Misleading use of photographs to sell a property
Issued 16 November 2001/114
Orewa real estate agent pleads guilty to the misleading use of photographs to sell a property
The use of misleading photographs in its promotion of a property for sale has cost Orewa real estate agent Olsen and Everson Ltd, trading as Olsen-Everson, $2,750 in the North Shore District Court.
Olsen-Everson pleaded guilty to breaching section 14 of the Fair Trading Act. This is the second real estate agent to be prosecuted over similar breaches in the North Shore District Court in the last three months. In September, Sails Realty from Mangawhai Northland was fined $2,000 for a similar breach. In both cases, the photographs showed a beach view that was not attainable from the properties.
Commerce Commission Chair John Belgrave said the Commission would continue to use court action to reinforce its messages, but now that it has established some court precedents, it expected the Real Estate Institute to take a proactive role in ensuring its members complied with the Fair Trading Act.
"Industry bodies have an important role to play in protecting those members who play by the rules, and they should not rely solely on the Commerce Commission to keep their other members in line," said Mr Belgrave.
In the 2000/2001 financial year, the Commission received 276 complaints and enquiries about real estate issues, an increase of 60% over the previous year. The Commission has taken six prosecutions in the last 12 months, and has three more cases in court at present. "We know that the real estate industry is a highly competitive market place. However any unfair advantage achieved through misleading advertising not only hurts consumers, but also those traders who have been advertising honestly."
Olsen-Everson used a photograph of an elevated view of Orewa Beach in the advertisements to attract prospective purchasers to the property. The overall impression created by the photograph was that it represented the view from the property, which was not the case.
An agent representing Olsen-Everson advised the Commission during its investigation that at the time the property was listed, there was pressure to market the property for an auction. As the weather was poor on the day he went to photograph the property, and rather than wait for better weather, he decided to use photos of Orewa Beach obtained from the Rodney District Council. The advertisements appeared at least twice in The Coaster Property Guide and once in the North Shore Property Press.
Judge Barry Morris said that by agreeing to plead guilty, the defendant was acknowledging that the photograph had "overpainted" or "embroidered" the view from the property.
The Orewa branch of Olsen-Everson was one of 20 branch offices in the Auckland region. It changed ownership on 1 December 2000 just after the offending advertising appeared. It still operates using the Olsen-Everson brand name, under a franchise arrangement.
Olsen-Everson was also ordered to pay $130 court costs.