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Misleading conduct and representations
It is an offence under state and federal law for an estate agent or agent’s representative to mislead or deceive a client (seller or landlord) or a consumer (buyer or tenant) by their conduct or representations.
Representations are advice, advertising or other statements made by an agent. Whether they are verbal or in writing, they must be accurate and complete. ‘Conduct’ covers more than representations.
Being silent or not providing all relevant facts can be misleading in certain circumstances. The right time to disclose information depends upon the type of information. For example, some facts are best disclosed at the start of a marketing campaign and others when a buyer or tenant is genuinely considering a property.
An offence can occur whether or not an agent intended to mislead or deceive. What is important is the impact or likely impact on a client or consumer.
Agents and their representatives should act honestly and ensure their advice and advertising truthfully and fairly describes a property.
A property’s characteristics should not be misrepresented. These include:
- size
- features and fixtures
- location
- future developments and potential
- price.
Photographs that give the wrong impression of a property should not be used. These include those that:
- are accompanied by comments or other photographs that suggest a property has views or is close to amenities such as parks, schools, transport or recreational facilities
- are digitally or otherwise enhanced to hide undesirable features or promote other features.
A principal agent or officer in effective control is responsible for the accuracy of their agency’s advertising.
False testimonials
If you use testimonials such as quotes or other comments from satisfied clients to promote your agency’s services, they must be accurate. Testimonials that are exaggerated, misleading or false breach the Fair Trading Act 1999 and the Commonwealth Competition and Consumer Act 2010.
Do not:
- invent quotes from genuine or fictitious clients
- make false or misleading comments about actual comments made by clients
- use testimonials from genuine clients that are false or misleading.
Price advertising
An agent must not misrepresent the price of a property for sale or lease. The advertised price must be fair and reasonable and reflect the current market value and expectations of the seller or landlord.
Any changes during a marketing campaign likely to affect the selling price must be reflected in the advertised price. For example, if a higher offer is made for a property and rejected, the advertised price must be updated unless the seller or landlord changes their mind. Other interested buyers or tenants should also be given an opportunity to review their offers.
Properties can be advertised for sale at a single price or a price range. Rental properties are usually advertised stating the weekly or monthly rent.
Underquoting
Marketing a property for sale at a price that is less than the seller’s asking price, or if this is not known, the agent’s estimate of the likely selling price, is commonly known as underquoting.
The seller may provide an asking price in writing. Rejecting an offer is another example of how a seller might indicate a price they are willing to consider.
The agent’s estimated selling price is the price that a ‘willing but not anxious’ buyer is prepared to pay. It must be realistic, up-to-date and a price at which you genuinely believe the property may sell.
If you quote or advertise a price range it must not include a price at which the property is not likely to sell, such as where the bottom price in the range is less than the seller’s asking price or your estimated selling price.
For more information on the circumstances when price advertising is misleading, and the things agents should do to avoid underquoting, view our Guidelines for price advertising and underquoting (PDF, 1.6MB).
Agency identification
All agency advertisements must include the name or logo of the agency. Some advertisements must also give an address for the agency.
Last updated: 16/03/2012