Consumer Affairs Victoria launches legal action against Hocking Stuart Yarraville and O'Brien Real Estate Croydon
Consumer Affairs Victoria has launched legal action against Hocking Stuart Yarraville and O'Brien Real Estate Croydon in the Federal Court. The two agencies were penalised for underquoting properties contrary to its actual selling price. Hocking Stuart Yarraville has underquoted six properties while the O'Brien Real Estate Croydon underquoted seven homes.
In late 2015, Hocking Stuart Yarraville advertised a Footscray home for more than $1 million. However, it was already sold 18 months earlier for $1.3 million. In December 2015, it was sold for $2.1 million when it went under the hammer against a reserve amount of $1.5 million.
Both agencies admitted their engagement to misleading and false conduct. They were ordered to pay for financial penalties up to $45,000 to the Consumer Law Fund and to display a notice in their receptions. The display should indicate that they acknowledged the contraventions.
Consumer Affairs Victoria has documents of emails from Hocking Stuart's directors Leo and Leigh Dardha. One of the emails was emailed to the vendor of 1 Gordon Parade, Yarraville. The sender asked that the property's quote be increased from $800,000-$850,000 to $890,000. The email indicated that the starting price would be declared at more than $850,000 to get people through the door. However, the price would be bumped up in the second week of the campaign. The vendor's reserve was $1 million but it cost $997,500 after the auction in December 2015. Leo Dardha said that his team sincerely regretted the mistakes and has promised that it would not happen again.
O'Brien Real Estate documents showed that it has advertised the Croydon property for more than $690,000 despite the $805,000 price that the vendor wanted. Fletcher & Parker Balwyn were also under investigation for underquoting 25 eastern suburbs homes.
Acting Consumer Affairs Minister Lisa Neville said that underquoting is not a smart sales tactic and it is illegal. She said that Victoria home buyers deserve a fair go on one of the biggest purchases of their life.
