National real estate agency enters into enforceable undertaking

5 March 2018

A national real estate agency has entered into two enforceable undertakings with the Office of Fair Trading (OFT), for alleged breaches of the Australian Consumer Law and the Property Occupations Act 2014.

Between November 2016 and June 2017, Purplebricks Australia Pty Ltd, entered into agreements with consumers who were not made aware of the terms of the fees charged. Consumers were also misled about additional services offered by Purplebricks, despite the agency advertising ‘low, fixed fees’ for their services when selling property.

Also during this period, Purplebricks failed to fulfil some of its regulatory obligations about use of appropriate accounts software, use of a non-Queensland bank account and notification of substitute licensees and other places of business.

The OFT received several complaints from consumers alleging false and misleading representations on the Purplebricks website and advertising regarding their fees, particularly that the fixed fees were payable regardless of whether a property was sold, or their services were cancelled.

The enforceable undertakings, which will remain in force for three years, require Purplebricks to pay a penalty of $20,000 and ensure that all representations made by the business, particularly those concerning fees and additional services, are not false or misleading.

The OFT acknowledged prior to entering into the enforceable undertaking, Purplebricks had amended their appointment forms and processes to ensure consumers were aware of the terms of their fixed fee charges, and amended their website and advertising to ensure consumers were not further misled.

Fair Trading Acting Executive Director Craig Routledge said the enforceable undertaking showed the business and its directors were willing to work with the OFT to ensure obligations were met.

“Queenslanders have the right to expect that real estate agents will make accurate and honest agreements with their clients,” Mr Routledge said.

“If real estate agents breach laws and industry regulations, the OFT will not hesitate to investigate and pursue if required.”

The OFT conducts a series of proactive compliance operations each year, targeting malpractice in the real estate industry. Real estate agents and consumers may report suspected misconduct directly to the OFT.

Associations and consumers may report misleading representations to the OFT by lodging a complaint at www.qld.gov.au/fairtrading or by calling 13 QGOV (13 74 68).

An enforceable undertaking by the OFT is an alternative to court action where a breach of legislation is alleged. It is considered a legally binding agreement, which if broken can result in court action being commenced for breaking a term or condition of the undertaking, as well as seeking orders from the court to enforce the original undertaking.

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