Real Estate Agency Practice

Real Estate Agency Advisory Service

We offer Queensland real estate agents the state’s most cost-effective and comprehensive service dealing with issues that come across your desk every day:

  • appointment terms & exclusivity (POA form 6)
  • commission disputes;
  • POA contract compliance;
  • business & residential contract terms;
  • employment contracts & restraints of trade;
  • residential tenancy issues;
  • rent roll sales;
  • shareholder agreements;
  • business acquisitions;
  • selling agent disclosure & intermediary benefits;
  • misleading conduct defences;
  • unfair terms;
  • QCAT claims;
  • disciplinary proceedings;
  • all POA, AFA and ACL issues.
Contact us today

Agent appointments

The terms and conditions that are annexed to an agency’s Form 6 can prove vital in the event of an owner dispute.

Most versions in general usage make owners liable for commission where a sale contract is entered into after the expiration of the appointment.

The terms in general usage do not guarantee payment unless the agent took steps during the term so as to be the effective cause of the sale. Nor do they include an indemnity in favour of the agent for liability arising from the actor neglect of the owner.

Real estate offices must also exercise care in relation to the compliance issues pertaining to exclusive agencies and renewal of appointments.

Solutions to all of these issues are available through QBPL’s Real Estate Agency Advisory Service.

Sales practice

Most contracts require payment of the deposit from “on the day the buyers sign” or “on acceptance” of the contract. What then if a deposit is received into the agent’s trust account by EFT overnight following such an event.

Will the buyer be in breach? Will the agent have failed their duty by not accepting a cheque for payment of the deposit at the time of signing?

Is a special condition required to ensure payment of the deposit by close of business on the date of signing? Should the agent have cautioned the buyer that EFT payment should be made at least 24 hours prior to the due date?

Have immediate access to the answers to all of these questions and more with QBPL’s Real Estate Agency Advisory Service.

Residential property management

Residential Tenancies and Rooming Accommodation Act s 206 (3) specifies that as a consequence of an agent giving his details to a tenant – as required at the start of a tenancy – the agent thereafter “stands in the lessor’s place for a prescribed proceeding” and a “proceeding may be taken against the agent as if the agent were the lessor”.

Is your agency protected against claims by tenants may directly against it rather than an owner? Does your Appointment include an appropriate indemnity to meet such expenses and its legal costs?

If the answer to either of these questions is “no”, your property management office is at substantial financial risk from tenants suing for any deficiency in the property or rental arrangements.

Call QBPL’s Real Estate Agency Advisory Service to discuss a review of your standard Appointment terms.

Effective cause of the sale

Australia’s High Court decided as long ago as 1977 that the proper test for measuring commission entitlement is whether an agent was “the effective cause of the introduction of the purchaser which resulted in a sale” and not the nexus between the agent and the buyers signing on the dotted line.

To be sure that your agency is protected to the maximum extent for commission recovery even if an owner engages another agent to finalise a sale, let QBPL conduct a review of your processes and forms.

Property Management add-ons

Can managing agents charge a mark-up for a service provided to owners eg mowing and landscaping?

POA s 90 defines – in relation to ‘expenses’ – the term “actually expended” as excluding any component of agent “benefit”. This would appear to prevent agents from adopting similar practice in respect of appointments entered into under the POA.

Can management commission for online bookings from aggregators e.g. Wotif? If so, should the commission be calculated by reference to the net owner receipt (after Wotif commission) or on the gross sum?

POA s 88 provides the commission must be worked out on “the actual amount of rent collected”. The construction of the section still leaves this question open.

Commission disputes

Can an owner refuse to pay commission because they are disappointed with an agents marketing performance?

Even if sellers are genuinely unhappy with marketing performance will not constitute a breach entitling termination of an agency agreement. Commission is thus payable regardless.

When could an owner claim that in the event no sale was achieved, the agent must wear the advertising expenses?

To escape commission liability, such a provision would have to be recorded in writing in the Appointment.

When a contract termination results in a compromise payment from the buyer to the seller, how can the agent be assured of receipt of its commission? Are the standard Appointment terms sufficient?

What if an agent introduces a buyer during exclusive period but the owner sells to a different buyer immediately after the end of the agency period at the same price and on the same terms as the agents buyer had offered?

Call QBPL’s Real Estate Agency Advisory Service to discuss a review of your standard Appointment terms.

Employees

Agencies often employ sales staff on a commission basis as contractors. But can it be assumed they are contractors rather than employees?

The answer to that question whether many of the following – National Employment Standards, paid annual leave, PAYG tax responsibility, superannuation & workers comp to name the main ones – apply.

Agencies can answer this question by using the ATO Decision tool.

How important is an employment agreement? Without one, the agency

  • may be unable to claw back advances made on commission;
  • may be a unable to recover “private” commissions received if a sales person effects sales in his or her own name without any knowledge of the agency;
  • will be unable to prevent a property manager from poaching listings if he or she leaves to start their own business or works for a competitor

QBPL can expertly provide the employment agreements your agency requires.

Conduct standards

the “code of conduct” now court “Conduct Standards” are contained in the Property Occupations Regulation. other requirements are contained in the Property Occupations Act.

Among other things, agents must act on clients instructions and must avoid conflicts of duty and must cease to be involved in a transaction where a conflict between their own interests and that of a client occurs.

Property ownership and property description must be verified before a listing a property for sale or lease is taken.

They should not accept an appointment if there is one current in favour of another agent.

An agent must not act more than one party in a transaction thus would be a contravention for one person in an agency to act as sellers agent and another to act as buyer’s agent, each charging a commission.

You may also be interested in:

3 things to consider before choosing your business lawyers

Will they add value?

QBPL team members have all the technical skills and offer a fresh outlook for how to achieve your business objectives.

Having a sense for business and being able to leverage expertise for the benefit of your business can add outstanding client value. Call today.

Are they efficient?

Does your commercial law firm deploy advanced systems and technology that streamlines processes to reduce client costs and provide transparency?

QBPL provides client side access to document and critical transaction details  – which means quicker turnaround times, lower communication costs and faster results.

Are they communicative?

Commercial legal practice is not about forms and privacy policies. Your Brisbane business lawyer should be on the front foot with regular updates relevant to your business or industry.

Your interests should be their foremost interest. At QBPL your success is our success.

Get in touch