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No more price guides on auctions

Auctioneers and Real Estate Agents Beware – No more price guides or disclosure of reserve or other prices (whether by Auction or otherwise)

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From 1 December 2014, the Property Occupations Act 2014 will apply.  This legislation brings with it a number of significant changes to the former Act that governs real estate agents and auctioneers.

We have touched previously on the practical changes that come into play around the formation of Contracts themselves, but the purpose of this article it to highlight the new sections that now prohibit the disclosure of reserve or other prices for properties sold at Auction.

Section 214 now provides the following (our emphasis added):

214 Auctioneer not to disclose reserve or other price

(1) This section applies if residential property is to be, may be or

is being, offered for sale by auction (offered property).

(2) The auctioneer must not disclose to a person other than a

person acting for the seller in relation to the sale—

(a) the reserve price set for the offered property; or

(b) an amount the auctioneer considers is a price likely to

result in a successful or acceptable bid for the offered

property; or

(c) a price guide for the offered property.

Maximum penalty—540 penalty units.

(3) However, if during the auction, the reserve price is reached or

exceeded, the auctioneer does not contravene subsection (2)

only by disclosing, to persons present at the auction, that the

reserve price has been met.

Example of a disclosure that the reserve price has been met—

the auctioneer announcing during the auction that the property is on the

market

(4) Also, an auctioneer does not contravene subsection (2)(c) only

because a price or price range for the property is disclosed by

the auctioneer to an electronic listings provider to establish

search criteria for listing the property for sale on the

provider’s website or other electronic medium.

(5) However, subsection (4) applies only if the auctioneer is

satisfied on reasonable grounds that—

(a) the electronic listings provider will list the property for

sale on the website without disclosing the price or price

range; and

(b) the listing will include any statement prescribed under a

regulation.

(6) If an auctioneer gives a copy of a comparative analysis or a

written explanation (market information) to a seller under

section 213(4), the auctioneer must not give the market

information to a person without the seller’s written approval.

Maximum penalty—540 penalty units.

 

So, this means that Real Estate Agents and Auctioneers will need to review their advertising policies before 1 December 2014 to avoid being in breach of the Act and liable to financial penalties.  Care should be taken to ensure that any electronic listing providers do not disclosure the price guides despite that information being required in order for those providers to correctly categorise the property.

Similar restrictions now also apply to Real Estate Agents whether or not the property is to be sold at Auction. New section 216 provides (our emphasis added):-

216 Real estate agent not to disclose reserve or other price

(1) This section applies if residential property is to be, may be or

is being, offered for sale, whether or not by auction (offered

property).

(2) If the offered property is to be, may be or is being offered for

sale by auction, the real estate agent must not disclose to a

person other than a person acting for the seller in relation to

the sale—

(a) the reserve price set for the offered property; or

(b) an amount the real estate agent considers is a price

likely to result in a successful or acceptable bid for the

offered property; or

(c) a price guide for the offered property.

Maximum penalty—540 penalty units.

(3) If the property is not to be offered for sale by auction and the

seller has instructed the real estate agent not to disclose the

price at which the seller is willing to sell the offered property,

the real estate agent must not disclose to a person, other than a

person acting for the seller in relation to the sale—

(a) an amount the real estate agent considers is a price

likely to result in a successful or acceptable bid for the

offered property; or

(b) a price guide for the offered property.

Maximum penalty—540 penalty units.

(4) A real estate agent does not contravene subsection (2)(c) or

(3)(b) only because a price or price range for the property is

disclosed by the real estate agent to an electronic listings

provider to establish search criteria for listing the property for

sale on the provider’s website or other electronic medium.

(5) However, subsection (4) applies only if the real estate agent is

satisfied on reasonable grounds that—

(a) the electronic listings provider will list the property for

sale on the website without disclosing the price or price

range; and

(b) the listing will include any statement prescribed under a

regulation.

(6) If a real estate agent gives a copy of a comparative analysis or

a written explanation (market information) to a seller under

section 215(2), the real estate agent must not give the market

information to a person without the seller’s written approval.

Maximum penalty—540 penalty units.

 

It stands to reason that Agents will now have the interesting task of communicating responses to Buyer’s who request price guides or a fair indication of the price Seller’s want for properties if the actual asking price is not listed.

There are serious financial penalties for breaching these sections if complaints are enforced by the Office of Fair Trading so agents should take care to review their internal sales policies and procedures to comply with the new requirements.

Common Mistakes in Queensland Property Contracts {Watch this Video}

The most common error we are still seeing in Queensland Property Contracts is incorrect spelling of party names and leaving out middle names.  Not having the correct party details can cause problems with finance applications and can increase your costs by having to rectify the spelling on the Contract or to having the original Queensland Property Contract rescinded.  A very important step to get right.

A Buyer should also consider how they wish to purchase the property before entering  a Queensland Property Contract and are best to take advice from their accountant or solicxitor before doing so, amendments to Queensland Property Contracts after signing can once again incur more costs to you.

Another error we see is failing to disclose encumbrances on the Queensland Property Contract which are shown on the Title search.  These are items such easements and anything affecting the property should be disclosed.  A simple Title search which costs approximately $25.00 should be used by your real estate agent to ensure all the information on the Queensland Property Contract is correct.  This ensures certainty in the Queensland Property Contract and also ensures that the Buyer is not given any rights to terminate the Queensland Property Contract for the Seller’s failure to disclose this information.

Up until 1 December 2014 the correct sequence for a Queensland Property Contract is:

  1. Letter or statement directign the Buyer’s attention to the Form 30c Warning Statement;
  2. Form 30c Warning Statement;
  3. Contract;
  4. Form 14 Disclosure Notice (for a Community Titles Scheme Property).

This is set to change after 30 November 2014, keep a look out for our next blog post on this topic.

So there you have it, a short run down on simple mistakes we see in Queensland Property Contracts.

If you have any queries or wish to discuss your Queensland Property Contract please do not hestiate to contact us Ph: (07) 5413 9206

 

 

 

Appropriate timeframes to request on Property Contracts in Queensland {Watch this video}

What is an appopriate amount of days to request for settlement, building and pest and finance on property contracts in Queensland?  This is a question we get asked frequently.

Most property contracts in Queensland settle 30 days from when the Seller signs the Contract and within the Contract there are very important dates to keep track of.

First is the buidling and pest inspection date, you can nominate how many days you require to engage an inspector, we suggest 14 days.

The next condition is finance.  If you have pre approval from the bank, 14 days should be sufficient however if you are a first home buyer or do not have pre approval then we suggest 21 days to obtain finance.

If you have any questions about conveyancing in Queensland or would like to obtain a quote for conveyancing on a property contract in Queensland please give us a call on Ph: (07) 5413 9206.