Developers Beware…Of Your Marketing Agent’s Advertising!

Posted on March 2, 2009 by | 2 Comments

Tim O'Dwyer M.A., LL.B OPINION
by Tim O’Dwyer M.A., LL.B
Consumer Advocate

Real Estate Encyclopedia


Advertisements must be based in factThe Supreme Court of New South Wales recently ruled that the buyers of an off-the-plan property were entitled to a rescission of their contract and a deposit refund because the estate agent for the developer had engaged in misleading and deceptive conduct. These inexperienced investor-buyers had relied on baseless representations in newspaper advertisements that the value of the inner city terrace units being marketed by the agent would double in five years.

A major law firm soon issued a media release suggesting that, in a falling market, off-the-plan buyers might try to get out of deals done years earlier by relying on pre-contractual mis-representations. Property developers and their agents were warned “to carefully check the wording of their advertisements or other representations” to make sure they were “based in fact”, while any statements regarding future value must have a “reasonable basis” with further information being provided to qualify those representations.

However when sellers’ agents get found out on their porkies, some buyers will still settle but later sue the lying agent.

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  • http:// says:

    Very interesting post Tim, might make a few agents and developers look more closely at what they include in their marketing message. Is there Truth in Advertising?

  • http:// says:

    Yes i am having a problem with an agent in Wantirna South, VIC, because they signed us up to builders who changed the contract price after we signed. We were told by the agent when we gave her the holding deposit of $1,000 that it would ‘authorise’ a ‘fixed price agreement.’ The builder is using Special Conditions schedule 4 to argue otherwise. Despite this holding deposit receipt declaring a fixed price, the agent is now turning around and deferring responsibility saying we should have read the contracts;-( The builder is not starting building works until they get their ~$10,000 upfront. not exactly short change.

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