Real estate agents in New South Wales could be fined $110,000 or more if they sell properties under new laws intended to stamp out price gouging and increase transparency for buyers.
The working government of Minns has started to consult with the property ownership sector in preparation for drafting the law that will stop the laws that do not have a reason to be recognized by the Parliament next year.
Underquoting is a tactic used by some agents to advertise a property for less than the estimated sale price or the owner’s claim price and outbid the competition.
It’s since the Federal Consumer Act made no sense and most states, including NSW, have additional regulations to further discourage the practice.
However, the NSW Minister for better regulation and fair trade, Anoulac Chanthivong, says there will be a link with buyers and improve transparency.
“Our message is that we have heard you. We have created a package of reforms and are now consulting the sector to ensure that we get the balance between the industry and practical industry for the industry,” he said.
“The proposed laws will ensure the NSW Fair Topping Traderforce of Merchant Owners takes meaningful action against misleading advertising and transactions in NSW.”
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The Strata and Property Taskforce, set up earlier this year, has yet to find instances of alleged underquoting, including High profile case involving Sydney Agent Joshua Tesolin.
In August, NSW Fair Trading announced it had suspended the license of real estate firm Tesolin pending what it said were “serious and repeated” breaches of the law.
This includes alleged price gouging of more than 100 residential properties, the fair trade said.
The government proposes to increase fines for real estate agents who earn from $22,000 to $110,000 or three times the agent’s commission, whichever is greater. It is also recommended to order the prices of the lists.
Agents are also required to publish an “information statement” intended to help buyers understand how the sales price is calculated and the sales prices and the sales prices and suburb median.
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NSW Fair Trading, the State’s consumer regulator, can take more disciplinary action against agents, including by publishing details of underquoting breaches.
A standalone offense will be created for agents who fail to meet the continuing professional development requirements for agents.
The NSW government said it planned to model the law on laws passed in Victoria in 2016, which it said now “in most land industries.
Last month, the Victorian government announced further self-reinforcing restrictions, to ensure agents use the most appropriate local price before the auction.
In NSW, the details of the government’s underwriting reforms – and how far the new laws will go – will be determined by consultation on properties and opposition or crossbench amendments.