The Agents Licensing Board has formally reprimanded an Alice Springs real estate agency over misleading statements and advertisements made in the lead-up to the collapse of a building company.
Clients of Framptons First National lodged complaints about the company’s conduct after 12 homes, negotiated through house and land packages with Framptons, were left unfinished when construction company Carey Builders went into liquidation, the ABC reported.
Between 2008 and 2010, the building company’s owner Randal Carey received nearly $2 million in payments by drawing up false building contracts and operating without a builder’s licence.
Earlier this year, Mr Carey pleaded guilty to nine charges of falsely representing himself as a registered builder. He is now serving a jail sentence.
The Agents Licensing Board found two statements published by Framptons First National in 2008 and 2009 were misleading.
A spokesperson for First National told Real Estate Business the Frampton franchisee had marketed and sold land with Carey Buildings in 2008 and 2009.
“First National Frampton's deeply regrets that a small number of its customers were affected by fraudulent actions of the builder,” he said.
“Despite Framptons having satisfied itself concerning the builder’s credentials, the builder’s capacity to execute his contractual obligations deteriorated, he was convicted of fraud, and is currently serving a prison sentence."
One of the complainants Alan Fisher lost hundreds of thousands of dollars when Carey Builders collapsed.
He told the ABC a harsher penalty should have been imposed.
"A reprimand is just a slap on the wrist," he said. "It does not satisfy me as being justice. Even though it would be a small amount, it would show there would have been some sort of of punishment for the company.”
The spokesperson for First National said Framptons had accepted the decision of the board but “it has requested further explanation concerning the rationale behind the reprimand, given the Board’s decision that no further action against Framptons would be taken in relation to the matter”.