On 1st December 2014, Queensland’s Property Agents and Motor Dealers Act (PAMDA) will be replaced by four legislative instruments. Of particular note to Real estate agents is the introduction of the Property Occupations Act 2014 (POA).
What are some key changes for Real estate agents?
The POA will bring significant changes to the way real estate agents conduct the sale of residential property from 1 December 2014. These changes include:
1. Removing the cap on commission. Agents will be able to negotiate any rate of commission with their clients, creating a more competitive marketplace.
2. Removing commission disclosure requirements to buyers. Agents will no longer need to disclose to the buyer how much commission they receive from the seller.
3. Allowing commission for beneficial interest sales. Agents may now charge commission on beneficial interest sales, where they sell to close family, friends or business associates. Commission may be charged where a client signs a Form 7, confirming their consent and understanding, and that the agent will act fairly and honestly when conducting the sale.
4. Disclosing reserve prices at residential auctions. Agents may now disclose that a residential property proposed for auction has a reserve price, but not disclose the reserve price or provide price guides. A penalty of 540 units ($61,479.00) applies for contravention.
5. Auction exemptions. The auction exemption for cooling-off periods and prescribed wording provisions is extended to cover contracts entered into by 5.00pm on the second business day after the auction, only to registered bidders at the auctions and not companies.
6. Non-residential property sales. There is no longer a need to provide a s 149 vacant land notice, or a Form 14 Information Sheet. These sales remain non-regulated.
Have the relevant forms changed?
Changes are also made to the appointment and transactional forms used by agents, with the POA now providing:
1. One form for appointment. Form 6 incorporates all types of property appointments and reappointments, replacing Forms 20a, 21a, 22a, 23 and 24a. Maximum terms of appointments for sole or exclusive agency are 90 days, and 90 day appointments may be terminated after 60 days.
2. No Form 30c Warning Statement. The warning statement is now incorporated into the sale contract. If identical words are not used, there is no right to terminate the contract although the agent will be liable for a penalty of up to $22,000.
3. No Form 32a Lawyers Certificate. The certificate for waiving or shortening the cooling off period is deleted, and a statement regarding the cooling off period incorporated into the sale contract. The buyer can waive it before or after the contract is formed by giving a simple notice to that effect, which does not need to be signed by a solicitor.
4. No Form 25 and 26. These have been deleted with no replacement provided.
5. Form 14 Information Sheets. The requirement to attach Body Corporate and Community Management Act 1997 (Qld) Form 14 Information Sheets to Contracts for the sale of residential or non-residential property will be removed, and the warning statement incorporated into the sales contract.
What are the new Licencing requirements?
New licencing requirements will apply from the 1 December 2014, and these will include changes to the following:
1. Licence categories. The POA provides that the licence of Real Estate Agent will cover those in the PAMDA licence categories of Real estate agent (Principal, Employed or Corporation), Pastoral house (Director, Corporation or Manager) and Real estate agent and Commercial agent. Licences will automatically transfer to the Act except for property developer licences and property developer director’s licences
2. Property developers and employees. Under the POA, property developers and their employees will no longer need to be licenced.
3. Displaying licences. The requirement to display a licence in a place of business and sign with the licensee name and status is removed, but must still be produced if requested. Auctioneers do not need to display their licence at auction, however must either display or announce their name.
4. Exemptions. Owners of large scale non-residential property such as shopping centres and organisations that only manage the property it owns such as parent or subsidiary companies are exempt from licence requirements.
5. Running a business. A licensee or registered salesperson are both able to run a place of business except for the registered office of the principal licensee, and employment registers are no longer required.
How are contracts entered into prior to 1 December 2014 affected?
The POA also contains transitional provisions for contracts for the sale of residential land, other than contracts formed on sale by auction.
PAMDA will continue to apply to these contracts where the contract was entered into prior to 1 December 2014, both parties have signed the contract and disclosure statements have been issued. Where this is not the case, agents will need to reissue the sales contract and documents. Miller Sockhill Lawyers located in Mooloolaba on the Sunshine Coast can assist you with any property or licencing enquiry.