Hoskins Maroondah fined almost $900,000 for underquoting 24 properties
A real estate agency operating in Melbourne’s outer east has been hit with one of the state’s biggest ever penalties for underquoting, as well as misleading its own clients to increase commissions.
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A Maroondah real estate agency has been hit with one of Victoria’s largest ever financial penalties for underquoting offences, including committing the “unconscionable” act of misleading clients to boost commissions.
The Federal Court has ordered Hoskins (Maroondah) Pty Ltd and its director Brent Robert Peters to pay $860,000 in fines, $29,550 in compensation to two vendors and $10,000 in costs to Consumer Affairs Victoria — totalling $899,550.
Fletcher & Parker Balwyn incurred a record $880,000 fine for underquoting 22 properties, plus $40,000 in costs, in late 2017.
Court documents show Hoskins Maroondah was found to have advertised 24 properties in Croydon, Croydon Hills, Ringwood, Ringwood North, Mooroolbark, Park Orchards, Warranwood and Wonga Park for much less than they expected them to sell for, in 2015 and 2016.
Hoskins also engaged in “conduct that was … unconscionable” by telling two vendors their Croydon properties would sell for much less than the agency believed they would, in order to earn “incentive commissions” when they achieved much higher prices.
Mr Peters was found to have aided and abetted these dodgy acts.
Justice Simon Steward said in his judgment that in September 2015, Hoskins Maroondah told one of the vendors it “genuinely believed” their Cass Ave property would sell for “an amount around or not substantially above $520,000”.
But a “Nearest to the Pin” game played within the agency reflected an average estimated selling price of $647,000, and the agency received buyer interest above $600,000.
A director of the agency also expressed concern that the $495,000-$550,000 advertised range was too low and made Hoskins Maroondah looks like “shifty underquoters”.
The three-bedroom house sold for $677,000 on September 22, 2015, CoreLogic records show.
Justice Steward said the vendor of this property “trusted and relied on Hoskins Maroondah’s superior knowledge and expertise”, but was misled and ultimately could have received a similar service for “a much lower price”.
Michelle Sharpe, for CAV, told the court on Thursday that Hoskins Maroondah’s conduct was “the most egregious” of the five Melbourne agencies to appear before the Federal Court for underquoting offences since 2016.
The others were Fletcher & Parker Balwyn, Barry Plant Mt Waverley (fined $720,000 for underquoting 20 properties), Hocking Stuart Richmond ($330,000 for 11 properties), and Hocking Stuart Doncaster ($160,000 for nine properties).
Dr Sharpe said not only did Hoskins’ offending involve more properties than the others, the agency was the only one found to have committed “unconscionable conduct” by misleading clients to increase commissions.
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CAV launched action against Hoskins Maroondah and Mr Peters in December 2017, as a result of its Taskforce Vesta crackdown on underquoting.
Stephen Devlin, for Hoskins, said the agency and Mr Peters had displayed “a commitment to work with CAV” since then, and “introduced compliance measures at that time, rather than wait for a court order”.
“Mr Peters has lived with this for three years,” Mr Devlin said.
Hoskins Maroondah said in a statement that it accepted the penalty and acknowledged “mistakes were made in 2015 and 2016”.
“Upon first receiving correspondence in regards to this matter from CAV, we implemented a review of all residential property files to ensure that our agency complies with the relevant legislation,” the statement said.
“We (also) implemented a strict compliance procedure, along with training, to rectify this.”
CAV director Sam Jenkin said the outcome sent “a strong message to rogue real estate agents (that) misleading sales practices will not be tolerated”.
The latest penalty adds to the $2.7 million in fines dodgy agencies have been slapped with for flouting Victoria’s underquoting laws in recent years.
Hoskins Maroondah and Mr Peters have also been ordered to undertake a compliance program and make public notices of its conduct at its office and on its website.