Westwood Conveyancing

NEW REAL ESTATE LAWS IN NSW

Sadly, consumers need to be as careful as ever.

On September 1, 2003 new real estate laws came into effect in NSW.

At the time it was hailed as the biggest changes in more than 60 years with the new laws thought to offer protection for real estate consumers against unethical conduct.

However, such a claim is far from correct.

Consumers still face great risks when making what is, to most, the biggest financial transaction of their lives. Yes, they now have increased protection, but the new laws fall well short of what should have been legislated.

The main reason for the shortcomings in the new laws is that the NSW Government spent too much time listening to real estate lobby groups and not enough time listening to consumers and their advocates.

This aside, the new laws are a positive step forward in the battle for consumer rights in real estate.

The positive points in the new laws included the following:

Dummy Bidding is illegal – well, sort of.

Under the Crimes Act it has always been illegal – it's called 'obtaining a financial advantage by deception'. But under the real estate laws, they change its name from Dummy Bidding to Vendor Bidding.

Now, all bidders have to register before an auction and are then allocated a number. Only one dummy bid is allowed at each auction and this must be announced by the auctioneer and declared as a Vendor Bid.

Will it work? Not according to some people who are asking: "What's to stop a dummy bidder just registering?" After all, dummy bidding is such an essential part of the auction process that some agents even had dummy bidders on the payroll. In Victoria, at least one agent (Castran Gilbert in South Yarra) was invoicing home-sellers for the cost of paying dummy bidders.

Agents are certainly going to be more careful, at least in the short term. If the Department of Fair Trading is serious and the rumours of 'auction police' (as their new inspectors have been dubbed) are true, then a few fast prosecutions will convey the right message to offending agents.

Price Quoting. Agents are now forbidden from giving false high quotes to sellers and false low quotes to buyers.

This will make it harder for many agents to win 'listings' by using that common trick known in the industry as 'buying the listing' – promising a false high price in order to entice sellers to sign up with the agent.

Agents can be asked by the Department of Fair Trading to justify their quotes.

Advertisements saying 'price range' or 'offers above' are supposed to be illegal. The price at which a property is advertised must be a price at which the owners are prepared to accept – unless, of course, they receive a higher offer.

Selling Agreements. There is now a one-day cooling off period. It's woefully inadequate, but at least it's something.

These laws may be the biggest changes in 60 years, but sadly they are just crumbs. When it comes to rights, the agents still get most of the loaf. Consumers need to be as careful as ever.

If you ever have any concerns on the behaviour of real estate agents or think there has been any untoward or illegal practices performed and need advice then please give us a call.

Source  :  http://www.jenman.com.au/news_item.php?id=112

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