STATUTES THAT AFFECT THE AGENT

The agent is affected by consumer law and anti discrimination law when selling a property by tender.
Consumer Law .
There are two main statutes that affect the stock and station agent:

• Australian Consumer Law (Cth)
• Fair Trading Act (NSW)
• Anti Discrimination Act 1977 (NSW)
• Business, Rules of Conduct
• Privacy Act 1988 (Cth)

Australian Consumer Law (Cth) (ACL)

The ACL is powerful Commonwealth legislation that covers the activities of real estate agents when acting as companies, incorporated businesses and individuals . The Australian Competition & Consumer Commission (ACCC) and the Real Estate Institute of Australia (REIA) have prepared a handbook “Fair and Square” for agents on consumer law.

Real estate agents operate in a highly competitive marketplace. The Trade Practices Act encourages vigorous competition in all markets including the property market, but also protects consumers dealing with the real estate industry. Industry participants must ensure they give prospective buyers the full picture, enabling them to make informed decisions when buying property.

Anti-competitive conduct is detrimental to the interests of both businesses and consumers and can give one business an unfair advantage over its competitors. The Act prohibits all businesses, large or small, from engaging in misleading or deceptive conduct and anti-competitive behaviour such as price fi xing, market sharing, exclusive dealing and third line forcing.

The Act has provisions covering unconscionable conduct, recognising that
small businesses may be at a disadvantage when dealing with larger businesses. Real estate agencies operating within a franchise system are also protected under the Franchising Code of Conduct.

The ACCC encourages the real estate industry to think of the Act as an important management tool. Compliance with the Act is good business practice and can mean increased success and profitability. Knowing their rights and obligations under the Act will help small businesses to be professional in their dealings with other businesses and avoid problems.

This summary of do’s and don’ts for real estate agents. The page references are for the publication Fair and Square. The web address for downloading this document is given below.

Don’t mislead people by:

• making statements that are untrue (p. 10—Playfair) making predictions about trends in property values that you can’t substantiate (p. 12—Predictions)
• making unrealistic valuations or market appraisals (p. 12—Valuations and appraisals).
• claiming non-existent sponsorship, approval or affi liation with another company
• (p. 13—Sponsorship claims)
• offering gifts, prizes or items that you do not intend to supply (p. 14—Gifts and prizes).
• offering gifts or items when their cost is disguised in the selling price (p. 14—Gifts and prizes)
• advertising goods or services at a discount price, without intending to supply them at this price (p. 14—Bait advertising)
• dummy bidding (p. 15—Dummy bidding)
• offering goods or services that aren’t available in reasonable quantities (p. 16—Availability of goods and services)
• staying silent when you have a duty to disclose something (p. 16—Remaining silent).
• Don’t act unconscionably. Avoid: harassment and high-pressure sales techniques (p. 18 —Undue harassment and coercion) taking advantage of vulnerable or disadvantaged consumers (p. 23—Consumer transactions) taking advantage of weaker businesses (p. 21—Business transactions).

Remember that franchisees are protected and:

• prospective franchisees must be given all the necessary information to help them make an informed decision, including a disclosure document about its commercial viability (p. 25—Disclosure requirements) existing franchisees should be treated fairly as set out in the Franchising Code of Conduct (p. 25—Franchising Code or Conduct).

Remember that fees are negotiable and:

• real estate agents and their clients should be free to negotiate the types of listings, level of fees, etc. (p. 30—Listing)
• unless authorised by the ACCC, forcing agents to multiple list could be contrary to the law (p. 30—Multiple listing).

When selling land don’t:

• make false or misleading statements about the interest in the land (p. 34—Selling land), the characteristics of the land (p. 36—Characteristics of land), how the land can be used (p. 37—Use of land), or the existence of associated facilities (p. 38—Facilities)
• make vague statements about the location of the land (p. 35—Location)
• advertise or promote the land in any way that is misleading (p. 36—Advertising land).

Take care when quoting prices. Always:

• quote all mandatory price components including any GST (p. 39—Inclusive price, p. 40—Goods and services tax)
• state the amount of the deposit and repayments if you are providing finance on terms (p. 39—Full cash price)
• give a realistic average price of units or blocks (p. 40—Price range)
• advertise finance only if reasonable precautions have been taken to ensure that it is actually available (p. 41—Finance).

Don’t agree with other agents to:

• exclude or limit the dealings of one business with another (p. 7—Agreements)
• fix or maintain fees for services (p. 7—Agreements)
• recommend prices in a way that effectively fi xes the price of goods or services (p. 7—Agreements).

Attaching conditions to the supply of goods or services may contravene the
Act if:

• you supply goods or services subject to your client buying goods or services from a nominated third party (p. 8—Attaching conditions) for example, you supply goods or services only if your client doesn’t buy goods or services from your competitors, or upon other conditions that have the purpose or effect of substantially lessening competition (p. 8—Attaching conditions)

The bottom line

• An individual, another business, the ACCC or the minister can bring an action against you or your agency for breaching the Act (p. 43—Being taken to court).
• For conduct prohibited under Part IV (restrictive trade practices) of the Act, you personally face a maximum penalty of $500 000—and your company
• $10 million—for each breach (p. 43—Fines).
• For conduct prohibited under Part V (consumer protection) of the Act you personally face a maximum penalty of $220 000—and your company
• $1.1 million—for each breach (p. 44—Fines).
• A person or a business can apply to the court for an injunction or damages if you or your agency has breached Part IV and V of the Act. (p. 44—Damages).
• The court can order you to disclose information to the public or publish corrective advertising (p. 44—Injunctions and orders).
• The court can order you to return property, refund money, perform a specifi c act or rescind a contract (p. 44—Ancillary orders).
• If the ACCC brings an action against you it can also ask the court to make orders in favour of any named people who have suffered loss or damage (p. 45—Representative applications).

See www.acc.gov.au/content/index.phtml/itemId/322938/fromItemId/3737

There are equivalent rules and laws under the NSW’s Fair Trading Act. This covers anybody not covered by the Trade Practices Act such as sole traders working locally only.

Fair Trading Act 1987 (NSW)

The main law covering business behaviour in NSW is the Fair Trading Act 1987. Under the Act, amongst other things, it is unlawful to:

• make false claims about a product or service
• operate in a misleading or deceptive way, or in a way that is likely to mislead or deceive your customers. You are required to tell the truth to your customers and not hide any relevant information. This also includes advertising your business.
• take unfair advantage of vulnerable customers, which is also known as unconscionable conduct. This may occur where customers have no alternative than to do business with you (for example, you may be the only shop in a country town) or where you have a product or service that is in high demand, and you abuse your bargaining power. A common example of this is where customers are pressured to sign a contract that they can't understand and which includes unfair conditions.

A good way to check whether you are engaging in unconscionable conduct is to ask yourself - is there any significant difference in what my buyer will pay for the land compared with other stock and station agents in the district? (think of location, product/service, sales tactics and customers). If there is, then you need to think whether the differences are justified. It could be that you offer other benefits to your customers.

See: www.fairtrading.nsw.gov.au/business/runningabusiness.html

Anti Discrimination Legislation

The NSW Anti-Discrimination Board and the NSW Office of Fair Trading are working with real estate agents for a ‘Fair Go’ for buyers and sellers in the property market

The Anti Discrimination Act 1977 is administered by the Anti Discrimination Board (ADB). The law states that you must not discriminate against someone (treat them unfairly compared to others), or harass them, because of their:

• race (colour, nationality, descent eg Aboriginal descent, ethnic, ethno-religious or national origin)
• sex
• pregnancy
• marital status
• disability (physical, intellectual or psychiatric disability)
• homosexuality (both gay men and lesbians)
• age
• transgender (transsexuality)

It is also against the law to discriminate against a person because of the race, sex, pregnancy, marital status, disability, homosexuality, age or transgender of their relatives, friends or associates.

Agents and sellers should be aware that they may be liable for discriminatory acts, for example where the seller instructs an agent to only sell to white people and the agent carries out those instructions. In that case both the seller and the agent may be liable. It is no defence for an agent to say she/he was simply carrying out the instructions of the owner.

Direct and indirect discrimination

Direct discrimination is when a person is treated less favourably than another person because of their race, sex etc.

Indirect discrimination is where there is a requirement (a rule, policy, practice or procedure) that is the same for everyone, but which has an unequal or disproportionate effect on particular groups (for example, women, people of certain races, young people). Unless this requirement is ‘reasonable having regard to the circumstances of the case’ (Anti Discrimination Act) it is likely to be indirect discrimination.

Example

A real estate agent has a number of tenders from people wanting to buy the
same property. The agent’s policy is to rank applications by the income of applicants. Since some people from Indigenous backgrounds (for example) earn less onaverage than others, this policy may result in indirect discrimination. A fair selection process would be to rank people in order of tender price and/or when they lodge their application and then assess the first tender for their capacity to buy.

The Fair Trading laws

You must not engage in conduct that is, in the circumstances, unconscionable inconnection with the supply of goods and services to a customer.

Example

An Aboriginal person rings the stock and station agent about a property for sale. On the phone the agent tells the caller that the property is still available. When the Aboriginal
person goes to the agent to lodge a tender the agent informs them that it is no longer available. Then a non-Aboriginal person asks the same agent and is told that the property is available.

This may be both discrimination and misleading conduct. In an actual case like this, the Equal Opportunity Tribunal (now the Administrative Decisions Tribunal) ruled that the agent was liable under Anti-Discrimination law and awarded $6,000 damages against the agent.
Commonwealth laws on discrimination apply to the states and territories. The Sex Discrimination Act 1984 (Cth), Racial Discrimination Act 1975 (Cth), Disability Discrimination Act 1992 (Cth) make discrimination on grounds of race, colour, national or ethnic origin, sex, marital status, pregnancy, or disability unlawful.