Real estate agent warned for not telling buyers of new development

A Hamilton real estate agent lured buyers to a bungalow by promising them tranquillity and privacy but failed to tell them about an apartment complex about to be built next door.

Today the Commerce Commission warned agent Shaun Cosgrave of Monarch Real Estate, trading under the Harcourts banner, to abide by the Fair Trading Act.

Deborah Battell, the commission's fair trading director, said although Cosgrave knew about the planned development before the bungalow was listed, he failed to disclose this. He also described the property listed as "out of the hustle and bustle" when the bungalow buyers would not have been interested had they known of the apartment project.

She expressed concern about the real estate industry generally, saying yesterday's warning highlighted ongoing problems with that sector.

"The commission will continue to monitor the real estate industry and will consider enforcement action where accurate information is not made available," she said.

The act was designed to ensure consumers were fully informed when making purchasing decisions, she said. Mr Cosgrave's advertisement was a clear breach of the act, she said.

Deborah Battell said Mr Cosgrave admitted that he knew of the planned apartment project before listing the bungalow. The bungalow buyers complained to the commission, saying they would not have bought the bungalow had they known of the proposed development next door. They had made their own inquiries but no resource consent application had been made for the apartments, so they were unable to discover the information for themselves, she said.

Meanwhile, in separate proceedings the Real Estate Institute has itself found a group of agents guilty of breaching industry standards and codes of ethics.

The bungalow advertisement by Monarch:

"Step out of the hustle and bustle and enter a property that exudes a quality of warmth and tranquillity, quite simply your quiet escape"