Going, Going, Gone are the Days of Underquoting

Oct 20, 2016
Reading Time: 2 minutes
Written by Ricky Chan

Since the introduction of new legislation in NSW combating underquoting, price baiting has been kept largely at bay with data indicating that agents’ quotes have become more accurate. However, a recent court decision has shone light on a glaring corporate loophole, allowing defendants, in this case BresicWhitney, to escape liability based on a legal technicality. In response, NSW Fair Trading has moved to clamp down further on the practice of underquoting by amending laws it introduced earlier this year.


In January 2016, the NSW government sought to stop real estate agents understating property prices which caused interested buyers to waste time and money on inspecting properties, getting reports and attending auctions based on misleading estimates of the selling price. At the time, the architect of the NSW legislation, Minister for Innovation and Better Regulation, Victor Dominello, argued that “underquoting is illegal, misleads prospective buyers and undermines the property market”.

Reforms made to the Property Stock and Business Agents Act 2002 (NSW) included:

  1. Introducing clearer rules for agents, prohibiting agents from giving consumers an understated or vague property prices, and
  2. Creating more effective enforcement by requiring agents to provide appropriate documentation to show they have complied with new laws during inspections by a Fair Trading Officer.

Agents who commit an underquoting offence by stating or publishing a price for property that is less than their reasonable estimate of the property’s likely selling price contained in the agency agreement with the seller, are liable to a fine of up to $22,000 and could lose their commission and fees earned from the sale of an underquoted property.

However, in court proceedings brought against BresicWhitney, the defence lawyers successfully argued a legal technicality that under the definition of “employee”, the agents were not employed by the licensee, BresicWhitney. As such, it could not be shown that the company had falsely understated.

Proposed New Reforms

Under the proposed changes, the NSW government will:

  1. Amend the definition of the word “employee” to cover not only employees of real estate agencies but their representatives, independent contractors, subsidiaries or any related entities who act for them.
  2. Introduce a provision that deems anyone employed by a subsidiary of a licensed agent is still recognised as an employee of the company for the purposes of the legislation.


Acknowledging that the BresicWhitney situation was frustrating, NSW Fair Trading has swiftly moved to protect concerned consumers. These amendments are expected to finally bring an end to the illegal practice of underquoting and bring integrity back into the property market. A win for prospective property buyers.

If you feel you have been mistreated under consumer law, through LawPath’s quick quotes service you can get in contact with lawyers experienced in consumer legal affairs.

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