The Real Estate Agents Act 2008 (the Act) provides for disclosure of information and other new requirements to protect consumers when they enter into an agency agreement.
Under section 126 of the Act, an agent is not entitled to receive commission or expenses for real estate agency work unless:
- the work is done under a written agency agreement; and
- the agency agreement is signed by, or on behalf of, the client and the agent; and
- a copy of the agency agreement is given to the client within 48 hours after it was signed by, or on behalf of, the client.
The agency agreement also has to disclose the source of all rebates, discounts or commissions that the agent will receive and specify the estimated amount of those rebates, discounts or commissions (refer section 128 of the Act).
An agent will not be entitled to receive any expenses from a client for real estate agency work if information about such rebates and discounts in respect of those expenses is not included in the agency agreement (refer section 128 of the Act).
If the agency agreement concerns a residential property, the agent must give the client a copy of the relevant approved guide before the client signs the agency agreement. The client must give the agent a signed acknowledgement that they have received the guide (refer section 127 of the Act).
How do I disclose rebates, discounts or commissions?
Every agency agreement must contain a statement by the agent about rebates, discounts and commissions. This statement must be as described in Form 1 of the Duties of Licensees Regulations 2009.
- Form 1 : Disclosure of rebates, discounts or commissions form [PDF, 72.08 kb]
Do I have to provide a written appraisal every time I enter into an agency agreement in respect of a land or business transaction?
Rule 9.5 of the Professional Conduct and Client Care Rules 2009 states "an appraisal of land or a business must be provided in writing to a client by a licensee; must realistically reflect market conditions; and must be supported by comparable information on sales of similar land in similar locations or businesses".
The Real Estate Agents Authority's view is that this rule applies to all transactions including commercial leases. If it is not possible to provide comparable information on transactions relating to similar land in similar locations, or businesses, you should include in the appraisal that no comparable information is available.
