An agent's brochure for a Penrith unit says 'This unit will double in value within five years'. The agent has no data behind the claim. How is the statement treated?
Correct Answer
B) As misleading, since a prediction needs reasonable grounds
NSW guidance on misrepresentation notes that under section 4 of the Australian Consumer Law, a representation about a future matter made without reasonable grounds is taken to be misleading. Untrue or unsubstantiated predictions about property values or returns are misleading, and in volatile markets clients should be told of the uncertainty.
Why This Is the Correct Answer
A prediction without reasonable grounds is treated as misleading.
Why the Other Options Are Wrong
Background Knowledge for Consumer Protection
Exam Tip for Consumer Protection
Common Mistakes to Avoid on Consumer Protection Questions
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A vendor's solicitor adds a special condition saying the purchaser cannot claim damages for any misrepresentation about the land. How effective is that clause in NSW?
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While listing a home, the agent learns that three years ago it was the scene of a manslaughter. The vendor asks the agent not to mention it to buyers unless they ask. What must the agent do?