Today will be a significant day for Real Estate Licensees as the new amendments to the Fair Trading Act 1986 come into effect. Real Estate Licensees will be required to comply with the Real Estate Agents Act 2008, their Code of Conduct and the new amendments to the Fair Trading Act, which among other things, creates a new offence that prohibits the use of unsubstantiated representations.
In short, an unsubstantiated representation for a Real Estate Licensee could include any claim made in relation to the sale or purchase of a property that does not have any reasonable basis. It does not matter that the claim is, in fact, true.
An unsubstantiated representation can occur in a Real Estate Licensee’s website, marketing brochures, advertisements and verbal statements. This raises a large red flag for the branch owners and operators of Real Estate Agencies that can be held accountable for all of its employees’ verbal and written statements made in the office and out “in the field”. For branch owners and operators it would follow therefore that staff education will be the key to controlling and managing your liability.
Individual Real Estate Licensees face fines of up to $200,000 per offence and Real Estate Agencies up to $600,000 per offence.
Real Estate Licensees should consider reviewing their insurance policies to assess their current level of insurance cover given the dramatic increase in fines, and the need for both professional liability cover and statutory liability cover since this later category of insurance policy covers unintentional breaches of legislation, like the Fair Trading Act.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:
Steven Lee
09 379 0055 or 03 477 8870
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.