Agency Practice

Underquoting: A reputational risk that must be avoided 

👓 2 minute read

Recent events in Victoria serve as a stark reminder of the dangers posed by underquoting and the reputational damage it can inflict on our industry. 

An established agency - with nearly three decades’ experience - has recently found itself at the centre of legal proceedings after alleged breaches of underquoting legislation were exposed. The agency’s practices were not only subject to scrutiny by Consumer Affairs Victoria, but they also attracted adverse publicity on A Current Affair, underscoring the high stakes involved when transparency is compromised.

The risks of underquoting

Underquoting, the practice of advertising properties at prices that do not accurately reflect realistic market values, is not a trivial matter. Aside from exposing agencies to legal repercussions and potential disciplinary action from bodies such as the Victorian Civil and Administrative Tribunal (VCAT), this practice can cause severe damage to our brand. The consumer’s trust is paramount. When property appraisals misrepresent the market, clients and buyers lose confidence in the integrity of the entire industry, and the fallout can be widespread and enduring.

A matter of honest appraisals

It is critical in every state and territory across Australia that we provide accurate, evidence-based property market appraisals right from the outset of our client relationships. A reliable appraisal process involves:

• Delivering a Comparative Market Analysis (CMA) that genuinely reflects market conditions
• Including detailed comparisons with recent sales in the relevant area
• Ensuring that vendors are informed of both the potential price range and the basis for such valuations
• Discussing ‘Days on Market’ and auction clearance rates (whether auctioning or not) to guide the customer on the likely length of time it will take to sell

This approach not only maintains compliance with statutory requirements but also preserves the reputation of our agencies and sustains the broader industry’s credibility.

Lessons from Victoria

The adverse publicity experienced by the agency involved - significantly amplified by national media coverage on A Current Affair - illustrates how breaches can quickly escalate into a public relations crisis. As professionals, we must internalise the lesson that inaccuracy is not merely a statutory offence; it is a business risk. Upholding honesty and transparency in every appraisal is essential for protecting our brand reputation and reinforcing the trust placed in us by our clients.

Safeguarding our industry

At First National, we take these lessons seriously. Our commitment to rigorous, honest property appraisals should be every agent’s foundation. By ensuring full compliance with state and territory real estate legislation, we not only avoid the risk of legal action but also strengthen our market position. 

Let the recent events serve as a reminder: every appraisal must be a beacon of trust, reflecting the integrity and professionalism that defines our industry. Maintaining high standards of transparency is our best defence against reputational damage. 

NSW Rental Reforms: REMINDER - Key Changes Effective Monday 19 May 2025

👓 3 minute read

NSW property managers are reminded that significant changes to rental laws came into force from Monday 19 May 2025. Below, the principal amendments and their implications for your practice are outlined.

1. Ending a Tenancy

• Valid Termination Reasons Required: Landlords are now required to provide a valid, substantiated reason when ending a tenancy. This change marks the end of ‘no-grounds’ terminations for both fixed-term and periodic leases.
• Documentation Obligations: In certain cases, supporting documentation must accompany termination notices. Prior to the new laws taking effect, tenants will receive a Termination Information Statement detailing these requirements.
• Data Collection Initiative: From 1 July 2025, NSW Fair Trading will collect data on the reasons for tenancy terminations via Rental Bonds Online.

2. Revised Notice Periods for Fixed-Term Leases

• Extended Notice Requirements: 
  • For leases of six months or less, tenants must now be given a minimum notice period of 60 days.
  • For leases longer than six months, the notice period extends to 90 days.
• Implications for Lease Renewals: These changes necessitate careful planning for lease terminations and subsequent renewals, ensuring compliance with the revised notice provisions.

3. Re-Letting Restrictions

• Cooling-Off Period for New Leases: New leases cannot be entered into immediately following the end of a tenancy if the landlord requires the property for alternative purposes—such as sale or renovations.
• Exceptions Available: Should a landlord’s circumstances change for reasons beyond their control, an application can be made to NSW Fair Trading to re-let the property. Supporting documentation must be provided to justify the request.

4. Pet Regulations

• Enhanced Rights for Renters with Pets: Renters are now able to request permission to keep a pet.
• Stricter Refusal Criteria: Landlords can only refuse a pet request for specific, acceptable reasons. If a response is not provided within 21 days, the pet request will be automatically approved. A new Pet Application Form and associated guidance will be available from 19 May.

5. Fee-Free Electronic Rent Payment Options

• Mandated Payment Methods: Landlords and agents are now obliged to offer fee-free, electronic options for rent payments, such as bank transfers or BPay.
• Future Centrepay Inclusion: Later in 2025, Centrepay will also become an option, although registration will only be necessary if the tenant selects that payment method.

6. Advertising Restrictions

• No ‘No Pets Allowed’ Ads: Rental listings must no longer include statements that categorically prohibit pets. This change aligns advertising practices with the new pet regulations.

• Prohibition of Upfront Fees: Since 31 October 2024, prospective renters have not been allowed to incur fees for services including background and identity checks or the preparation of tenancy agreements.
• Limitations on Rent Increases: Rent can now only be increased once every 12 months for all lease types, including renewals and replacements, except where adjustments are made due to a tenant’s social housing rent rebate.

Preparing for Compliance

NSW Fair Trading will host a free online information session on 8 May 2025 from 11am to 12pm to assist property managers in understanding these legislative changes and preparing their practices accordingly. Further details are available on the NSW Fair Trading website.

Alternatively, REINSW has a training session on 29 April. Registration details are here...

Ensuring full compliance with these reforms will not only protect you from potential penalties but also contribute to a more stable and fair rental market in NSW. It is essential to review and update internal policies and systems to align with these new legislative requirements effective from 19 May 2025.