More than half of Australian real estate professionals say client expectations have intensified in the past two years. That’s due to heightened regulatory scrutiny (such as of the NSW rental market and money laundering), malpractice investigations, plus wider trends in the insurance market.
And with those issues comes a higher risk of claims.
From misleading advertising disputes to injuries on site, the sector is seeing a noticeable uptick in legal action, according to an insurance industry leader. Even experienced agents and property managers are being caught out, sometimes over small oversights that quickly snowball.
Why real estate professionals are facing more claims
The property market has always been volatile, but since the pandemic, pressures have grown across several fronts.
There’s been a rise in:
Market instability
Changes in property values that lead to buyer or seller dissatisfaction.
Policy changes
Tighter laws around rental listings, disclosures, and underquoting.
Client scrutiny
An expectation of near-total transparency in advertising and communications.
Missteps in any of these areas can leave professionals open to legal action, even if unintentional. Insurance helps protect against these risks, but isn’t the be-all-and-end-all—prevention is key.
The most common professional indemnity (PI) claim types
Here’s what the trends in professional indemnity insurance for real estate show are the highest types of claims:
- Property mismanagement: Landlords alleging financial losses due to poor maintenance or delayed repairs.
- Tenant injuries: Claims stemming from hazards, including broken stairs, loose floorboards or mould infestations.
- Misleading listings: Incorrect or missing details in advertising, such as not disclosing known defects whether printed, online, on radio, TV, YouTube video, or personal communications with potential buyers or tenants.
- Valuation disputes: Buyers or sellers claiming financial harm due to inaccurate pricing.
- Contract errors: Overlooking legal clauses or making errors that lead to disputes or losses.
Even seemingly minor mistakes—think outdated property image or exaggerated rental income estimate—can trigger a claim.
How to lower your risk exposure
However, most of these risks are manageable with the right strategies in place.
Real estate businesses can reduce their exposure with these day-to-day practices:
Routine inspections:
Check and document property condition regularly, especially before, during and after tenancies.
Transparent advertising:
Ensure all property features and defects are clearly listed and photographed.
Solid documentation:
Keep detailed records of client interactions, contracts, and repair requests.
Ongoing training:
Make sure all staff understand relevant laws and professional standards.
Legal reviews:
Take your time doing contract checks as small oversights can carry big consequences.
Insurance updates:
If your business has changed in size, staff, or service offerings, your cover may need adjusting.
Clear communication:
Keep your clients in the loop during every step of a transaction.
Online platforms, such as PropertyMe, Console Cloud, and PropertyTree are used widely by real estate agents and landlords in Australia to create an accessible, single source of truth about each property. Using such platforms streamlines routine tasks like rent collection and maintenance tracking, saving time and reducing errors. They also improve tenant communication, offer real-time insights for better decisions, and boost financial tracking—leading to greater efficiency and tenant satisfaction.
As well, you might already be (or considering) using generative artificial intelligence to draft and/or finesse your marketing. The most accurate Gen-AI, Perplexity (according to TechRadar), says such platforms can help Australian real estate agents write better, truthful, and compliant marketing copy by:
- Streamlining property descriptions to target audiences while avoiding misleading euphemisms.
- Helping ensure compliance by cross-referencing advertising guidelines and consumer protection laws (but do a manual check of that, too).
- Improving efficiency and personalisation for specific marketing channels, saving agents time and maintaining accuracy and relevance for the marketing campaign.
Watch for hidden risks in advertising and disclosure
Underquoting, failing to disclose building defects, or vague language in property ads can land agents in hot water.
The Australian Competition & Consumer Commission (ACCC) states that all real estate advertising must be factual and not misleading. Don’t engage in puffery or use vague claims such as ‘best street’ or ’huge development potential’ without documentation to back it up.
If you’re not sure if your marketing copy is in dodgy territory, check the ACCC’s advertising and selling guide. State-government-based resources such as from your Fair Trading or Consumer Affairs departments can also help. Plus, Property Management Virtual Assistant offers its update on how to spot and avoid misleading real estate advertising.
Being transparent is best practice and a compliance requirement.
Insurance still matters—but it’s not everything
Beyond proactivity, the right insurance coverage is still a key part of risk management.
Professional indemnity covers you for legal costs and compensation if a claim arises. Public liability protects against physical injuries—like a client tripping at an inspection—and cyber cover is increasingly vital with online scams targeting the real estate sector.
As your broker, we’ll review your policies, assess new risks, and make sure your cover grows with your business. Whether you’re managing rentals or leading a team, we’ll help keep your protection in step.
Let’s get ahead of any claim before it happens.