Agency busted for overcharging clients

By Reporter 22 January 2016 | 1 minute read

A real estate agency has found itself in hot water, after several landlords in one of Western Australia's largest mining towns were overcharged for services provided between 2011 and 2014.

cash bunch

An agency in Western Australia has been reprimanded and fined $5,000 by the State Administrative Tribunal for overcharging clients for property inspection and management fees.

Seaville Holdings, trading as First National Real Estate Karratha, charged the owners of four properties more than what was contracted for property inspection fees between December 2011 and March 2014, according to Consumer Protection WA.

The agency also overcharged four other property owners for management fees between November 2011 and March 2015.

Paul Brady, principal of First National Karratha, said the overcharging occurred due to an administrative mistake with clients already under contract.

“Unfortunately, it was an administrative error that had taken place a while back, which negated the GST off some renewals of contracts,” he told Smart Property Investment's sister publication RPM.

“We detected there was a problem and refunded all the money, but we had to disclose it to the Department of Consumer Protection under the statutory auditory requirement and they had a responsibility to ensure that the refunds were made.”

Following an investigation by the Department of Consumer Protection, the agency undertook a review of all its owners’ files and refunded clients more than $19,000 that had been overcharged.

A spokesperson from First National head office told RPM that the group requires compliance with all property management legislation.

“This matter demonstrates that consumers are well protected and that the State Administrative Tribunal recognised instances of overcharging were not deliberate,” the spokesperson said.

Acting commissioner for consumer protection David Hillyard said it’s vital that property managers only charge fees that are agreed to under their property management contracts.

“With proper checks and balances in place, accounting errors should not occur in the management of clients' accounts, especially over such a long period of time,” Mr Hillyard said.

Read more: 

Lending changes not all bad news 

Housing affordability options revealed 

'How I bought nine properties on a modest income - all before 30' 

Construction hits record high

Do I need to conduct a building and pest inspection? 

How to avoid property spruikers and dodgy advice 

Agency busted for overcharging clients
spi logo

Get the latest news & updates

Join a community of over 100,000 property investors.

Check this box to receive podcast updates

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.