The new “Underquoting” law – the changing landscape for Victorian estate agents

September, 2016

By John Turnbull, Partner

On Tuesday of last week the much-anticipated new “Underquoting” Bill was read for a second time in the Victorian State Parliament following its introduction earlier last month. The Bill seeks to amend the Estate Agents Act [1] by introducing several measures designed to, in the words of Ms Marlene Kairouz the new Minister for Consumer Affairs, “act on areas of poor practice and complaints against estate agents”.[2]

Ms Kairouz has picked up where former Consumer Affairs Minister Jane Garrett left off in late 2015 when she sent a clear message to the industry by announcing that legislative reform was coming to “change the culture of [the real estate] industry”.[3] This message ultimately translated into a broad number of investigations undertaken by CAV into the practices of several prominent estate agencies across metropolitan Melbourne, which culminated into proceedings being issued against one high profile inner city agency in the Federal Court.

As an ironic complement to CAV’s investigations, the government foreshadowed its intention in early 2016 to amend the Estate Agents Act, notwithstanding that the Federal Court proceedings which are currently on foot relate to contraventions of the Australian Consumer Law,[4] a law governed by Federal jurisdiction.

Indeed the proposed amendments to the Estate Agents Act, in particular to section 47A, introduce a number of new prescriptive measures that set out specific requirements for estate agents and agent’s representatives when both listing for sale and marketing a residential property on behalf of a seller.

These measures include:

There also remain several points that will require further clarification and/or explanation before the Bill becomes law, such as certain references to “guides” and “forms” to be issued by the Director of CAV.

What is clear though is the State Government’s resolve to follow through with the direction that began in late 2015 by Ms Garrett.

Any agent careless enough to breach the new law post-implementation will undoubtedly experience the full extent of the regulator’s power, which also begs the question as to whether CAV will continue investigating estate agents for historical indiscretions or whether it will turn its attention to policing the new law.

In any event, our strong advice to all Victorian estate agents is to ready yourself for these new laws and run your business as if they apply from today.

This means:

These measures may at first seem an unnecessary expense, however given individual breaches of the Estate Agents Act can attract a 200 penalty unit fine (which currently equates to $30,334 per offence), or in certain circumstances the loss of commission earned on properties sold, consider it an important investment into your business.

We will continue to provide regular updates as further information comes to hand or as provided by CAV and/or the State Government, but in the meantime (and at the risk of labouring the point), start preparing yourself now for the new law.

You don’t want to be the first estate agent caught out as being non-compliant with the new law when it comes into effect in 2017.

Contact Mills Oakley


John Turnbull | Partner
T: +61 3 8568 9519


Estate Agents Act 1980 (Vic).

[2] Legislative Assembly (Victoria) Daily Hansard, Tuesday 30 August 2016, p.30.

[3] Jane Garrett, radio interview with Neil Mitchell (3AW), 4 March 2016.

[4] Schedule 2, Australian Competition and Consumer Act 2010 (Cth).

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