Blog

Articles and legal news from the Atkinson Vinden Team.

Important Amendments to the Property, Stock and Business Agents Act

Property Law

The amending legislation has recently been gazetted by the New South Wales Government.

We have previously alluded to some of the mooted changes in respect to auctioning procedures and in particular the insurance and trust account requirements of licensed real estate agents / agencies.  The changes in respect to the engagement of auctioneers and more stringent trust accounting and auditing procedures are set out in the schedules to the amending Act.

Possibly of more significance is a change to section 55 of the Act.  Many agents will be aware, to their financial detriment, of the “strict liability” test applied to an agent’s claim for the payment of commission or expenses in circumstances where there is either no written agency agreement or a defective agreement has been issued or, in respect to the execution of that agreement, there has been some breach of the legislation.

The amending Act (see section 55A) provides relief to a real estate agent from his / her previous disentitlement to commission and / or expenses in those circumstances, principally where the agent / licensee fails to serve a copy of the relevant agency agreement within 48 hours after it has been signed or where the relevant agency agreement fails to comply with the requirements of the Act and regulations.

However, it is not all “beer and skittles”.  Courts / Tribunals are restricted from ordering the payment of commission / expenses unless the failure to serve copies of agreements was occasioned by inadvertence or other cause beyond the control of the licensee (hopefully this provision will be liberally interpreted) or where the failure is of a minor nature (a good example would be where the agent’s licence number has been omitted or juxtaposed).

Thankfully the Court / Tribunal may now make an order in the agent’s favour for payment of commission / expenses “in all circumstances which are fair and reasonable” and where “failure to make such an order would be unjust”.  The Court / Tribunal must be sure that “no loss has been suffered” as a result of the agent’s failure.  A good example would be where the agent has been the effective cause of the sale of a property or the leasing of premises where for that service the client / property owner would be expected to meet a commission claim.

For any further explanation / clarifications, please contact Chris McClure or any member of our Real Estate Agency Law Team at Atkinson Vinden on (02) 9411 4466.