Misleading Property Listing

zvyx on 29/10/2019 - 12:25
Last edited 29/10/2019 - 13:33 by 1 other user

I was interested in a Sydney property marketed as "Build whatever your heart desires - DUPLEX SITE", a vacant 700sqm, 15m wide block of land, well situated. Looked at the contract, no easements. Last exchanged 2 years ago as vacant land. Real Estate Agent (REA) said the reason for the vendor selling was financial issues. Given all of this, I made a reasonable offer and it was accepted verbally, so started to do due diligence.

Noticing that the property listing had vendor-commissioned architect-drawn plans for a duplex, I contacted the architect, upon which I found out the real reason for the vendor selling - that in fact a duplex could not be built. The land sloped in such a way that stormwater drainage suitable for a duplex required almost impossible and unfeasible development of structures passing four neighbouring properties, and the architect had in fact been attempting to solve this issue for the vendor extensively with Council co-operation. The architect informed both vendor and the real estate agent about this, in advance of the listing.

Obviously I've withdrawn the offer. I couldn't help but feel though, that the way this property was advertised has gone beyond the typical real estate listings that merely omit negative factors. In addition, at no stage of communication did the REA disclose this.

The communication later with the REA was however most disappointing - initially he denied it was being marketed as a duplex site. Then reinforcing that this was misleadingly advertised, he proceeded to remove the words Duplex site, but left the Duplex plans up and the optimistic sounding heading. Upon filing a complaint with Office of Fair Trading for misleading advertising, and leaving a negative review on Google, he proceeded to tell me that I was in the wrong and overreacting to this matter, and that he could have done a number of things to obscure the property's problems if he intended to mislead.

I think this represents an instance of dishonesty and unethical behaviour, with no sense of remorse or regret about marketing it falsely. I am generally mild mannered and accept that REA aren't responsible for research, however this is a known issue. I would like this REA to acknowledge this, receive some form of disciplinary action e.g. Classes on Ethics, and then continue practicing in a more ethical fashion. OzBargain, do you feel I'm overreacting? What would you do?

Poll Options

• 6
  Yes, you're overreacting
• 15
  No, this is wrong
• 41
  No, this is wrong but you're wasting your time
• 6
  Bikies

• 

  elgrande on 29/10/2019 - 12:36

  +1

  I am always sceptical when a block of land includes plans.. had a similar issue for a block near Newcastle, block was sloped too much for the plans to be built.

• 

  kahn on 29/10/2019 - 12:36

  +3

  When it comes to ethics, none are superior to the real estate agent.

  • 

    pegaxs on 29/10/2019 - 14:07

    +1

    Oh, I don't know. Used car salesmen are pretty stand up, honest people.

    • 

      kahn on 29/10/2019 - 14:16

      +1

      If there was a profession dedicated to handling gym membership cancellation requests then that would be up there too.

      • 

        dogboy on 29/10/2019 - 14:59

        I think Mechanics are definitely top of the list.

    • 

      coin saver on 29/10/2019 - 15:39

      Never met a new car salesman i would trust either. Only a couple of weeks ago i had one insist that the Astra is built in Germany and then another insist that the Commodore is built by General Motors.

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  MrHyde on 29/10/2019 - 12:40

  +6

  caveat emptor

  The REA does not have disclose any information and it is upto the buyer to do their due diligence. Again from your description, the site could be used to put a duplex on it; its just that it is more complicated and more expensive that other sites; which may make it financially unviable from an investment perspective. But there could be people out there who are not looking at it from a financial investment perspective - I know of people who have bought such sites to build duplex units for their kids and plan to give them one each as an inheritance.

  • 

    zvyx on 29/10/2019 - 13:25

    I thought that a REA doesn't have to disclose anything as well, so I have mostly accepted REAs lying by omission.

    However in reading the REINSW Code of Practice, it very clearly states that an REINSW member (and an employee of the member) needs to verify to reasonable extent all facts of the land, as to "avoid error, exaggeration or misrepresentation".

    The particular proposed work is so unfeasible that there is no good justification for undergoing it - the estimate was at least $400k + court battles with neighbours.

    • 

      HighAndDry on 29/10/2019 - 13:31

      The particular proposed work is so unfeasible that there is no good justification for undergoing it

      That's a matter of opinion. Court battles aren't necessary - payments to neighbours for consent are part of normal property development.

      • 

        MrHyde on 29/10/2019 - 14:53

        This - we have just bought a property where the storm water drain of our neighbours cuts across 4 properties (including ours). It cuts across our property in such a way that as soon as we start digging to lay the foundations, we will break the pipes and flood our property. A bit of negotiation with the neighbour to build a new drain going to a new pit that we will build and then out onto the street drainage and we are good to go. All up, additional cost of about $2k on top of our other plumbing needs.

        From what I gather, the architect for the property you looked at was still working with Council to come up with a reasonable plan - maybe need to talk to more architects as well.

        • 

          zvyx on 29/10/2019 - 15:42

          @MrHyde: I didn't go into more detail about the property, but essentially after the architect concluded with extensive investigation that it wasn't feasible and informed everyone, the owners sought a second opinion, submitted DA and it was rejected.

          Unfortunately the owners stand to lose 2 years worth of interest in buying this block of land in the first place, plus the cost of drafts, DA etc and finally the value of the block itself, as I had offered a figure $100k less than they had paid for. So I'm certain if there was a way to do it, the owners would have tried it.

• 

  whooah1979 on 29/10/2019 - 12:55

  What would you do?

  Have a nice cup of tea and move on with more important things.

  • 

    zvyx on 29/10/2019 - 13:28

    I know - but it is somewhat cathartic to write this all up, and I certainly feel a lot better versus letting it slide!

    • 

      [Deactivated] on 29/10/2019 - 15:07

      Totally understand the catharsis - feels great to purge via keyboard!

      I commend your follow-up actions - it's all too easy to let these things slide, especially since you didn't suffer any financial loss.

• 

  [Deactivated] on 29/10/2019 - 12:55

  +2

  It is patently misleading.

  The buyer has every opportunity to find out before making an offer.

  Make from that what you will.

• 

  geek001 on 29/10/2019 - 13:12

  I would probably be mad too, but at the end of the day, even if you get the REA in trouble, he will probably get a slap on the wrist fine. It will not stop his misleading behaviour nor prevent other REAs from doing the same thing. Probably do what others have said and move on. There are better things to do in life. :)

• 

  toniyellow on 29/10/2019 - 13:21

  +2

  I think you did the right thing reporting it to the office of fair trading, but it is hard for you to influence their choice of penalities. You could give them feedback, but then move on.

• 

  cameldownunder on 29/10/2019 - 13:53

  1 Mio Kudos to you, well done ( Seriously )

• 

  [Deactivated] on 29/10/2019 - 17:56

  You've done all you could … which is so much more than most people who have done. Thank you :)

• 

  askme69 on 29/10/2019 - 20:05

  Real estate agents are the scum of the earth, now equal with car salesman.

  pS: I am a QUAL Real Estate agenr.