Harcourts - facing action from the Commerce Commission.
Harcourts - facing action from the Commerce Commission.
The Commerce Commission said it has today begun civil proceedings alleging cartel conduct in the Christchurch real estate market involving Harcourts’ franchisees.
Four Seasons Realty 2017, Gold Real Estate Group, Grenadier Real Estate and Holmwood Real Estate are involved.
Commerce Commission chairman Dr John Small said they competed with eachother for customers but entered into agreements that affected the prices they charged.
That involved commission rates so constituted as alleged cartel conduct under the Commerce Act.
Franchisor Harcourts Group was a party to those agreements, he added.
“The commission alleges this conduct was damaging because, between them, the franchisees had a significant share of the Christchurch real estate market,” Small said.
For most Kiwis, buying and selling a house is a major transaction. People should be able to trust the process is free of collusion.”
Commerce Commission chair Dr John Small says the franchisees had a significant share of the Christchurch real estate market. Photo / Mark Mitchell
The commission was not looking to challenge the franchise model generally.
“The franchise model is tried and tested and can work really well for Kiwis. Typically, franchises are organised so that franchisees don’t compete with each other,” he says.
However, where franchisees are in competition, the law that prevents cartel conduct applies to them, just like any other business.
“In this specific case, it just so happens that the cartel conduct we are alleging took place in the context of a franchise relationship,” Small said.
“Franchisees need to be aware of when and where they compete with one another and ensure that they do not engage in cartel conduct, which carries significant risks such as criminal sanctions and potential penalties under the Commerce Act.”
A Harcourts spokeswoman acknowledged the proceedings.
“Harcourts NZ confirms that we have received proceedings from the Commerce Commission. We take any allegations seriously and have co-operated with the Commerce Commission’s process. As this is a legal matter, we will not be making further comment,” her statement said.
Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.
