$100k for bad advice on property

Real estate agents giving out unsatisfactory advice or using misleading advertisements may now have to pay up to $100,000 compensation to home buyers and sellers.

Agents were previously only at risk of paying compensation when committing serious cases of “misconduct” that directly caused buyers or sellers to lose money.

But the new law brought in yesterday allows buyers and sellers to also seek compensation in less serious cases of “unsatisfactory conduct” by an agent.

Kevin Lampen-Smith — chief executive of industry regulator the Real Estate Authority — said there had been cases where buyers and sellers lost money due to unsatisfactory agent conduct and the new law closed that gap.

“The whole purpose of the act was to lift professionalism in the industry but also provide a process by which the public could seek redress for the losses they have incurred,” he said.

But while the new law fills a gap for consumers, it wasn’t likely to open a floodgate of compensation payouts.

Over the past decade, agents committing misconduct had only been ordered to pay compensation in 10 cases.

“Compensation isn’t easy to get,” Lampen-Smith said.

“If an agent says a property is okay and the person goes and had to spend $20,000 fixing it up — that might not be as successful as saying, ‘ I specifically asked about the roof and the real estate agent specifically said the roof is repaired and in perfect condition, but I had to spend $20,000 fixing it’,” Lampen-Smith said.