CONSUMERAFFAIRSVICTORIA

ENFORCEABLE UNDERTAKING

Pursuant to section198 of the Australian Consumer Law and Fair Trading Act 2012

The commitments in this Undertaking are offered to the Director of ConsumerAffairs Victoria by:

NEXT GEN REAL ESTATE PTY LTD

ACN 158 289 322

of SHOP 5 249 STUD ROAD, WANTIRNA, VICTORIA, 3152

– and –

ACHILLES MANTSOS

Date of Birth: 20/11/1969

in his capacity as Director and Officer in Effective Control of Next Gen Real Estate Pty Ltd.

The Director of Consumer Affairs Victoria

  1. The Director of Consumer Affairs Victoria (“the Director”) is a public official whose office is provided for under section107 of the Australian Consumer Law and Fair Trading Act 2012 (“the ACLFTA”).
  2. The holder of that office is responsible for the administration of the ACLFTA, together with Victoria’s other consumer protection legislation, including the Estate Agents Act 1980(“EAA”) and the Australian Consumer Law (“the ACL”), which has been enacted as a law of Victoria under Part 2.2 of the ACLFTA and known as the Australian Consumer Law (Victoria) (“the ACL (Vic)”).
  3. Schedule 1 of the ACLFTA provides that the EAAis a Consumer Act under the ACLFTA.
  4. Under section 198 of the ACLFTA, the Director may accept a written Undertaking from a person in connection with:

a)a matter in relation to which the Director has a power or function under the ACLFTA; or

b)a matter relating to a contravention of any other Consumer Act.

Background

  1. Next Gen Real Estate Pty Ltd ACN 158 289 322(“the Company”), trading as Harcourts Wantirna, is a licensed estate agent with the licence number 74139.
  2. The Company’s registered office and principal place of business is at Shop 5 249 Stud Road, Wantirna, VIC 3152.
  3. Achilles Mantsos (otherwise known as Archie Mantsos) (“Mr Mantsos”) is a licensed estate agent under the EAA with the licence number 74138 and is the sole director of the Company.
  4. At all material times, Mr Mantsos was the Officer in Effective Control (“OIEC”) of the estate agency business of the Company.
  5. Emilie Jordanou (“Ms Jordanou”) has been employed as agent’s representative of the Company since25 March 2015.

Legislation

  1. On 1 January 2011, the ACL, set out in Schedule 2 to the Competition and Consumer Act 2010 (C’th), came into effect. Part 2.2 of theACLFTAapplies the ACL as a law of Victoria, which is known as the ACL (Vic).
  2. Section 18 of the ACL (Vic) provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
  3. Section 30(1) of the ACL (Vic), inter alia provides that a person must not, in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of an interest in land or in connection with the promotion by any means of the sale or grant of an interest in land:

a)make a false or misleading representation concerning the price payable for the land.

  1. Section 47A (3) of the EAA provides that a seller must be given an estimated selling price, whereby if an estimate is expressed as a price range, the difference between the upper and lower limits of the range must not exceed 10% of the amount of the lower limit of the range.
  2. Section 47C (2) of the EAAprohibits the making of false representation to prospective buyers, whereby in making any statement while marketing the real estate, the agent or representative must not state as his or her estimate of the selling price of the real estate, a price that is less that the estimated selling price, or in the case of a price range, less than the lower limit of that range, stated in the engagement or appointment.

ConsumerAffairsVictoria Investigation

  1. Between April and July 2015, Consumer Affairs Victoria (“CAV”)received 17 complaints in relation to the conduct of the company. The majority of the complaints alleged that the company, or its agents, employees or representatives, had in the course of marketing residential properties for auction or private sale, misrepresented the purchase price of that real estate by advertising them lower than their market value.
  2. Between August and September 2015, CAV Inspectors conducted a range of enquiries which identified the following:

a)Fivepropertieswere advertised on with a price that was likely to mislead potential purchasers. In that the Company caused to be displayed (and therefore advertised) within a lower price range than what it is estimated to sell on the ESP. The blind price, otherwise known as non-explicit search price, contains data which is not visible to the public but utilised by an estate agent to populate the display of a property in search results when a consumer utilises a real estate advertising website and searches between a minimum and maximum price. Thesefive properties contained a blind price which was significantly less than the lower limit of the ESP on the sales engagement. In instances where a consumer has set a maximum price parameter in their search, the returned search results may containproperties with a higher ESP than the maximum price parameter as set by the consumer, thereby misleading the consumer.

b)Sevenproperties in which agents representatives employed by the Company had provided an Estimated Selling Range (“ESR”) in which the difference between the upper and lower limits of the range exceeded 10% of the amount of the lower limit of the range.

c)Thirteen properties marketed for sale by the Company were advertised on with a price under the Estimated Sales Price (“ESP”) or ESR on the Exclusive Sales Authority (“the Authority”).

Contraventions of the Act

Section 18 and 30 of ACL(Vic)
  1. CAV’s investigation identified that the Company routinely advertised properties it was engaged to sell on the online classifieds platform CAV is aware that in posting a property for sale on this platform an agent has the sole responsibility for uploading content and setting the search price or price range at which the property will appear, even if the property is advertised without an explicit price.
  2. The following properties, listed by the Company, were advertised with a non-explicit search price, which results in the property appearing in a list of properties generated by an internet search for properties within a particular price range, nominated by consumers. This conduct is likely to result in consumers who set a ‘max price’ parameter in their search being presented with search results that actually have a higher ESP, without being informed of that fact. This implied representation is likely to mislead consumers.
  • 5 Greenlow Avenue, Wantirna

ESR: $560,000 - $620,000

ADVERTISED WITH NON-EXPLICIT SEARCH PRICE: $490,000

  • 10 Eton Square, Wantirna

ESR: $690,000 - $750,000

ADVERTISED WITH NON-EXPLICIT SEARCH PRICE: $640,000

  • 32 Koomba Road, Wantirna

ESR: $900,000 - $990,000

ADVERTISED WITH NON-EXPLICIT SEARCH PRICE: $750,000

  • 6 Courtney Square, Wantirna

ESP: $650,000 – $715,000

ADVERTISED WITH NON-EXPLICIT SEARCH PRICE: $600,000

  1. By reason of the matters set out in paragraph 17 to 18above, the Director considers that the Company has, in trade or commerce, engaged in conduct that was misleading and deceptive or likely to mislead or deceive contrary to section 18 of the ACL (Vic).
  2. Further the Director considers the Company, through the representations outlined in paragraph 18 above has in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of an interest in land or in connection with the promotion by any means of the sale or grant of an interest in land made false or misleading representations concerning the price payable for the land, in contravention of section 30 (1) of the ACL(Vic).
Section 47A (3) of the EAA
  1. CAV identified that the company had, in relation to seven properties it had been engaged to sell during the period 26 September 2014 to 20 May 2015 and listed below, provided an ESR in which the difference between the upper and lower limits of the range exceeded 10% of the amount of the lower limit of the range.
  • 1/464 Boronia Road, Boronia

The ESR listed in the Authority by Mr Mantsos,acting as the listing agent, was $390,000 to $439,000, which exceeds 10% of the lower limit of the estimated range.

  • 26 Suffern Avenue, Bayswater

The ESR listed in the Authority by Mr Mantsos, acting as the listing agent, was $440,000 to $494,000, which exceeds 10% of the lower limit of the estimated range.

  • 92 George Street, Scoresby

The ESR listed in the Authority by Mr Mantsos, acting as the listing agent,was $490,000 to $549,000, which exceeds 10% of the lower limit of the estimated range.

  • 5 Wimbourne Court, Wantirna

The ESR listed in the Authority by Mr Mantsos, acting as the listing agent, was $580,000 to $650,000, which exceeds 10% of the lower limit of the estimated range.

  • 16 Suffern Avenue, Bayswater

The ESR listed in the Authority by Mr Mantsos, acting as the listing agent, was $490,000 to $550,000, which exceeds 10% of the lower limit of the estimated range.

  • 31 Avoca Way, Wantirna South

The ESR listed in the Authority by Mr Mantsos, acting as the listing agent, was $670,000 to $750,000, which exceeds 10% of the lower limit of the estimated range.

  • 13 Brentwood Drive, Wantirna South

The ESR listed in the Authority by Ms Jordanou, acting as the listing agent, was $590,000 to $659,000, which exceeds 10% of the lower limit of the estimated range.

Section 47C(2) of the EAA
  1. CAV identified that the Company had, in relation to thirteen properties it had been engaged to sell during the period 7 June 2014 to 14 May 2015 and listed below, expressed a price range for the sale of the real estate published in online advertisements or in email correspondence, which was less than the ESP or ESR on the sale authorities held by the Company in respect of those properties.
  • 2 Fortescue Court, Wantirna

The ESR listed in the Authority was $600,000 to $660,000 and the property was advertised on realestate.com.au from 6 July 2015 for “$590,000 plus”. The listing agent was Mr Mantsos.

  • 5 Greenlow Avenue, Wantirna

The ESR listed in the Authority was $560,000 to $620,000 and the property was advertised on realestate.com.au from 22 July2014 for“$490,000 plus” and from 30 July 2014 for “$540,000 plus.” The listing agent was Mr Mantsos.

  • 68 Tate Avenue, Wantirna

The ESR listed in the Authority was $690,000 to $750,000 and the property was advertised on realestate.com.au from 6 November 2014 for “$590,000 plus” and from 11 November 2014 for “$580,000 plus.” The listing agent was Mr Mantsos.

  • 22 Phillip Road, Knoxfield

The ESR listed in the Authority was $480,000 to $528,000 and the property was advertised on realestate.com.au from 17 September 2014 for “$460,000 plus”. The listing agent was Mr Mantsos.

  • 10 Eton Square, Wantirna

The ESR listed in the Authority was $690,000 to $750,000 and the property was advertised on realestate.com.au from 25 November 2014 for “$590,000 plus”. The listing agent was Mr Mantsos.

  • 10 Gidgee Court, Wantirna South

The ESR listed in the Authority was $540,000 to $594,000 and the property was advertised on realestate.com.au from 11April 2015 for “$490,000 plus”. The listing agent was Mr Mantsos.

  • 2 Traydal Close, Wantirna

The ESR listed in the Authority was $700,000 to $770,000 and the property was advertised on realestate.com.au from 15 December 2014 for “$600,000 plus”. The listing agent was Mr Mantsos.

  • 281 Mahoneys Road, Forest Hill

The ESR listed in the Authority was $590,000 to $650,000 and the property was advertised on realestate.com.au from 29 October 2014 for “$550,000 plus”. The listing agent was Mr Mantsos.

  • 6 Courtney Square, Wantirna

The ESR listed in the Authority was $650,000 to $715,000 and the property was advertised on realestate.com.au from 30August 2014 for “$580,000 plus”. The listing agent was Mr Mantsos.

  • 32 Koomba Road, Wantirna

The ESR listed in the Authority was $900,000 to $990,000 and the property was advertised on realestate.com.au from 29 October 2014 for “$750,000 plus”. The listing agent was Mr Mantsos.

  • 2/2 Lennox Court, Scoresby

The ESR listed in the Authority was $490,000 to $539,000 and the property was advertised on realestate.com.au from 13November 2014 for “$470,000 plus”. The listing agent was Mr Mantsos.

  • 1 Tudor Court, Wantirna

The ESR listed in the Authority was $700,000 to $770,000 and the property was advertised on realestate.com.au from 11December 2014 for “$580,000 plus”.The listing agent was Mr Mantsos. Email correspondence was sent to Mr Mantsos on 10December 2014from the vendor of 1 Tudor Court stating “the estimated price of our property in the Exclusive Auction Authority form is stated between $700,000 and $770,000…as for your suggestion of starting the price of $580,000 on the advertisements/internet, we are agreeable for you to go ahead with this strategy.”

  • 133 Harold Street, Wantirna

The ESR listed in the Authority was $650,000 to $715,000 and the property was advertised on realestate.com.au from 10 March 2015 for “$590,000 plus”.The listing agent was Ms Jordanou.

Acknowledgment of the Contraventions

  1. The Company acknowledges that, by engaging in the conduct referred to in paragraphs 17 to 22 above, the Company contravened sections 18 and 30 (1) of the ACL(Vic); and sections 47A (3) and 47C(2) of the EAA.
  2. Mr Mantsos acknowledges that, by engaging in the conduct referred to in paragraph 21 and 22 above, he personally contravened section 47A (3) and section 47C (2) of the EAA and permitted the contraventions of sections 47A (3) and 47C (2) of the EAA.
  3. The Company and MrMantsos, in his capacity as OIEC, seek to address these contraventions by offering this Enforceable Undertaking to the Director.

The Enforceable Undertakings

Compliance program
  1. The Company and its OIEC, hereby undertakes to the Director, pursuant to section 198 of the ACLFTA, that it will, at its own expense, establish within three(3) months of the date of the execution of the undertaking, a compliance program which meets the requirements in Annexure“A” and maintain the compliance program for three (3) years from the date on which it is established.
  2. The Company provide to the Director, within three months of signing this undertaking, a signed affidavit from the OIEC, verifying that it has implemented the compliance program.
Publication of Notice
  1. Mr Mantsos, personally and on behalf of the company, undertakes to the Director, pursuant to section218 of the ACL(Vic), that they will, within 14days of the commencement of this Undertaking, cause to be displayed prominently and conspicuously for a continuous period of 3months at or near each the reception desk in each of its existing or new premises from which it carries on real estate services, a Notice in the form of Annexure“B” below to this Undertaking. Each such Notice:

a)be a minimum size of 30cm x 42cm (A3 size);

b)use a minimum type size of 12point Times New Roman or equivalent; and

c)be in full colour.

  1. Mr Mantsos, personally and on behalf of the Company, undertakes to the Director, pursuant to section 218 of the ACL (Vic), that they will retain and continue to operate the website accessible via uniform resource locater at the web address (URL) and within 14 days of commencement of this Undertaking, cause to be published, the Notice in the form of Annexure B below, to be published on the website (or if any such URL is replaced or change, the Internet home page of the corresponding website), for a period of 3 months from the date of this Undertaking and to use its best endeavours to ensure that:

a)the Notice is viewable by clicking through a “click-through” icon located on the website or any replacement website and;

b)the “click-through” icon referred to in the previous paragraph is located in a central position on the page first accessed when the user opens to the home page of the website or any replacement website.

Contribution to the Victorian Consumer Law Fund
  1. The Company, undertakes, that within 30 days of the commencement of this undertaking it will pay the sum of $60,000to the Victorian Consumer Law Fund, created under section 134 of the ACLFTA. The Company will make 6 (six) payments of $10,000 per payment, in accordance with the following payment schedule:

a)$10,000 payable by 28 February 2017;

b)10,000 payable by 31 March 2017;

c)$10,000 payable by 30 April 2017;

d)$10,000 payable by 31 May 2017;

e)$10,000 payable by 30 June 2017; and

f)$10,000 payable by 31 July 2017.

Commencement and Duration of the Undertaking
  1. The Enforceable Undertaking commences when:

a)it is executed by Mr Mantsos, personally, and on behalf of the Company; and

b)it is accepted and executed by the Director; and

c)notice is given, in writing, by the Director’s staff to Mr Mantsos or his representative, of the happening of the matters contained in paragraph 31(b).

  1. The term of the Enforceable Undertaking shall be for a period of 3 years from the date the Enforceable Undertaking is accepted by the Director.
Public Nature of Undertaking
  1. The Company and Achilles Mantsos acknowledge that:

a)the Director will register this Enforceable Undertaking in the Register of Undertakings and make this Enforceable Undertaking available for public inspection pursuant to section200 of the ALCFTA;

b)the Director and/or the Minister for ConsumerAffairsVictoria may, from time to time, publicly refer to this Enforceable Undertaking;

c)this Enforceable Undertaking in no way derogates from the rights and remedies available to the Director arising from any conduct described in this Enforceable Undertaking that arises from conduct outside the relevant period or from future conduct (including the right to pursue compensation for or in the name of any consumer);

d)this Enforceable Undertaking in no way derogates from the rights and remedies available to any other person or entity (including any other regulatory agency) arising from any conduct described in this Enforceable Undertaking that arises from conduct outside the relevant period or from future conduct; and

e)this Enforceable Undertaking in no way derogates from the obligation of the Company, its officers, employees, and agents to fully comply with the provisions of the Act and associated regulations.

EXECUTION

NEXT GEN REAL ESTATE PTY LTD

ACN 158 289 322

Signed by:

(PRINT NAME) ______

in his capacity as proper officer on behalf ofNext Gen Real Estate Pty Ltd.

In the presence of:Witness:......

(PRINT NAME) ______

EXECUTION

ACHILLES MANTSOS

Date of Birth: 20/11/1969

Signed by:

Achilles Mantsos

in his personal capacity.

In the presence of:Witness: ......

(PRINT NAME) ______

Accepted by:

The Director of ConsumerAffairsVictoria, pursuant to section198 of the ACLFTA.

Dated: ……………………………………………2017

......

Simon Cohen

Director of Consumer Affairs Victoria

Annexure “A”

COMPLIANCE PROGRAM

The Company will establisha Compliance Program that complies with each of the following requirements:

Appointments
  1. The Company will:

a)appointa Director or a Senior Manager with suitable qualifications or experience in corporate compliance as Compliance Officer with responsibility for ensuring the Compliance Program is effectively designed, implemented and maintained;