Real Estate Victoria: CAV Statement of Information Legislation
Real Estate Victoria: CAV Legislation now in force
In May 2017, changes to the Estate Agents Act 1980 came into effect to strengthen laws against underquoting in Victoria. Underquoting is a practice whereby an Agent provides a price guide lower than market value or their vendor’s selling expectations.
Under the underquoting laws, all Victorian estate agents and agents' representatives have additional obligations relating to:
- the estimated selling price
- comparable property sales
- Statement of Information for prospective buyers, and
- advertising prices, terms and symbols.
Penalties apply to those who do not comply with underquoting laws. Consumer Affairs Victoria inspectors issued 39 infringements worth almost $200,000 to estate agents during the 2018-19 financial year. These laws complement the false and misleading representation provisions of the Australian Consumer Law (ACL).
From 16 September 2019, revised Statement of Information forms will come into effect
Recently, Consumer Affairs Victoria undertook a review of the Statement of Information and supporting documentation in consultation with CoreLogic and other key industry players after a year of use. Consumer Affairs Victoria has now revised the forms and guidelines to ensure more transparency for potential buyers.
The Statement of Information has been modified to include the date on which it was prepared. Additionally, agents can more accurately specify the type of property the median sale price relates to, with a ‘property type’ text box rather than only a choice of house or unit.
Producing a Statement of Information
Agents must prepare a Statement of Information for each residential property they are engaged to sell. All changes are integrated into RP Data and available for your use from the effective date of 16 September 2019.
For further instruction on how to create a Statement of Information using RP Data please see this post - How To Produce A Statement Of Information With RP Data
A Statement of Information must be:
- Displayed at all open for inspections
- Included with online advertising
- Given to a prospective buyer within two business days of a request
- Updated if there is a change in the indicative selling price
A Statement of Information must include:
- An indicative selling price for the property. This may be a single price or a price range of up to 10%. It must not be less than:
- Your estimated selling price
- The seller's asking price
- A price in a written offer that has already been rejected by the seller
- Details of the three most comparable properties, including the address, date of sale and sale price – or – if you did not take into account three comparable properties when setting the estimated selling price, a statement outlining that you reasonably believe there are less than three comparable sales within the prescribed period
- The median house or unit price for the suburb. This may be for a period of between three and 12 months, and must not be more than six months old.
Comparable properties must be:
- Of a similar standard or condition to the property for sale
- Sold in the past six months and be within two kilometres of the property for sale if the property is for sale in the Melbourne metropolitan area
- Sold in the past 18 months and be within five kilometres of the property for sale if the property is for sale outside of the Melbourne metropolitan area
When selecting the most comparable properties, you must take into account:
- The standard and condition of the properties
- The location of the properties
- The date of sale of the properties