by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
It’s not often that I have to agree with the Real Estate Institute of Victoria (REIV), but they have a point when they question the competence and resolve of Consumer Affairs Victoria (CAV).
“Victoria’s real estate industry has moved to defy state regulators over the illegal practice of underquoting, with agents told to ignore tough new guidelines aimed at curbing the practice…In an extraordinary move, REIV chief executive Enzo Raimondo said he would advise his member agents to ignore key recommendations from the regulator, Consumer Affairs Victoria.”
Consumer Affairs Victoria has always played the role of “toothless tiger” when it comes to policing the real estate industry. My own observations confirm that CAV is only savage when acting upon complaints from the REIV regarding estate agents who buck the system, or who are dobbed in by disgruntled estate agent competitors. Consumers aren’t really catered for at all.
In his article Schneiders notes that:
“The law requires price estimates to be based on what “a willing but not anxious buyer” would pay, and forbids agents from advertising properties for less than their own estimates. But it has failed to stop rampant misquoting of prices. A survey by The Age of more than 800 property auctions in April and May this year found they sold for an average of 21.2% more than their advertised prices. Despite this, there has been only one prosecution for underquoting since the law was passed in 2004 — prompting claims it has not been applied or policed strictly enough.”
Add to this other crimes, including dummy bidding, contract theft, and criminal deception committed by estate agents on a regular basis and one quickly realises that CAV is quite useless. No wonder the real estate industry regards CAV as little more than a small speed hump along the commission superhighway.
So what did CAV do that caused estate agents to revolt, and prompt the REIV CEO to call on estate agents to defy CAV? It announced that it was going to try harder to address underquoting. The CAV Director, David Cousins spoke “fightin’ words” when he he announced:
“We think the industry has had plenty of notice,” Mr Cousins said. “It is now being put on notice. Should we see breaches of law that are just not inadvertent and minor, we will take fairly firm legal action now.”
I don’t know what “fairly firm” legal action means, but it does suggest that it is on the lesser side of “firm”. No wonder Enzo and his cronies are prepared to publicly thumb their noses at CAV.
It makes it all the more hypocritical when, in the same article:
“Mr Raimondo said the regulator had failed in its duty. ‘CAV, if they have responsibility for enforcing the law, should do precisely that.'”