Did you have to go to Nemenčina to look at the house in Antakalni? Here’s what you risk for misleading real estate ads | Business

It is also common for developers of real estate projects to upload a photo of one of the twenty houses for sale in the project on advertisement portals. Usually, that one house is the one with the best view, in the best location of the project, already furnished, with the most sought-after area, with the best layout. Upon arrival, it turns out that this house is “reserved by the builder” or “sold even before the start of the reservation”. This is one of the tricks of the sellers to provide misleading information that leads to an internal decision to purchase an object in a project. And after that, what is left for the buyer when you have lived in your dream house in your mind? Just lower the bar and choose from the remaining one or two significantly worse houses.

Another of the most common tricks of sellers is to indicate that the real estate object has a larger area. After that, during the inspection, it turns out that the area includes a terrace or a balcony, or an attic where it is impossible to even stretch out to your full height.

Sometimes when looking at photos of real estate ads, it looks like the house is surrounded by trees, and the ad says that the house is “next to the forest”. After coming a considerable distance to inspect the object, it turns out that there is one poor bush growing on the plot, and the photos were taken from all angles, apparently even lying on the ground, so that only the greenery can be seen in the photos. All this can be recognized as misleading advertising.

What is misleading advertising?

Misleading advertising is not only when false information is provided in the advertisement for the sale of real estate, important information is withheld, but also when the way it is presented can be misleading. For example, if at the initial level of reading information is provided that the house is furnished for the price specified in the advertisement, and after clicking on the link with additional information it will already be indicated that an additional price will be required for the furnishing, such activity may be recognized as misleading advertising.

On 10/19/2023, the State Consumer Rights Protection Service reported that one company was reprimanded for the fact that the company “in real estate advertisements, when advertising premises offered for purchase (“non-standard apartments”, “apartments for sale with occupancy”), did not specifically indicate that only a part of the house is for sale. Explanatory information was provided at the bottom of the ads and can only be seen by clicking on the “Show full description” link. VVTAT assessed that such presentation of information is incomplete and improperly presented, and therefore may mislead users.“

Misleading advertising is not only punishable by a fine, but also damages

For the use of misleading advertising, a fine of up to 3 percent of the income in the current financial year, but no more than 100,000 euros, and for a repeated violation per year – up to 6 percent of the annual income of the previous financial year, but no more than 200,000 euros can be imposed.

“WIDEN” photo/Asta Macijauskienė

It is good to know that a person who has suffered damage due to misleading advertising can claim compensation. Damages may be claimed regardless of whether a real estate transaction is concluded or not. For example, let’s say that the advertisement indicated “city communications”, and the consumer or company representative drove 300 km to inspect it, took statements before inspecting the object, consulted with lawyers about the status of the property, because it was agreed with the seller that in the event of a successful inspection, there would be a contract on the spot preliminary agreement. Later, during the inspection, it becomes clear that there is no possibility to connect to city communications for at least the next decade, and the installation of the well and sewage system is complicated and expensive, and the contract is not concluded. In such a case, if the use of misleading advertising was established, the person could claim compensation for the damage suffered.

Another example is one ad proclaims “Iby investing in this part of the city, you will always maintain the attractiveness and value of real estate!“. The advertiser must prove the truth of their claims in advertising objective evidence that actually exists at the time of publication. If the person who bought the property kept this advertising text and after some time wanted to sell it, but the market value had fallen, in the case of the use of misleading advertising, the buyer of the property could claim compensation from the seller for the difference in value.

Not only consumers can claim damages, but also companies

According to Article 28 of the Advertising Law. regardless of whether or not a real estate transaction has been concluded, compensation for damages suffered as a result of misleading advertising can be claimed by both the consumer and the company or entrepreneurs.

If the claim is based specifically on the use of misleading advertising, it is necessary to know that if the sale of such real estate is not related to the seller’s economic, commercial, financial or professional activities, the claim will need to be based on general civil liability norms, and not on the provisions of the Advertising Law.

Trends in misleading buyers have not changed for a long time

There are a lot of real estate ads that mislead by providing false information, concealing important facts, or misleading the way the information is presented. Similar trends can be observed in real estate advertising portals for a long time.

Unfortunately, despite individual fines, illegal sales practices in the real estate sector are still not effectively curbed. Consumer protection associations also do not pay due attention to this activity.

It is important to be careful and do your homework

Before spending money on checking the legal status of the property listed in the ad, it is recommended to carefully analyze the information provided in the ads, get as much information as possible from the seller during the call, and compare it with publicly available free information.

Unfortunately, some unlucky people, misled by advertisements, buy properties with defects for a much higher price than they would have paid had they known all the facts. The seller is already out of luck, and there is no one to demand compensation from.

Advertisements that conceal real estate defects or provide misleading information inflate market prices. The market would self-regulate this frequent tolerance of violations if the most popular real estate ad portals enabled the comment function. Then very quickly it would become clear that the “real oasis of peace” is at the intersection of two gravel roads, and you will see the city sewers like your ears. Individuals would then make a decision to purchase a property with all the essential information they need to make such a decision, without wasting time and money analyzing and inspecting unsuitable properties. This would potentially adjust the advertised prices of such objects, bringing them closer to real market prices.

Anyone who has been victimized by misleading advertising should not be afraid to defend their rights and contact the supervisory authorities. The more violations are found, the more fines will be imposed, the more aware and careful the business will be, and the more buyers will not be deceived.