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Consumer Affairs Victoria (CAV) has withdrawn almost $30,000 in fines it had issued to prestige real estate agency Kay & Burton for underquoting and breaching real estate laws.
The agency was hit last year with a $9913 fine for underquoting a property on Rose Street, Armadale, which sold for $5.8 million at auction in March – $1.4 million above the top of the asking price range.
Kay & Burton were fined for underquoting this property in Armadale last year.Credit:Eamon Gallagher
Morrell and Koren buyer’s agent David Morrell later lodged a formal complaint against Kay & Burton selling agent Grant Samuel to the consumer watchdog.
CAV said in its original infringement notice that Kay & Burton had stated a selling price, or likely selling price, of $3.8 million to $4.1 million that was “less than the lower limit of the estimated selling price range of $4 million to $4.1 million in the engagement or appointment to sell”.
The watchdog had issued fines of the same amount over the sales of another property in South Yarra and one in Caulfield South.
But last week, CAV wrote to Kay & Burton’s lawyers, Kalus Kenny Intelex, in a letter seen by The Age, to say the watchdog has decided to withdraw the infringements and the matters are now finalised. CAV did not give a reason.
The interior of the home, as seen before its sale last year.Credit:Kay & Burton
Kay & Burton solicitor Jonathan Kenny said in a statement that the agency made a submission to CAV that none of the charges could be made out on the facts.
“My analysis of the facts was that there was no basis to bring the charges forward. Kay & Burton and its agents had properly and honestly discharged their duties in each matter,” he said.
Kay & Burton’s Samuel welcomed the decision.
“We always act with the highest integrity and were confident this was never a case of breaching the legislative requirements,” he said.
Morrell still thought the Armadale home had been underquoted based on the outcome of the auction and the property’s price range.
“Rose Street was the most disgraceful underquoting that I saw for the year and CAV’s response is more than disappointing,” he said on Tuesday, comparing the response to “a slap over the face with a wet lettuce”.
When a home is listed for sale, real estate agents must prepare a “statement of information” including an indicative selling price for the property, either as a single price or a price range of up to 10 per cent.
Underquoting can occur when a property is advertised at a price that is less than the estimated selling price, is less than the seller’s asking price or has already been rejected by the seller. However, underquoting is difficult to prove.
The Rose Street, Armadale, property on auction day.Credit:Eamon Gallagher
CAV declined to comment on the case.
The watchdog issued 47 infringements and 151 official warnings to eight estate agents for underquoting between July 2021 and June 2022.
CAV has taken court action and accepted enforceable undertakings from 13 real estate agencies relating to underquoting since 2015, with fines and court costs of more than $3 million in total.
The Victorian government is reviewing laws on underquoting and real estate agent conduct.
Real Estate Institute of Victoria chief executive Quentin Kilian did not comment on Kay & Burton’s case but said the body was adamant its agents had to follow correct policies and procedures when it came to underquoting.
“The buyer’s version of an overpriced property is often when they missed out on an auction, or once market forces … took it to a level they had not expected,” he said.
“To simply tag every single incident of a buyer-doesn’t-get-the-property-they-want as an improper process is a little bit of a nonsense.”
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