSW Fair Trading and REINSW are working in partnership to prepare real estate agents for the new laws, which take effect on 1 January 2016, with information sessions already underway.