Five things to know about misleading property advertisements

Property advertisements are governed under state and territory rules and regulations that define when something is misleading.

Today, we turn our attention to New South Wales’ Fair Trading and their guidelines around the advertising of real estate, as governed under the Property, Stock and Business Agents Act 2002 as well as the Fair Trading Act 1987.

Firstly, we note that something is misleading or deceptive if “it is likely to lead a reasonable or ordinary member of the class of persons to whom it is directed into error”.

If you are found to have engaged in this conduct, then the maximum penalty is 200 penalty units, which equates to $22,000. However, heftier fines may be imposed for those to also be found to have breached section 30 of Australian Consumer Law, which applies to the sale of land or interest in land. This could see you face a $220,000 fine in the case of an individual, or $1.1 million for a company.

To avoid the section 30 fine, you must not make false or misleading representations about the nature of the interest, the price payable, the location, the characteristics, the use to which it is capable of being put or may lawfully be put or the existence/availability of facilities.

This covers advertisements in newspapers, periodicals or other publications, public displays (on buildings, vehicles, place or in the air), in any document sent or delivered to anyone or left at the premises, on radio or television, or on a website or email.

ONE

Omission or silence around facts can be misleading. Your intent to mislead or not is irrelevant. What matters is the likely effect on reasonable or ordinary members of your target audience and the overall impression created.

TWO

It is not limited to your words – the photographs can be scrutinised for misleading conduct as well. Views and facilities are particularly important to focus on getting right.

Here are six scenarios of photographs, from Fair Trading, that are “undesirable” and likely to mislead:

• A water view or scenery, placed next to a photograph of a house, makes it difficult to ascertain whether the water view or scenery can be seen from the house or whether the photograph is a 'location shot'
  
  
• A beach scene with the wording 'minutes to this!' typed above the photograph does not give a clear indication of the distance from the property to the beach shown in the photograph
  
  
• A park and beach with the wording 'opposite home' where, in fact, this view cannot be seen from the property
  
  
• A house placed next to a photograph of a beach with the wording 'stroll to beach' printed underneath the photograph does not give a clear indication of the distance from the property to the beach
  
  
• A beach with the wording '90 seconds walk to waters edge, not actual view' printed at the bottom of the photograph needs more clarification
  
  
• A photograph on the internet of a beach with the wording '100 metres from beach' printed at the bottom of the photograph needs more clarification.

THREE

“Touching up” of photographs isn’t as harmless as you might think. If you’re hiding undesirable characteristics or enhancing other features, rather than just making the photos a bit more presentable, then you could be misleading the buyers.

This includes modifying, or allowing modification, of photographs so they no longer “truthfully and fairly represent that property”. Removing or adding features digitally in a manner than changes the appearance of a property is potentially misleading. Similarly, zooming in on a view that can be seen from the property, to make it appear closer, is also potentially misleading.

FOUR

It's acceptable to use obvious labels to clarify exactly what the photograph is in relation to the property, which will allow real estate agents to take great photographs of nearby, but not visible, beaches and amenities.

Photographs of views taken from the property itself - no label required.

Photograhs of views in the immediate area, but not taken from the property - labelled 'LOCATION SHOT'.

This label should only be applied to photographs of facilities and services in the "immediate surrounding area of the property".

FIVE

When it comes to wording, there's a vague way and a more appropriate way, suggested by Fair Trading. This is particularly the case for descriptions in reference to distances - the more specific and detailed the better.

For instance, 'close to [feature e.g. beach, shops]' is not as favoured as 'Two kilometres to [feature]'. The term "within walking distance" is also preferably replaced with the real distance.

Fair Trading warns the real estate agents are responsibly for the information they provide, and claiming that buyers should make enquiries as to the accuracy of the information is not enough.

Despite this, many real estate agents provide a comment in their advertisements noting that the information should be checked by the buyer.