The Agent Bought the Property Himself. The Maximum Fine? Just $5,000

Consumer Protection issued Ideal Realty WA a formal warning over the Kenwick sale and no penalty at all. The company that bought the property was registered at the agency's own office address on the day the offer was made. In Victoria this week, a regulator is in the Federal Court seeking up to $2.5 million from individual agents.

A Perth agency has been formally warned by Consumer Protection after two of its licensees bought a client's home through a company they owned, in a matter that says more about the ceiling on Western Australian penalties than it does about one transaction.

The details were reported by the ABC on 25 August, in the first of two investigations into the same agency. Real Estate Today covered the second, concerning the accuracy of sales figures submitted for REIWA's awards, on Friday.

Consumer Protection issued Ideal Realty WA a formal warning, which the department issues where it believes there is a prima facie case that consumer law has been contravened. It alleged conflict of interest and breaches of the code of conduct provisions covering a client's best interests, duty of care, honesty, and misleading or deceptive conduct.

No fine was imposed. Under Western Australian law the maximum available would have been $5,000 for an individual and $25,000 for a company.

What happened

Chao "Jack" Wu, who moved to Perth from China and bought the 1970s brick and tile house in Kenwick as his first home in 2020, signed an exclusive selling agreement with Ideal Realty WA on 23 April 2024. He had spent tens of thousands on the property, including driveway work and a granny flat.

Six days later, on 29 April, he contracted to sell for $705,000 to a company called Generation Two Pty Ltd. That company is owned by Roy Li, whose legal name is Liang Li, and Lynn Ding, whose legal name is Lin Ding. Both are licensees at Ideal Realty WA.

Generation Two was registered at Ideal Realty WA's office address on the same day the offer was made, according to the ABC. The sale contract listed a residential address instead, which Li said reflected his postal address at the time.

Text messages from Li to Wu on the day of the offer referred to the purchaser in the third person. One read that the buyer had no finance issue and that Wu could accept or the buyer would make offers elsewhere. Another said it was not easy to hold the buyers too long.

Wu signed a written conflict of interest disclosure roughly six weeks after the contract was signed. He obtained legal advice and a retrospective valuation the following year, which put the property at $800,000, about $95,000 above the sale price. A valuation commissioned by Li put it at $680,000 to $705,000.

After Wu raised the matter, Li paid an additional $10,000 and waived the $10,000 sales fee.

The ABC also reported a Google review from a prospective buyer who said she arrived for a scheduled home open and was told it had been cancelled. Li attributed that to a tenant refusing interior access, and said buyers viewed the exterior and that he had conducted private viewings beforehand.

The rule agents should take from this

Consumer Protection's position, given to the ABC in general terms rather than about this matter, is the part worth pinning to the wall.

It is lawful in Western Australia for a real estate agent to buy a property from their own client. What the agent must do is disclose that interest to the seller before any negotiations take place.

The timing is the entire obligation. A disclosure form signed after contracts are exchanged does not cure a negotiation conducted without one, because the disclosure exists so the vendor can decide whether to negotiate differently, or at all, knowing who sits on the other side.

Li disputes that he failed to disclose. He told the ABC he made his position clear before the offer was made and negotiated with Wu directly, and said that before settlement and before finance, Wu knew the agency principals were the buyers. He said he could not recall the specifics of the messages but believed he wrote in the third person because he was performing two roles at once. He described the timing of the written disclosure as an administrative error and said the agency's procedures had since been reviewed.

On price, Li's position is that the market moved after the sale, and that the property appreciated rather than having been sold under value. On Wu's dissatisfaction, he told the ABC that Wu felt he had lost money but that it was his own decision.

Five thousand dollars

Real estate lawyer Tim O'Dwyer described the formal warning to the ABC as a slap across the knuckles with a feather. He also set out the structural problem in a sentence, which is that a buyer wants the lowest possible price and an agent's duty is to obtain the highest, so an agent buying for themselves sits in a clear conflict.

That is the industry story here, and it is not really about Ideal Realty.

Western Australia's maximum penalty for this category of conduct is $5,000 for an individual. Consumer Affairs Victoria is in the Federal Court on Friday seeking penalties of up to $2.5 million per individual and $50 million per company against a Glen Waverley agency and three of its representatives over alleged underquoting, in a matter Real Estate Today reports separately. Victoria has also legislated to lift its corporate maximum to $100 million.

Same industry, same category of conduct, penalty ceilings three orders of magnitude apart depending on which side of the Nullarbor the agency operates.

For principals in Western Australia, the practical reading is not that enforcement is toothless. A formal warning is a published prima facie finding by the regulator, and it sits alongside a REIWA Professional Standards Tribunal process examining the same agency's awards submissions. Reputational exposure in a market this size does not track the size of the fine.

But an agency weighing compliance investment against risk in Western Australia is looking at a maximum financial consequence that would not cover a month of marketing. Whether that remains defensible is a question for the state, and it is being asked in a week when another regulator is seeking penalties five hundred times larger.

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Reporting on the Kenwick transaction was published by the ABC on 25 August 2026. Real Estate Today has relied on that reporting and on Consumer Protection's published position. A formal warning reflects the department's belief that a prima facie case exists and is not a finding by a court or tribunal. Roy Li's responses, as given to the ABC, are set out above.