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REIQ Journal : March 2010
In view of the uctuating Australian economy and its impact on property buyers, agents should adopt this maxim in all their dealings to avoid being exposed to a potential misleading or deceptive conduct claim under section 52 of the Trade Practices Act 1974 (Cth) (TPA). SECTION 52 OF the TPA provides that a corporation shall not engage in conduct that is misleading or deceptive. A real estate agency satis es the de nition of a corporation under the TPA and will be liable for the conduct of its directors and employees if such persons are authorised to act for the agency. What constitutes misleading or deceptive conduct? In order for a buyer to allege an agent's conduct was misleading or deceptive under section 52 of the TPA, it will rst need to show a false representation was made and that it relied upon the misrepresentation in electing whether to enter into a contract to purchase a property. The following are examples of recent misleading and deceptive conduct claims we have handled on behalf of agents as solicitors for the REIQ Professional Indemnity Insurance Scheme: False statements about the characteristics of a property such as water views when no such views exist; Statements of opinion about the future development potential or capital growth prospects of a property which are untrue or unsupported by evidence; Statements that a property has a boat mooring or a pontoon without advising the buyer that the structure does not have the requisite approvals; Making inaccurate or unsubstantiated estimates about rental returns to a property investor; and Non-disclosure of a property's encumbrances. By Paul Hopkins, Partner, Carter Newell Lawyers "When in doubt, tell the truth" - Mark Twain REIQ Journal March 2010 33 Legal Issues