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Properties for sale at the embattled Couran Cove are not advertising the fact that there is no access to power and water at the resort.
Key points:
- Real estate ads for properties at the Couran Cove island resort don't state power and water have been disconnected
- Essential services were cut because of a long-running legal dispute involving body corporates
- A law expert says it's legal as long as the issues are disclosed prior to a buyer entering into a contract
But the real estate agents trying to help residents offload their South Stradbroke properties, which have plunged in value, say they inform interested parties about the "positives and negatives" of buying into the body corporate scheme once they make an inquiry.
They insist they are losing money on sales but trying their best to help struggling owners out.
Couran Cove is a mixture of holiday homes and privately-owned residences located a short ferry ride from the Gold Coast.
Essential services were cut from properties in February and April because of a long-running feud involving the five body corporates that control the resort.
The service providers claim the bodies corporate owe more than $25 million in unpaid fees.
But property owners have rejected their accusations, stating that they had paid their levies to the bodies corporate.
The besieged resort is now the subject of numerous legal disputes before the courts, and operators have even called on the Queensland government to intervene — with no success.
The turmoil has led to the closure of the resort and has forced hundreds of residents off the island.
Just 40 residents remain and are determined to stay on the island using generators.
Many of the holiday homes in the resort are now for sale for as low as $85,000.
Meanwhile, a privately-owned home situated on the opposite side of the island, not attached to the resort, is listed for sale for more than $1.5 million.
'Silence can be misleading'
Couran Cove homes being advertised as a "resort style paradise" do not mention that properties are not connected to utilities.
Real estate Institute of Queensland chief executive Antonia Mercorella said that while she understands that Couran Cove operates "under a fairly complex scheme", the advertisements should "expressly" state that utilities have been disconnected.
"When you are marketing a property for sale, where it's an established property in particular, I think there's probably going to be an expectation that if it doesn't have running water and gas and electricity that's likely to need to be expressly stated or disclosed up-front,"she said.
"Certainly disclosed prior to someone entering into a contract to purchase that property."
In some cases, silence or failing to disclose something could also constitute misleading and deceptive conduct under Australian Consumer Law, Ms Mercorella said.
But she said each situation was different, and therefore needs to be assessed on a case-by-case basis.
"To be very clear, a real estate agent, or indeed a vendor or property, isn't required to disclose absolutely everything about that property," she said.
"But certainly, there are certain material matters that need to be disclosed. And similarly, there are statutory requirements to disclose certain matters."
Law experts said it was not misleading and deceptive conduct if an agent disclosed the characteristics of a property to a buyer prior to entering into a contract, despite it not being stated in the real estate ads.
"It really comes down to the circumstances as to whether the non-disclosure of that point misleads or deceives somebody," Gold Coast-based property lawyer Mark Steele said.
"But I would have thought the safest thing to do in these sorts of instances is to disclose it up-front in your advertisement."
Holding out as prices plummet
Critton Astras has been selling apartments and villas at the Couran Cove Island resort for more than a decade.
He said he has been operating at a loss as the property values at the resort plummeted.
A fully furnished waterfront studio apartment would currently cost less than $100,000.
"Two years ago it was triple. That's unheard of," Mr Astras said.
"I've sold, on average, two to three properties a month over the last 10 years. In the past six months, I've sold four."
Mr Astras said he informed interested buyers about the utilities as soon as they made an inquiry.
"I've got an email that I send to anybody that is interested in Couran Cove … the negatives and the positives," he said.
He said he had forgone bigger projects on the mainland to help the owners.
"If a one-bedder in Surfers is selling for $450,000 don't you think that a one-bedder that's waterfront should be selling for the same?" Mr Astras said.
"I've known these people for 11 years and I've formed a lot of friendships. If I'm not involved no-one will help."
Resident Geoff Byers said he and his partner were informed by their agent about the issues plaguing the resort prior to purchasing their waterfront apartment for $115,000 two years ago.
"We needed somewhere to live while we were getting an apartment built and we figured that it was worth taking," he said.
But as the situation evolved they decided to fork out an additional $5,000 to put their property into a company trust.
"If things got really bad they could take the property, but they couldn't touch all my other properties," he said.
He is one of the residents who has chosen to stay, relying on generators for power.
"You've got to run a lead to your fridge, a lead to your washing machine when you want to use it, leads to charging laptops and stuff like that," he said.
"The worst thing is probably the night-time because of the cold because you can't run an electric heater on a generator."
Not giving up
Mr Byers said he chose to stay due to soaring rental prices on the Gold Coast and he refuses to sell his apartment at such a low price.
"I'm a lucky one. There are a lot of people over here that what they own is all they have. They don't have anything else," he said.
"Some of them don't even have a car on the mainland. They've got everything invested in here."
Mr Astra said he would continue to try and sell the properties for as long as it takes.
"I can't let go. I have to help the owners. It doesn't matter if I've sold nothing," he said.
"I believe there's light at the end of the tunnel. I believe this will all be sorted out and the owners will get their island back, and they will be making the decisions on their island."