PLEASE NOTE: This article was published on the date listed below and may now contain information that has since been updated or changed. We have retained this article as it may still contain helpful comments. However, we advise you to make an appointment to see us for the most up to date information on this topic.

August 2008

Buying or Selling

In a recent case, a Real Estate salesperson negotiated with the owner of a cliff top property to sell it for $2.575 million.

The salesperson (who was the owner’s agent) knew the buyer to be a property speculator in the habit of portraying that he wanted to live in the property and make it his home so as to buy cheaply and resell quickly at a profit. The house was re-sold by the same Real Estate agency some months after settlement for $3.555 million - almost $1 million more.

In the High Court, the Real Estate agency was found guilty of misleading and deceptive conduct under the Fair Trading Act 1986 and fined $675,000. The agency appealed to the Court of Appeal, which agreed that the conduct was misleading and deceptive but reduced the fine to $225,000. The big discount on the fine was because the Court found that the owners would have accepted $2.8 million even if they had known a property developer was buying their house.

The important thing to remember is that the Fair Trading Act is a very useful tool if you think you may have been mislead into buying or selling at a price that turns out to be blatantly wrong. But of course there is no substitute for doing your homework first, getting a registered valuation and getting our advice before you sign on the dotted line.