Property trader warned over ‘misleading’ claims

An Auckland property trader whose business was based on buying properties at less than market value has been warned by the Commerce Commission for his claims.

The commission said claims made by Peter Lee and PWG Ltd, of which Lee is the sole director, could have breached the Fair Trading Act.

Lee was found to have made unsubstantiated claims publicly and on his company’s website, including claiming properties were sold for ‘‘fair market value’’ when the business was premised on purchasing property for less than fair market value. The company advised vendors that selling through PWG would save them the fees for a real estate agent. PWG traded as both Auckland House Buyers and Property Wise.

Claims were made that Auckland House buyers had 14 years of real estate experience and that Property Wise had 20 years of experience when PWG did not exist before 2016.

It was also claimed Property Wise had won the ‘‘Property Professional of the year award 2013/2014’’, while endorsements on the website were related to the previous owner of each brand, and did not pertain to Lee. Commission chair Anna Rawlings said Lee and PWG had no reasonable grounds to make such claims. ‘‘They were misleading and were likely to breach the law.’’

Because consumers might not be able to establish the veracity of such claims, businesses had to ensure any representations about the services they provided were accurate and could be backed up with evidence, Rawlings said.

‘‘Given that the sale and purchase of a house is a major transaction for anyone to enter into, we also recommend consumers take the time to do proper due diligence when selling or purchasing a house, and seek independent advice to help them do that if they feel uncertain about any aspect,’’ she said.

Lee has taken down both the Property Wise and Auckland House Buyers websites.

Warnings issued by the commission are based on an opinion that conduct might have breached the law. A court must decide whether a breach of the law has occurred.

It was reported the investigation started after a complaint relating to Lee’s purchase of Pamela Baucke’s house in 2017. She sold it for $515,000 when it was estimated to be worth as much as $250,000 more.