Realtor warned in fair-trade crackdown

By ANNE GIBSON

The Commerce Commission has warned a real estate agency for misleading advertising as part of a crackdown on bogus ads.

The Merivale branch of Kent Prier Real Estate in Christchurch, using the name Ray White Merivale, has been told it breached the Fair Trading Act 1986 in the way it advertised a property.

But the licensee for Kent Prier and chief executive officer of Ray White New Zealand, Mr Carey Smith, has defended the firm and is blaming the auctioneer and salesperson.

The Business Herald has been supplied exclusively with details of the case, after a request under the Official Information Act for Commerce Commission action against real estate agents.

This follows the prosecution in December last year of the Orewa Property Shop, trading as The Professionals, which was fined $3600 for using photos of beach vistas to advertise homes that were not on the beach.

The commission said it was undertaking six investigations of five real estate agents, after 120 complaints over a 12-month period.

In the latest case, the Commerce Commission supplied details of a property advertised in the Christchurch Realtor where it was stated bidding at the auction would start from $220,000. But the property was not for sale at $220,000 and the vendors expected significantly more. The Commerce Commission has withheld specific information about the property, which fair trading manager Ross McPherson said had not been sold. Information withheld includes the property's address, how much the vendors expected to get for it and the lowest price they would accept: "Their bottom line price was quite a bit more than $220,000," Mr McPherson said.

Stuart Wallace, chief investigator of the commission's fair trading division in Christchurch, said the commission had received a number of complaints in relation to this style of advertising.

Although the commission issued only a warning, it told Ray White Merivale that future advertising should not be misleading: "In this case, where the vendor had no intention of selling for less than [figure deleted], we would consider that the 'bidding from $220,000' statement is likely to be in breach of the Fair Trading Act," Mr Wallace wrote to the Papanui Rd firm.

Asked to respond to the commission's warning, Carey Smith of Ray White New Zealand said the firm had used an independent auctioneer to sell the Christchurch property. He blamed the auctioneer for starting bidding much higher than $220,000. He added that the salesperson involved with this property had left the firm and that the auction was 12 to 18 months ago.

"It's a warning only. We have taken heed of that warning." Ray White had a company policy of not including prices with properties for auction, he said, adding that although the the firm's telephones were answered as Ray White Merivale, the firm was still trading as Kent Prier Real Estate.

Mr Kent Prier, in Christchurch, said he no longer had any involvement with the firm.