April 30, 2014

Real estate advertisements – a focus on price, location and title

Real estate does not sell itself. Properties are advertised for sale on websites, on signs, in newspapers and in brochures to attract potential purchasers.
Real estate advertisements must comply with the Australian Consumer Law which prohibits false or misleading representations in connection with the promotion of the sale of land, with a focus on –
the nature of the interest [title] in the land;
the price payable for the land;
the location of the land;
Section 152 (1) makes contravention a criminal offence. Section 30 (1) is in the same terms, but with a civil pecuniary penalty. And section 18 (1) contains a broad prohibition against misleading conduct.
Two recent decisions of the Supreme Court of Western Australia, eight days apart, provide a guide as to how the Australian Consumer Law applies to advertising real estate for sale with a focus on price, location and title representations.
Misrepresentations on location and price
Barr and Standley is a reputable and long established real estate agency based in Bunbury, WA. Consumer Protection WA laid criminal charges under section 152 (1) Australian Consumer Law against the partners of Barr and Standley over two property sales advertisements placed on a real estate website. The first was for a false or misleading representation as to location, the second price.
They were acquitted by the magistrate after a trial at Bunbury. The appeal by Consumer Protection WA was refused by the Supreme Court of Western Australia, Criminal Division, for the reasons given by Justice Allanson in Commissioner for Consumer Protection v Standley [2014] WASC 45.
LocationThe first website advertisement was for the sale of ‘47 Hardwick Street, Harvey, WA 6220’. The use of ‘Harvey’ was deliberate, even though the property was located in a township of Cookernup, 12 km from the township of Harvey, because Harvey was a significant and well-known town, while Cookernup was not. Consumer Protection WA alleged that naming Harvey as the location was a false representation.
The Court examined the website page and found that ‘the address cannot be separated from the other information on the page’. In particular, the Google map on the page will direct the user to the correct location even though it is described as in ‘Harvey’ at the top of the page. Therefore, given that the consumer can do an internet search for a property at leisure, the Court concluded that the location was not false or misleading to the ‘reasonable consumer’.
Comment: Use the actual address, and add ‘near Harvey’ to avoid problems.
Price The second website advertisement was for the sale of a property at Pelican Point in the ‘price range $1.5 million to $2.5 million’. This was allegedly misleading because the seller was not prepared to sell at a price of less than $2.2 million.
The Court said that in the absence of evidence about an adverse reaction from the target audience or advertising practice, it was wrong to assume that ‘the target audience for that internet advertisement’ would have understood the price range ‘to represent that the seller would accept or consider offers in the lower part of the range’. Therefore, it was not false or misleading.
Comment: If the price was advertised only as $1.5 million, it would have been underquoting and therefore be misleading. Advertising a price range avoids this problem.
Conclusion: Consumer Affairs WA failed to prove that the advertisements were false or misleading.
Misrepresentations on title and price; and misleading conduct
Bryan and Patricia Susilo were not real estate agents, and were not promoting the sale of property for a cash price on standard terms. They were real estate investor novices who promoted Rent to Buy arrangements to sell property to ‘people who wanted to purchase a home but had difficulty qualifying for a conventional bank loan’. Their advertisements were different from standard real estate advertisements. For instance –
OWN MY HOME – No Banks Needed $558 p.wk + outgoings
Consumer Protection WA took civil prosecution proceedings under sections 18 (1) and 30 (1) Australian Consumer Law alleging that the advertisements, which were displayed on websites and on house signs, falsely claimed: they had an ownership interest; that homes could be purchased with no bank loan; and the price disclosed was all that was payable.
The Susilos admitted they made misleading representations in four of their advertisements. And so Justice Beech in the Supreme Court of Western Australia, Civil Division, was concerned only with the declarations, injunctions and pecuniary penalties that should be made, in the decision of Commissioner for Consumer Protection v Susilo [2014] WASC 50.
Title - Nature of interest The Susilos did not have freehold title to the properties they advertised for sale as ‘Own my home’. Their ‘sale interest’ was an equitable interest either through taking a vendor option to purchase a property, or by entering into a joint venture with an owner to sell.
The Susilos were unable to defend against the Commissioner’s assertion that their advertisements would mislead the public. Their junior barrister who acted pro bono had no choice but to agree that the advertisements were misleading, rather than arguing they had a ‘sale interest’, because the Susilos could not afford to fund the legal fees. His role was to make submissions as to penalty. It is regrettable that Consumer Protection WA did not offer to fund the Susilos’ defence as a test case, similar to what the ATO does when it wants to set a precedent, because this devalues the decision as a precedent.
Comment: The misrepresentation was minor and could have been cured easily – by substituting ‘Own this home’ instead of ‘Own my home’. 
Misleading conduct The related misrepresentation on the advertisement was ‘No Banks Needed’. The Susilos sold the property as a Rent to Buy, which means that a prospective purchaser does not need bank finance immediately to purchase the property.
Comment: The misrepresentation was minor and could have been cured easily by adding ‘to move in’ to conform with the practice that purchasers pay out Rent to Buy arrangements a year or two later on, using bank finance.
Price The advertisement disclosed only the ongoing Rent to Buy payments – it did not fully disclose the full price payable for the home.
Comment: The misrepresentation was minor and could have been cured easily by adding ‘+ moving in and price payments’.
Other misrepresentations The Susilos made other misrepresentations, such as that they ‘bought houses fast’, they were part of a ‘group of investors’, and they ‘charged no commissions or fees’. They carried on a real estate business by marketing and selling properties for reward without holding a real estate agent’s licence.
Penalties In imposing pecuniary penalties, the Court took into account that there was no evidence that anyone was actually misled by the conduct, or suffered loss or damage, the nature and extent of the conduct, no previous contraventions, the small scale of the business, the genuine belief that taking an option or entering into a joint venture was sufficient to give an interest in a property to sell, their co-operation in admitting the contraventions rather than contesting them, and their youth and inexperience.
The penalties imposed were much lower than the WA Commissioner had sought. They were $17,500 for Ms Susilo, $12,000 for Mr Susilo (both with time to pay) and the agreed legal costs of $8,000.
How does the Susilo decision affect the vendor finance industry?
Justice Beech had in mind: “there is, or is likely to be, an active rent to buy industry” in Australia, which needs to comply with the Australian Consumer Law.
The Commissioner for Consumer Affairs did not challenge the legality of the rent to buy / vendor finance arrangements used. This is because Rent to Buy arrangements for residential property in the form of Leases with an Option to Purchase (if back to back – Sandwich Lease Options) and Instalment Contracts (Terms Contracts) are legal in Western Australia, and indeed throughout Australia, although with limits in South Australia.
The Susilo decision provides a clear warning that vendor financiers need to avoid false or misleading information in their advertisements. And they need to hold a real estate agent’s licence if they are carrying on a business of marketing and selling properties.
Source  - Anthony Cardato Cardato Partners www.lexology.com
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Best practice forms provided by Real Estate Excellence


Name of folder online – forms within the folder listed below

Property Management forms – folder



Folder name online - Application forms and processing

  • Acceptance of property sight unseen
  • Anti-discrimination booklet
  • Checklist – new tenant
  • Company application form
  • Pet application form
  • Rental reference to other agency
  • Tenancy application processing procedure
  • Updated personal information form

 Folder name online - Best practice forms completed

  • Bond increase letter to tenant (template)
  • By law breach of agreement cover letter to tenant  (template)
  • Damage to premises breach cover letter to tenant (template)
  • Noise complaint cover letter to tenant (template)
  • Unapproved occupant cover letter to tenant
  • Unapproved pets cover letter to tenant

Form 11 Notice to remedy breach completed examples

  • Bond increase failure to pay
  • Breaching body corporate by laws
  • Damage to premises
  • Emergency repairs not being advised
  • Emergency repairs not advised water leak
  • Illegal use of the premises –drugs
  • Illegal use of the premises – pools
  • Illegal use of the premises – smoke alarms
  • Noise complaint
  • Rent arrears
  • Routine repairs not advised
  • Special term breach smoking inside
  • Unapproved fixture or structural change
  • Unapproved occupants
  • Unapproved Pay TV
  • Unpaid water bill

Form 12 Notice to leave examples

  • Agreement frustrated non liveability
  • Contract of sale – periodic tenancies
  • Noncompliance of tribunal order
  • Unremedied breach other than rent
  • Unremedied breach – rent
  • Without grounds
  • Form 18a House best practice example (RTA Form)
  • Form 18a Unit best practice example (RTA Form)

Folder name online - Break lease forms

  • Agreement to end tenancy agreement early – mutual agreement
  • Break lease agreement
  • Checklist – break lease
  • Tenant breaking lease – letter to lessor
  • Updated personal information form
     

Folder name online - Change of shared tenancy forms

  • Change of shared tenancy – entry condition report agreement
  • Change of shared tenancy agreement for tenant/s
  • Updated personal information form
     

Folder name online - Forms and checklist

  • Authority for either party to authorise or sign – lessor form
  • Acknowledgement of tenancy documents – tenant
  • Appointment form acknowledgement for lessor (management agreement)
  • Change of banking details – lessor form
  • Checklist bond refund
  • Checklist break lease
  • Checklist lease renewal
  • Checklist new management
  • Checklist new tenant
  • Cleaning guide for vacating tenants
  • Company application form
  • Consent for open homes – tenant agreement
  • Consent for use of photos and images – tenant agreement
  • Cover letter to lessor – copy of entry report and lease agreement
  • Daily planner template
  • Daily priority list template
  • Database letter to tenant in default and monies owing
  • Electronic consent for tenant
  • Email tenants lease agreement
  • Entry condition report acknowledgment letter to tenant – return in 3 days
  • Form 11 cover letter for rent arrears
  • Form 11 – repeated breaches cover letter for tenant
  • Form 12 – rent arrears cover letter to tenant
  • Form 12 tenant vacating – lessor letter
  • Key procedures and the entry condition report – tenant agreement
  • Key sign in sign out register template
  • Keys – request to tenant for keys to be cut
  • Landlord disclosure statement – for landlords to provide disclosure
  • Lease renewal instruction form
  • Letter to agency – we are taking over management
  • Letter to lessor – tenant in breach of agreement
  • Letter to lessor  - curtains, blinds safety
  • Monies owing above the bond – tenant letter
  • New agency taking over management
  • No pool safety certificate to tenants for units only
  • Non return of entry condition report – letter to tenant
  • Open homes booking form
  • Pool safety certificate – tenant
  • Public liability details request and landlord insurance details letter to landlord
  • Rent arrear procedure
  • Rent arrears letter to tenant – consistent 4 or more days (prior to 8 days)
  • Rent arrears procedure – given to tenants at sign up
  • Rent increase letter to tenants - periodic  - letter to tenant
  • Rent increase letter to tenants – tenants on periodic to fixed term
  • Rent increase and new lease offer to tenants
  • Rental reference to another agency
  • Smoke alarm maintenance instruction letter for lessor
  • Smoke alarm letter to lessor
  • Survey form for lessor
  • Survey form for tenant
  • Tenancy application form template
  • Tenancy application procedure form
  • Tenancy sign up acknowledgement (after viewing Real Estate Excellence sign up CD)
  • Tenant breaking lease – letter to lessor
  • Tenant information – fire evacuation plan
  • Tenancy vacating the property – letter to lessor
  • Termination management agreement with existing agent – letter for lessor
  • Termination management agreement by agency due to maintenance
  • Termination of management agreement
  • Termite and building inspection recommendation – letter to lessor
  • Time diary
  • Transfer (assignment) of appointment
  • Vacate cover letter to tenant
  • Water invoice letter to tenant
  • Weekly planner – time management plan template
  • Welcome letter to tenant – agency taking over management
  • Withdrawing notice to leave for unremedied breach letter to tenant
     

Folder name online - General forms and information

  • Advertising expenditure approval form for lessor
  • Advertising proof approval form for lessor
  • Authority for either party to sign and authorise letter to lessor
  • Bond increase letter to tenant
  • By law breach of agreement letter to tenant
  • Change of banking details for lessor to sign
  • Consent for staff member to represent the licensee in tribunal
  • Contractor letter – agency policies
  • Database letter – tenant final warning
  • Discrimination in accommodation – booklet for lessors and agents
  • Drug lab fact sheet from Qld heath
  • Electrical safety laws – brochure for landlords
  • End of month closes fact sheet
  • Letter to tenant – we are no longer managing the property
  • Maintenance obligation reminder to tenants
  • Management fee increase letter
  • Mould fact sheet for tenants
  • Password form to access information – lessor and tenant form
  • Play it safe with asbestos – tips
  • PM weekly report template
  • Pool information sheet for tenants
  • Pool safety letter for tenants
  • Proof of identity checklist for lessors
  • Property management file audit template
  • Property management meeting agenda
  • Request for funds to pay account (lessor)
  • Safety switches fact sheet
  • Social media policy template
  • Solar panels and rental property information sheet
  • Tenant enquiry form
  • Welcome letter to tenant – agency taking over management
  • Updated personal information form
     

Folder name online - Keys - forms

  • Key register template
  • Key sign in out register
  • Keys – request for tenant to cut

Folder name online – landlord letters

  • Cover letter to lessor  ECR and lease agreement
  • Form 12 tenant vacating
  • Form 13 tenant vacating
  • Lease renewal instruction form
  • Lessor letter regarding maintenance obligations
  • Lessor wishing to undertake own maintenance
  • Lessor wishing to use own contractors
  • Letter to lessor pool safety certificate
  • Letter to lessor blinds curtains safety
  • Maintenance – lessor failing to attend
  • Public liability detail request from lessor and landlord insurance
  • Request for funds to pay accounts
  • Routine inspection cover letter to lessor
  • Routine maintenance policy for lessors
  • Smoke alarm instruction form
  • Smoke alarm letter to lessor
  • Tenant breaking lease letter to lessor
  • Tenant in breach of agreement letter to lessor
  • Termination of management agreement
  • Termination of management agreement with existing agent – letter for lessor
  • Termination of management agreement due to maintenance
  • Termite and building inspections recommendation letter to lessor
  • Updated personal details form

Folder name online - Lease renewals - forms

  • Checklist – lease renewal
  • Lease renewal instruction form for lessor
  • Maintenance obligation reminder to tenants
  • Rent increase cover letter periodic letter to tenant
  • Rent increase cover letter periodic to fixed term agreement
  • Rent increase and new lease offer to tenants
  • Updated personal information form
     

Folder name online - Maintenance and Inspections - forms

  • Audit maintenance and inspection template to audit procedures in office
  • Consent for use of images and photos letter to tenant
  • Contractor letter – agency policies
  • Electrical safety laws – brochure
  • Entry notice cover letter to tenant
  • Lessor letter regarding maintenance obligations
  • Lessor wishing to undertake own maintenance letter
  • Lessor wishing to use own contractors letter
  • Lessor email template for routine maintenance request
  • Lessor email template when they have not responded to maintenance request
  • Letter to lessor pool safety certificate renewal
  • Letter to lessor – curtain and blind safety
  • Letter / Email template to tenant – owner has not responded to maintenance or not attending
  • Maintenance – lessor failure to respond as required
  • Maintenance risk letter to tenant
  • Mould fact sheet for tenants
  • Pool information sheet for tenants
  • Pool safety letter to owner
  • Property inspection information for tenants
  • Insurance details request form lessor –
  • Routine inspection cover letter to lessor
  • Routine inspection cover letter to tenant – feedback after inspection
  • Routine inspection report template
  • Routine maintenance policy template for agencies
  • Routine maintenance policy template for lessors
  • Routine maintenance policy for tenants
  • Smoke alarm instruction form for lessor
  • Smoke alarm letter for lessor
  • Tenant email template whey they have reported maintenance
  • Tenant maintenance and request form
  • Termination of management due to maintenance letter to lessor
  • Terminate and building inspection recommendation letter to lessor
  • Tips for inspecting decks and balconies
  • Updated personal information form

Folder name online - New business - forms

  • PAMD form 20a completed (4 page example from Fair Trading)
  • Acknowledgement of receipt of signed appointment of agency copy
  • Authority for either party to sign or authorise – lessor form
  • Appraisal cover page
  • Anti-discrimination booklet for landlords
  • Landlord listing booklet (30 page word document)
  • Attachment to the management agreement explaining costs
  • BDM new business weekly report
  • Body corporate standard by laws
  • Checklist new management
  • CMA template
  • Do not call register laws
  • Landlord disclosure statement for lessor to  complete at sign up
  • Leasing a property with a pool fact sheet
  • Letter to agency – we are taking over management
  • Listing form template
  • PAMD Form 20a explanatory notes for the lessor
  • Password form to access information – lessor and tenant form
  • Proof of identity checklist
  • Rental appraisal cover letter
  • Scripts for new business
  • Tips on what to look for when listing a property for rent
  • What we do for our management services – template for lessor
  • Updated personal information form

Folder name online - Rent arrears - forms

  • Form 11 cover letter – rent to tenant
  • Form 11 cover letter – repeated breaches
  • Form 12 rent arrears cover letter
  • Letter to lessor – tenant in breach
  • Rent arrear procedure
  • Rent arrears letter to tenant – consistent 4 days
  • Rent arrears procedure for tenants to sign
  • Withdrawing notice to leave for unremedied breach
     

Folder name online - Sign up forms for tenancy

  • Body corporate by laws
  • Checklist new tenant
  • Cover letter to lessor – Entry report and lease agreement
  • Disclosure to tenants best practice form
  • Electronic consent for tenant
  • Email tenants lease agreement template
  • Entry report acknowledge 3 day period for tenant
  • Entry report non return letter to tenant
  • Maintenance obligations to tenants
  • Password form to access information – lessor and tenant form
  • Pool information sheet for tenants
  • Rent payment methods statement to tenant
  • Tenancy document received acknowledgement
  • Tenancy sign up presentation acknowledgement *using Real Estate Excellence sign up CD
  • Tenant information fire evacuation plan
  • Updated personal information form
     

Folder name online - Termination of management - forms

  • Letter to tenant – we are no longer managing
  • Lost property report template
  • Termination of management agreement with existing agent – letter for lessor
  • Termination of management agreement due to maintenance
  • Termination of management agreement

Folder name online - Time management - forms

  • Daily planner
  • Time diary
  • Weekly planner – time management plan

Folder name online - Tribunal forms

  • Affidavit template
  • Application to attend hearing by remote conferencing
  • Consent for staff member to represent licensee in tribunal
  • Credit card payment authorisation
  • Enforcement of QCAT decision fact sheet
  • Non urgent QCAT application best practice completed example
  • QCAT time frames for lodging fact sheet
  • QCAT application checklist
  • QCAT application process
  • Urgent application to Tribunal best practice completed example

Folder name online - Vacates – forms - folder

  • Checklist bond refund
  • Checklist vacating tenant
  • Cleaning guide for tenants
  • Consent for open homes – tenant form
  • Form 12 tenant vacating – letter to lessor
  • Form 13 – tenant vacating – letter to lessor
  • Monies owing above the bond – letter to tenant
  • Vacate cover letter to tenant – lessor ending lease
  • Vacate cover letter to tenant general

 

 

 

 

 

 

Licensee and Administration forms – Folder name

Folder name – Employment letters sourced from Fair Work

Employment forms

Annual leave application form

Employment records for leave

Employment records

Fair work handbook

Letter of final warning

Letter of first and second warning

Letter of successful probation

Letter of termination with notice

Letter of unsuccessful probation

Parental leave employer checklist

Parental leave notification form

Privacy breaches guide

Roster template

Weekly time and wages record worksheet

 

Folder Name – Licensee General information

               Anti bullying guide for the workplace

               Australian privacy principles changes as of March 2014

               Business of your dreams plan

               Changes to the Privacy Act – what you need to know

               Do not call register – calling times

               Do not call register – consent meaning

               Do not call register - for the real estate industry

               Do not call register – what is a telemarketing call

               Drug lab awareness brochure for the office

               Drug labs – know the risks

               Employee or contractor article

               Employment authority template

End of month closes – trust account

               Example job descriptions for assistant and property manager

               Facebook content is advertising article

               Facebook implication – workplace

               File smart – electronic record keeping brochure

               Four ways to improve sales article

               Growing the rent roll thoughts

               Incident report – for staff reporting template

               Interview questions – property management                       

               Interview questions – sales

               Licensees – that was then, this is now article

               Mail register template

               Managing the risk of falls at the workplace

               Motivating staff article

               Obligations for body corporate under Workplace Health and Safety                           

               Overview of the Real Estate Award

               Personal and Professional performance review template

               Pool law guidelines for agents and owners

               Prevention of workplace harassment article

               Privacy breaches guide

               Privacy principles as at March 2014

               Professional Indemnity insurance article

               Proof of identity checklist for clients

               Property management file audit template

               QCAT appeal case – agent effective cause of sale

               Real Estate fraud prevention guidelines

               Slip, trips and fall presentation to use in training article

               Slip and trips fact sheet for agency risk management article

               Slip and trip falls guide for the workplace article

               Social media as recruitment tool –are there legal implications – article

               Social media policy template

               Stronger anti-discrimination laws take effect article

               SWOT Analysis template

               Team building training and activities article

               Ten steps to comply with privacy laws

               The ten roadblocks for business owner – article   

               The world wide web of laws entangling social media – article

               Tree and fencing laws information

               Trust account – what needs to be printed at end of month

               Underperformance of staff – management guide

               Work related stress presentation

               Workplace harassment document

               Workplace health and safety compliance checklist

               Workplace health and safety law act guidelines

               Workplace laws – body corporates and owners

Workplace laws – due diligence

Workplace laws – residential premises

Workplace laws – useful fact sheet

Workplace laws, what to do now

              

Folder Name - OFT general requirement forms

               Complaints attachment statement

               Complaints handling requirements

               Complaints register

               Employment register

               Public notice of PAMD code of conduct requirement

               When a certificate of registration is required for staff

 

Residential sales forms and information – folder name

5 Folders online

 

Folder name - Acknowledgement forms

Folder name - General sales agency best practice forms

Folder name - Information sheets – best practice

Folder name - Listing forms

Folder name - Rental forms (sales)

 

Best practice forms below

 

Acknowledgement of receipt of signed appointment of agency copy

Advertising expenditure approval form for seller

               Advertising headline examples

               Advertising proof approval for seller        

               Agency statement to seller prior to listing as per PAMD s134a etc.

               Agreement to end exclusive sales agency agreement with seller

               Agreement to end sale agency appointment

               Auction property and price disclosure – article

               Authority for either party to authorise and sign – seller form

               Best practice article for all salespeople to use in training and education of staff

               Buyer letter – deposit not paid

               Change of price instruction – seller form

               Change of banking details - seller

               CMA requirements for property agents

               Community tile contract acknowledgment for buyer

               Consent for onsite auction – for tenant

               Consent to use electronic transactions

               Contract presentation flowchart

               Daily priority list

               Do not call laws information

No pool safety certificate – form for buyers

               PAMD Form 22a best practice completed

               PAMD form 22a best practice completion guide

               Password form to access information

               Seller disclosure statement

               Seller letter – buyer has not paid deposit

               Use of photo images consent form for tenants

               Written evidence of listing appointment – form for tenants

Updated personal information form




Privacy Act forms and information – folder name

  • Access and correction of information fact sheet
  • April 2014 version 1 Member update
  • Authority for either party to sign and authorise – landlord letter
  • Authority for either party to sign and authorise – seller letter
  • Change of banking details – lessor instruction to agent
  • Change of banking details – seller instruction to agent
  • Checklist – are we compliant with the privacy act
  • Collection personal information and making people aware why fact sheet
  • Data quality and the privacy act
  • Direct marketing and the privacy act
  • Openness requirements under the privacy act
  • Password form to access information – seller
  • Password form to access information lessor and tenant
  • Personal information that is publicly available fact sheet
  • Privacy act – Australian principles
  • Privacy act training video
  • Privacy principles as at March 2014
  • Privacy questions – recommended article to review
  • Protecting other peoples information
  • Release of information to law enforcement
  • Scanning of documents and the privacy act
  • Spam Act understanding consent – email and sms marketing
  • Training presentation power point for staff
  • Updated personal information form – for client and customer

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