The Minns government in New South Wales is preparing to introduce tough new legislation that will see real estate agents facing fines of up to $110,000 for underquoting property prices.
This significant crackdown aims to eliminate misleading price estimates that have plagued the property market, creating frustration for prospective buyers and undermining trust in the industry.
Modelled on Victorian Success
The proposed underquoting laws are directly modelled on legislation that Victoria passed in 2016, which the NSW government notes has become 'widely accepted' by the real estate industry across the southern state.
Minister for Better Regulation and Fair Trading Anoulack Chanthivong emphasised that these reforms are designed to restore confidence and improve market transparency. 'Our message is that we hear you,' Chanthivong stated, confirming the government has developed a comprehensive reform package and is now consulting with the property sector.
Strengthening Enforcement and Penalties
Under the proposed changes, the maximum fine for underquoting would increase dramatically from $22,000 to $110,000, or three times the agent's commission - whichever amount is greater.
The legislation would also empower NSW Fair Trading's Strata and Property Taskforce, established earlier this year, to take more decisive action against misleading conduct in property advertising. The taskforce has already demonstrated its effectiveness by uncovering several instances of alleged underquoting, including the high-profile case involving Sydney agent Joshua Tesolin.
In August, Fair Trading suspended Tesolin's real estate licence pending possible disciplinary action for alleged 'serious and repeated' breaches of the law, including underquoting the selling price of more than 100 residential properties.
Key Features of the Proposed Reforms
The government's comprehensive approach includes several important measures:
- Mandating clear prices on all property listings
- Requiring agents to publish a 'statement of information' explaining how selling prices were calculated
- Granting NSW Fair Trading authority to publish details of underquoting breaches
- Creating a standalone offence for agents who fail to meet professional development requirements
These measures are intended to provide prospective buyers with better information, including comparable sales data and suburb median prices, enabling more informed purchasing decisions.
The NSW government expects to introduce the legislation to parliament next year, following consultation with property and real estate industry stakeholders. The final details of the reforms will be shaped by this consultation process and any amendments proposed by the opposition or crossbench.
