Estate agents feel heat on ads

By ANNE GIBSON Property editor

Showing a picture of the distinctive Mangawhai Head Rock in an advertisement for a section from which the rock was not visible has landed a real estate firm with a prosecution.

Sails Realty at Mangawhai Heads is one of three real estate agencies being prosecuted by the Commerce Commission.

The others are Century 21 Morris Realty in Palmerston North and Olsen Everson at Orewa.

Charges are likely against at least four other agencies as the commission cracks down on breaches of the Fair Trading Act 1986.

Vince Cholewa, senior adviser (communications) at the commission, said charges had been laid, documents filed and dates set for the three prosecutions in various district courts.

The charges all alleged breaches of the act.

Two of the cases are about advertising; the third is about pricing.

Marilyn Platt, the licensee of Sails Realty, said she had not broken the law and the complaint against her had been made by another real estate agent.

"All I did was use a picture of Mangawhai Head Rock - saying what it was - with sections for sale, which was published in the New Zealand Herald."

Lewis McIlroy, licensee for Olsen Everson at Orewa, said his firm was being prosecuted for an advertisement of a property on Hibiscus Coast Highway.

The property was one back from the waterfront and had a walkway down to the beach.

The charge concerned a photograph used to advertise the property, Mr McIlroy said.

The ad had been run before he joined the office.

Agents previously were able to identify a property as being "a hop, skip and a jump from the beach," he said. Now they had to physically test this out before they used these words.

He was also upset that other agents were making the complaints to the commission.

Century 21 Morris Realty in Palmerston North closed this year.

David McDougall, who was an owner of the agency, said the prosecution involved the sale of a property in Palmerston North and "price banding".

Mr McDougall, who is now with Century 21 Sutton Realty, which has offices at Bulls, Marton and Feilding, said a property was advertised in the Property Press last October for a price much lower than the vendors had expected.

"A person went to buy it, offered a price and the owner would not accept it, so the buyer asked why it was advertised so much lower than they expected," Mr McDougall said.

The listing agent, Bette Ireland, said the matter concerned a buyer inquiry range issue and the house being advertised for between $90,000 and $99,000.

She said an offer of $87,000 was made but rejected by the vendors. Months later she was still marketing the property.

The three latest cases are a result of the commission's crackdown on misleading advertising and its prosecution in December of the Orewa Property Shop, trading as The Professionals.

It was fined $3600 for using photos of sweeping beach vistas to advertise homes that were not on the beach.

Principals Alan and Shelly Rowlands said they were trying to promote the lifestyle of the area.

Real Estate Institute president Rex Hadley said he was aware of the commission's enforcement activity.

He warned against placing bogus ads.

"Foolish advertising by a few is bringing us all into disrepute and tarnishes the thousands of legitimate advertisements placed weekly," he wrote in the the institute's journal.

"It is very disappointing to report that we still have members who are not listening to the Commerce Commission with regard to integrity in their advertising.

"Both our chief executive officer, Eric Keys, and myself have met with commission chairman John Belgrave and his senior staff and they have relayed to us their concerns with price banding, 'bidding to start from', and photographs of properties that were downright misleading."

Mr Belgrave also issued a warning when The Professionals was prosecuted , saying that agents should be careful.

"For the vast majority of consumers, their house is the biggest purchase they will ever make," Mr Belgrave said.

"Agents' false or misleading claims can cause significant detriment to consumers.

"This is also a highly competitive industry and agents who do business fairly should not be disadvantaged by those who use deceptive tactics."

Links:


Commerce Commission

Real Estate Institute of New Zealand