On 1 May, amendments to the Estate Agents Act 1980 (Vic) took effect in Victoria. The new legislation is designed to address the allegedly widespread practice of underquoting in the Victorian real estate industry. The new laws strengthen existing prohibitions on underquoting, and apply only to residential properties.
The legislation requires, amongst other things:
- The estimated selling price to be reasonable, and within a 10% range, i.e. $500,000 to $550,000
- The estimated selling price not to be less than the seller’s asking price, or a price in a written offer which the seller has rejected
- Agents to change the estimated selling price if it is no longer reasonable
Agents who do not comply with the new laws may face fines in excess of $30,000. For more serious offences, agents also risk losing any commission received for the sale of a property. The new laws only apply to sales authorities signed on or after 1 May 2017.
We expect to see more real estate agents being prosecuted in Victoria as a result of the changes and will keep a close eye on any increase in notifications/claims for future updates.