1 week Ago By Alesha Capone
The Victorian government has made the Consumer Affairs Victoria underquoting task force permanent but there are fears underlying legislation needs to be strengthened. Experts have warned the Victorian government that it needs to beef-up its “fundamentally flawed” underquoting legislation. Without doing so, they fear the Allan government’s decision earlier this week to make the Consumer Affairs Victoria’s underquoting task force permanent — at a cost of up to $2.
2m per year – will make little to no difference to the property market. The CAV task force was initially established as a two-year temporary measure, and has received more than 2800 reports, from both members of the public and real estate agents, since it began. RELATED: Melbourne auctions: Pundits call on Victorian government to tighten auction rules Short Stay Levy Bill: New tax on Airbnb, Stayz homeowners welcomed by Vic industry Melbourne: Investor share of market falls after Housing Statement hits ability to raise rents However, industry figures ranging from agents to buyer’s advocates have signalled that anti-underquoting laws introduced in 2017 remain too weak to address the issue, despite a $39,500 maximum fine for guilty parties.
Last year, the state government’s Housing Statement announced it would impose tougher penalties for breaking the law, including taking commissions away from underquoting agents, echoing a 2016 commitment to do the same thing. But these measures are yet to be introduced, with the state government unable to comment on an expected timeline when contacted by the Herald Sun. So far, the task force has monitored more than 1900 sales campaigns, attended more than 200 auctions and issued more than 320 warnings and fines totalling more than $1.
6m. It has launched criminal proceedings against three Melbourne real estate agencies. Some agents believe underquoting remains rife in their sector.
But Keatings Real Estate Woodend’s managing director, John Keating, said the rules around underquoting remained “too easily circumvented”. “The legislation was fundamentally flawed from day one and remains so, so putting people in to police it has been relatively ineffective,” Mr Keating said. “There’s nothing in the legislation to stop vendors changing their reserve at any time.
” Mr Keating said the law should be amended to require owners’ reserve prices to be included in pre-auction advertising, something he has done for more than 150 of his agency’s auctions. He this would help to cut back on “step quoting”, a practice that involves an initial price range being increased if there’s a lot of interest shown in a home. Mr Keating said that without this, the “disgraceful” practice of underquoting would continue.
“It’s out of control, what the authorities are doing is not working and thousands of people are still being duped every weekend,” he said. Property Investment Professionals of Australia board member and buyers’ advocate Cate Bakos wants changes made to Victoria’s underquoting laws. Property Investment Professionals of Australia board member and buyers’ advocate Cate Bakos welcomed the decision to make the task force permanent, but also noted there were problems with the “really clunky” legislation.
Ms Bakos said there were no rules to stop owners from changing their reserve price right before an auction, often with no forewarning for agents. She said the legislation should be amended to stop reserves being changed a minimum of three business days before an auction. Ms Bakos said heavier fines were also needed for underquoting agents.
“I don’t think the fines are all that punitive to be honest, some agencies would chalk it up to the cost of doing business,” she said. Apollo Auctions Victoria director and auctioneer would like to see bidders required to register before all Victorian auctions. Andy Reid Picture: Stuart McEvoy.
Apollo Auctions Victoria director and auctioneer Andy Reid said he would like to see more consultation with the industry on the legislation. He suggested making it mandatory for all bidders to register for an auction, similar to NSW’s system. Mr Reid said the taskforce needed to attend far more auctions than the 200 it has checked out.
“In two years, is that really anything to brag about, when the number of auctions is 1000 on some weeks in Victoria?” Mr Reid said. Property Mavens chief executive and senior buyers’ agent Miriam Sandkuhler described the CAV task force as “incredibly slack when it comes to the number of agents operating without a licence”. In Victoria, real estate agencies must have at least one physical office within the state where someone who holds a current, individual estate agent’s licence works.
Property Mavens director Miriam Sandkuhler wants the CAV to crack down on licence lending. Picture: Beth Jennings. However, Ms Sandkuhler said there were many agents engaged in licence lending, an offence involving a licenced Victorian real estate agent allowing, or helping, a non-licence holder – often from interstate – to use their permit to act as an agent.
“We have a prolific problem with licence lending,” Ms Sandkuhler said. Ms Sandkuhler said she, and others, had reported licence lending “time and time again and Consumer Affairs does nothing”. She said this disadvantaged buyers who unknowingly engaged so-called agents engaged in licence lending.
“They are at risk of dealing with someone who is inept, incompetent and not adequately trained, putting their investments at risk,” she said. The underquoting task force has attended more than 200 auctions across Melbourne. Picture: NCA NewsWire/Max Mason-Hubers.
A CAV spokesperson said that last Saturday, the task force attended auctions in Essendon, Essendon West, Strathmore, Avondale Heights, Airport West, Ascot Vale, Moonee Ponds and Keilor East. “Our underquoting task force uses market analysis and intelligence to monitor for potential underquoting, making our property market fairer for buyers and industry professionals who are doing the right thing,” the spokesperson said. “We inspect hundreds of real estate agencies to obtain sales files for review to crack down on underquoting.
” For people hoping to buy a home, underquoting can cause extra stress. -An Estimated Selling Price (ESP) being unreasonable and not based on comparable sales -Non-compliant comparable properties listed on a statement of information (SOI) -Failure to include an SOI with an online advertisement -An ESP being lower than an offer that had been rejected by the vendor -A property’s advertised price being modified by words or a symbol -An advertised price being lower than the ESP -The auction authority, or sales authority, not getting updated following an amendment to the ESP -An ESP not being provided by agent, before obtaining a vendors’ signature Source: Consumer Affairs Victoria Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
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