Landlords using Ferry Real Estate (Townsville) to manage their properties will get credits of some management fees after Australian Competition and Consumer Commission intervention.
The corporate owners of Ferry Real Estate (Townsville) have provided court enforceable undertakings to the ACCC after investigations into management fee increases to client landlords in May this year.
The ACCC investigations followed a number of complaints from landlords about fees for residential properties that Ferry managed under property management agreements. The complaints related to a rise in Ferry's total property management fees from 7.5% to 8.8% in May this year. At the time Ferry advised that it would not increase fees again to take into account the Goods and Services Tax in July and the new management agreements advised that the 8.8% included GST. The ACCC formed the view that Ferry may have anticipated the GST by increasing its fees from 7.5% to 8.8% on 1 May 2000. The ACCC believes that Ferry was at risk of breaching the price exploitation provisions of the Trade Practices Act 1974.
Ferry has acknowledged that its conduct may have raised concerns under the price exploitation provisions of the Act. Ferry has agreed to provide undertakings to the ACCC. As part of these, Ferry will send corrective letters of apology to landlords who paid the increased management fees and will provide credits for the amounts the ACCC believes were overcharged.
Ferry will also review its costs to ensure any cost savings arising from the New Tax System changes are passed on to its customers and it will institute a trade practices compliance program to ensure that future conduct is less likely to contravene the Act.
"By compensating affected landlords and putting in place steps and measures to ensure it is aware of and responsive to trade practices issues, Ferry has ensured a positive result for its landlords", ACCC Chairman, Professor Allan Fels, said today.
"The ACCC welcomes the undertakings and encourages all real estate agents to take the same steps in reviewing their fees to landlords and other clients to ensure that they pass on savings arising from the New Tax System changes and that any GST related fee increases can be justified".