Work in the real estate industry CPPDSM4080A Information Manual Queensland Contents Real Estate Terminology ..................................................................................................................................................... 3 Agency / Principal Relationship ........................................................................................................................................... 6 Roles and Positions in Real Estate Offices ......................................................................................................................... 6 Key Operations of Real Estate Offices ................................................................................................................................ 8 Forms of Business Ownership ............................................................................................................................................ 9 Sourcing and Reading Legislation..................................................................................................................................... 11 Licensing and Eligibility Requirements .............................................................................................................................. 12 Consumer Protection and Privacy Legislation................................................................................................................... 14 Trust Funds ....................................................................................................................................................................... 20 Government Agencies and Industry Bodies ...................................................................................................................... 24 Ethical and Conduct Standards ......................................................................................................................................... 28 Breach of Contract ............................................................................................................................................................ 33 Industry Employment Requirements ................................................................................................................................. 33 Employee and Employer Rights & Responsibilities ........................................................................................................... 34 Personal Presentation and Professional Image ................................................................................................................ 37 Knowledge, Skills and Training ......................................................................................................................................... 37 Copyright © - Harcourts International Ltd – v6May11 2 Real Estate Terminology Real estate terminology can become very confusing; it can differ not only between countries and states, but between different real estate agencies, and between agencies and the law. Take the time to familiarise yourself with the following terminology to help alleviate some of the confusion. Real Estate terms from A to Z Agent A person authorised to act on behalf of another person. In the case of real estate agencies, this authority must be in writing. An agent has no right to sue for, retain or recover a commission from the seller unless the appointment to act is in writing. Auction An auction property is listed without a price. On auction day buyers bid unconditionally to successfully purchase the property. Auctioneer Person holding an Auctioneer's license and able to conduct and call auctions. Business Owner A Harcourts term. See „real estate agent‟. Buyer The buyer (or purchaser) is the person who acquires title to a property or an interest in the property. Certificate of Title Certificate of Title. Each individual piece of land has a Certificate of Title, which describes the type of title, its size, the name of the owner(s) and any encumbrances. Chattels Items that sell with the home, i.e. carpets, light fittings, drapes, curtains, etc. Any different chattels, such as a glasshouse, dishwasher, etc. are noted in the contract if they are included in the sale. Client The person (usually the „seller‟) who engages an agent to represent his interests in a real estate transaction. CMA A CMA is a Comparative Market Analysis report prepared by a real estate consultant that provides information about properties currently on the market and properties that have recently sold that are comparable to the property being analysed. It is used to help determine the fair market value of the property. Commission Commission is paid by the seller to the Real Estate agency on the successful sale of the property. The commission is at the rate stated on the Listing Authority signed by the seller on appointment of the agency. Conditional A written contract that is signed by the seller and the buyer, but where one or more conditions need to be met, usually within a specified time period. For example "subject to the purchaser obtaining finance within X days". Confirmation When the conditions written into the agreement have been met, the contract is confirmed. The property is now sold and both the seller and buyer must settle. (See also Unconditional) Customer The customer (usually the „buyer‟) transacts business with an agent but does not engage that agent‟s services. Copyright © - Harcourts International Ltd – v6May11 3 Deposit An amount of money paid as evidence of good faith for the future performance of a real estate transaction. It is held in a trust account. If the purchase is complete, it will be paid towards the purchase price. Excluded Fixtures Items that are presumed to stay with the property when it is sold but have been specified on the contract as not remaining. Fixed items include items such as curtains, light fittings, built in cabinets etc. Fixtures Fixtures refers to the items affixed to the structures of land, usually in such a manner that they cannot be independently removed without damaging the property. Pool equipment such as filters and pumps are fixtures; whilst „Creepy Crawlies‟ which can be detached are not normally regarded as fixtures. Freehold or Fee Simple A freehold property has a clear title of ownership and is not subject to a lease. Landlord The owner of leased or rented properties. Leasehold Sometimes land is subject to a lease. The owner of the land leases to the tenant for a fixed rental sum for a fixed period e.g. 21, 99 or 999 years. Licensee See „real estate agent‟. Listing Authority A contract between the seller and the real estate agency marketing the property. No Price Marketing Usually called auction, tender, or for sale by negotiation. Buyers are asked to submit tenders/offers or bids based upon their perception of the properties value. Offer A signed Sale and Purchase Agreement, which includes the price, terms and conditions of sale, signed by the buyer then presented to the seller. Possession Date The date the buyer physically takes possession of the property. Principal The person who appoints the agent to work on his/her behalf and who agrees to pay the agent a commission. Normally the principal is the seller or owner, but it can be a buyer. The term „principal‟ can also be used to refer to a licensed real estate agent (who is the principal of the office). Property Manager The person who supervises the operation of a property, making sure it is properly leased, well maintained, competitive with other sites, and otherwise managed according to the owner's objectives. Purchaser See „buyer‟. Rateable Value (RV) Also known as "GV". A valuation used principally by local authorities to calculate rates. Real Estate Agent A real estate agent is a person who is lawfully authorised to act on behalf of a principal (normally the seller) to perform certain specific activities that affect the seller‟s rights and duties in relation to a third party (usually a buyer). A real estate agent may employ real estate sales consultants to perform the functions of the real estate agent including listing, inspecting, and selling. Registered Valuation A professional property valuation carried out by a registered valuer. Rent A payment made by a tenant at intervals in order to occupy a property. Copyright © - Harcourts International Ltd – v6May11 4 Requisitions The Sale and Purchase Agreement allows time for the buyer's solicitor to examine the property title. If there is a problem with the title, or if a local authority requires special works to be carried out, the buyer may ask (requisition) that the seller fix these problems, or they may have cause to cancel the contract. Reserve Price The reserve price is the minimum price (kept confidential between the seller, sales consultant and the auctioneer) the seller will accept for their property at an auction. Sales Consultant Also known as a sub-agent or agent‟s representative. Employed by a real estate agent to perform the functions of the real estate agent, such as listing, inspecting and selling. Seller A person (usually the owner) who offers a property for sale. Settlement Settlement occurs when the buyer becomes entitled to possession of the property. A formal settlement occurs when an exchange of transfer documents and the Certificate of Title with payment of the balance of the purchase monies takes place. Tenant One who pays a fee (rent) in return for the use of land, buildings, or other property owned by others. Unconditional (i) An unconditional offer is one where there are no conditions to be fulfilled. (ii) When conditions written into a contract have been met, the contract becomes unconditional. The property is now sold and both the seller and buyer must settle. Vendor See „seller‟. Real Estate Terminology Terminology with regard to the Law Terminology in your world of Real Estate Agent / Licensee Business Owner Agent / Agent‟s Representative / Sales Consultant Real Estate Sales Representative Agency Real Estate Office Vendor / Principal / Client Seller / Client Purchaser Buyer / Customer Landlord Property Owner Tenant Occupant Copyright © - Harcourts International Ltd – v6May11 5 Agency / Principal Relationship The role of a sales consultant is created when a principal (client) appoints a sales consultant to act on his/her behalf. The sales consultant‟s role is to find a buyer or tenant (customer) who enters into a valid and enforceable contract to buy or rent property from the principal; i.e. the property owner. The sales consultant‟s duty is to find a customer who is willing and able to agree to the principal‟s terms in the contract. Although in most cases the principal is the property owner, a buyer or tenant may also engage the services of a sales consultant, in which case they become the principal. A sales consultant is required by law to do the following: follow the instructions of his/her principal inform the principal of all relevant information act in good faith at all times, with the principal‟s interest being upmost keep the necessary financial records – particularly the „trust account‟ which holds all principals‟ monies entrusted to sales consultants during the course of transactions Instructions to act as a sales consultant must be in written form. This is known as a „form of appointment ‟ and includes details on the sales consultant‟s entitlement to commission (Form 22a). The relationship between a principal and sales consultant is created when the seller of a property signs a „form of appointment‟. The sales consultant is then appointed. Agency appointments are automatically terminated when the purpose of the appointment has been fulfilled; e.g. the property has sold or the agency time period expires after the specified time has elapsed. Both parties (i.e. the principal and the sales consultant may agree to terminate the appointment before the time period expires. The principal may end an agency contract by revoking the agreement in writing. Provision for this termination is usually in the agency agreement. The sales consultant has a similar right to terminate. The sales consultant does not have a legal relationship with other parties, other than the principal, involved in a transaction. Common law does however impose a duty of care with respect to third parties; to provide them with accurate information. Statements made by sales consultants must be truthful and accurate in all circumstances. Where asked a question in relation to a property they are offering for sale or rental, sales consultants have a clear duty to seek out the information required by the other party. Roles and Positions in Real Estate Offices There is a wide range of occupations available within the real estate industry depending on the location and the type of real estate product in an area, albeit not always within the one office. Some of these include: Licensed Real Estate Agent A licensed real estate agent is any person who is licensed to own, operate or manage a real estate business. The licensee may also be known as the officer in effective control or agent. The agent must be licensed under the Property Agents and Motor Dealers Act 2000 through the Office of Fair Trading, State Development Centres or SmartLicence. In most offices the main function of a real estate Business Owner/Licensee is to administer the day to day affairs of the office; however some Business Owners employ Managers to do this. Legally, the business owner is the person who, as an agent for his/her principal, undertakes or carries on the business of selling, exchanging or letting of houses, land or businesses of any kind. As such, the Business Owner accepts responsibility for the operation of his/her entire office and staff, in accordance with the provisions of the Property Agents and Motor Dealers Act 2000 and Property Agents and Motor Dealers Regulations 2001. Copyright © - Harcourts International Ltd – v6May11 6 Property Agents and Motor Dealers Act 2000 http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PropAgMoDA00.pdf Property Agents and Motor Dealers Regulation 2001 http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PropAgMotDR01.pdf Property Agents and Motor Dealers (Auctioneering Practice Code of Conduct) Regulation 2001 http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PropAgMoDAPR01.pdf Property Agents and Motor Dealers (Commercial Agency Practice Code of Conduct) Regulation 2001 http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PropAgMoDCAPR01.pdf Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PropAgMoDREAR01.pdf Branch Managers A Real Estate office which has another office in a separate location is required to employ a branch manager to be in control of that office. A Branch Manager's function falls between that of a Sales Manager and a Business Owner. Essentially, the branch manager performs the functions of both people. An important element of supervision specified in the Property Agents and Motor Dealers Act is that the person responsible for the day-to-day operational management of the business must also be a licensed real estate agent. A branch manager requires the same licensing requirements as a Licensed Real Estate Agent. The branch manager is responsible to the Office of Fair Trading Queensland for the correct functioning of that branch office. The administrative functions may be carried out by the „main‟ office. Real Estate Sales Consultant A Real Estate Sales Consultant is a person who is registered under requirements of the Property Agents and Motor Dealers Act and employed by a licensee to carry out any of the functions of a real estate sales consultant. The following list details the functions which can only be performed by a real estate licensee or registered sales consultant under the Act: the acquisition of properties for sale (obtaining new listings); providing market appraisals (an estimate of the expected sales price); conducting marketing activities such as writing advertisements, designing and distributing brochures or conducting open homes; inspecting properties for sale or rent with potential buyers or tenants; and negotiating any aspect of a sale or leasing transaction. Applicants seeking registration as a real estate sales consultant must: be at least 18 years old be a person of suitably good character to hold a certificate of registration; and have a full understanding of the duties and obligations of a real estate sales registration certificate holder as imposed by the Act. Property Manager A property manager is responsible to the Business Owner / Manager and to the landlords for the effective management and control of properties managed by the office. The appointment of a property manager has to be in writing stating the duties to be performed and fees which may be recovered for performing a service. The property management role includes: Copyright © - Harcourts International Ltd – v6May11 7 obtaining new rental properties and building the `rent roll' ; appraising rental properties and advising on achievable rental prices; finding and selecting suitable tenants; collecting and monitoring rental payments; regularly inspecting properties and reporting on their condition; arranging and supervising payment and necessary repairs; marketing activities as per sales consultant; accounting to landlords for rental monies paid; and the procedures associated with remedying breaches to tenancy agreements and the termination of tenancies. A property manager also requires a certificate of registration just as sales consultants do. Administrative Support The types and number of people involved in corporate administrative support within a real estate office will depend on the size and operation. The functions to be carried out will vary accordingly, as will the qualifications of the personnel involved. Types of activity include reception, clerical, accounting, secretarial, research, human resources and a variety of other support activities. In a smaller office all of these functions may be performed by one person. As real estate offices grow in size, additional support staff will be employed and roles will become more focused and specialise in specific areas. A receptionist is often the first line of contact between the public and the office. A receptionist needs to understand the aspects of sales and property management to be able to answer questions and refer enquiries appropriately. Specialist Sales Consultants A real estate office may employ specialist sales consultants to handle a particular area of practice, depending on the focus of the office and the area in which it is operating. Specialised real estate activity may include commercial or industrial sales and leasing, strata home unit or land project marketing, investment sales or business sales. Sales Manager The Sales Manager of a real estate office accepts responsibility for the motivation, training and leadership of the sales team to ensure maximum profitability and efficiency in the day to day operation of the real estate sales team. Auctioneer Auctioneers conduct sales at which bids are made and property is sold to the person offering the highest price at or beyond the reserve price. Under the Property Agents and Motor Dealers Act, all auctioneers in Queensland must be licensed, while trainee auctioneers require a certificate of registration. Key Operations of Real Estate Offices The key operations of a real estate office are: sales, which involves listing, advertising and marketing a property or a business, negotiating the sale and arranging the signing of a contract between the seller and the buyer. property management, which includes selecting tenants, leasing property, collecting rent, and the overall maintenance and management of properties on behalf of landlords. Copyright © - Harcourts International Ltd – v6May11 8 Services offered by real estate offices include: marketing, sale and leasing of a range of property types – including residential, rural, commercial and industrial real estate. property management across a range of property types – including collecting rent, paying rates and insurance, repairs and maintenance, and providing a financial statement of money paid and collected each financial year. business broking – selling business (not necessarily including the property at which the business operates) on behalf of sellers. Whilst traditionally real estate offices have provided a range of key operations within their businesses, many of these areas of real estate practice have become specialised areas of practice. Additionally, other areas of specialisation, such as investment consulting and project marketing are appearing. By developing specialised skills in specific areas of real estate, a more sophisticated service is available to clients, building a stronger and larger client base. Sales consultants can operate across a broad range of property types. Specialisation in different areas within the real estate industry has increased as legislation which controls each of these specialities has become more sophisticated, and the demand from consumers for information and service in these areas has risen. Forms of Business Ownership There are three ways in which a business may be owned and operated by a licensed real estate agent: Company Partnership Sole Trader Company The Property Agents and Motor Dealers Act refers to a company as a corporation; a legal entity quite distinct from the members who form the company. Because a company is a separate entity, it follows that it can do many of the things which an ordinary individual can do at law. It can: make contracts which are binding; sue someone; be sued by someone; own and dispose of property; and sign legal documents by using a company seal A company can own property in its own right and it can sue or be sued. Corporations law includes the principle of limited liability to enable shareholders in a company to risk no more than their actual investment. The effect of this is that the members of the company (the shareholders) do not have any liability for debts of the company apart from the cost of the shares. The company has what is known as limited liability. This can be contrasted with partnerships or sole traders which have unlimited liability, meaning that they must meet the full amount of any deficit from their private resources or face bankruptcy. A company is only eligible to obtain a real estate agent‟s licence if a director of the company is a real estate agent as specified in Chapter 2, Part 5, Division 2 of the Act. Property Agents and Motor Dealers Act 2000 http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PropAgMoDA00.pdf Copyright © - Harcourts International Ltd – v6May11 9 Partnership A Partnership is defined as the relationship which exists between two or more persons who join together to own and operate a real estate office. Although 20 is a maximum number of people who may join together in a partnership, real estate partnerships usually have between two and seven members. In Queensland, all partners in a real estate business must be licensed estate agents. The Partnership Act 1891 (Q) sets out the rights and obligations of partners in respect to partnership operations. A partnership is not, at law, a separate legal entity. All partners are jointly liable for the debts of the partnership business to the extent of their personal assets, meaning they have unlimited liability. The general rule for liability applying to partnerships is that all partners are both jointly and independently liable for the debts and obligations incurred by any member of the partnership acting in a normal business capacity. This means that should a creditor bring an action against the partners, if the assets of the firm are insufficient to pay the creditor, then each partner will have to contribute from his or her personal funds or assets. This arrangement is known as joint unlimited liability. The property of a partnership (e.g. business premises, furniture, etc) is owned jointly by the partners. Partnership Act 1891 (Q) http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PartnerA1891.pdf Sole Trader An individual proprietorship is the oldest and simplest form of business organisation. A person who owns their own business is known as a sole trader or proprietor. Anyone capable of contracting can operate a business as a sole proprietor, subject to any legal requirements laid down for a specific type of business; e.g. licensing. The essential characteristic of a sole trading business is that it has no separate legal entity from that of its owner. If the business fails, the sole trader‟s private assets may be liquidated to pay the debts of the business. Organisational Structure Having established an appropriate form of ownership of the business (company, partnership, or sole trader), a real estate office must then decide whether it is going to operate independently or whether it is going to collaborate in some way with other real estate agencies. There are three ways in which an agency may establish its operation: Franchise Group Under a real estate franchise arrangement a number of real estate agencies, called franchisees enter into an arrangement with a franchisor to carry on the business under the franchisor's name. This right to use the name is usually given exclusively for a set territorial area. In return the franchisor receives a share of the franchisee's business income. The franchisee may also be required to contribute towards marketing and advertising the franchise group by paying a separate levy. Franchisors provide services to their franchisees including training, business systems and advice, auctioneers, marketing systems, documentation systems, and a corporate image. The franchisor, therefore, is selling a name, an image and a way of doing business to a franchisee for the purpose of making a profit. The rights and obligations of the relationship are defined by a written contract between the two parties known as a franchise agreement, which gives each franchisee exclusive use of the franchise name within a specified area. Copyright © - Harcourts International Ltd – v6May11 10 Independent Agency The real estate office operates totally independently and has no permanent formal ties with other agencies. The estate agency may form links or marketing arrangements with other agents in regard to specific properties, but its overall operation is not linked with any other agency or organisation. Marketing Cooperative In contrast to the franchise groups, a marketing cooperative is a non-profit group of independent real estate agencies who join together to benefit from common advertising, marketing practices, common name, and economies of scale in the purchase of goods and services. A marketing cooperative operates along similar lines to an industry association, with member agencies paying an annual membership fee consisting of a fixed amount rather than a percentage of turnover or sales commissions. The group is administered by a committee consisting of members elected at an annual general meeting. The prime function of the committee is to direct expenditure on behalf of the group. While members are required to comply with the group's advertising guidelines and membership rules for daily operations, each business is independently owned and operated with greater potential for the development of individual practices than is the case with a franchise group. Member agencies pay a fixed annual fee rather than a percentage of turnover or sales commission. Sourcing and Reading Legislation All real estate sales consultants and staff have an ethical responsibility to have a working knowledge of: real estate legislation and any regulations under such legislation; and, other statutes and any rules or regulations in force such as Competition and Consumer legislation to the extent that they are relevant to the conduct of the real estate profession. Every piece of legislation has a formal structure, divided into a number of elements. In very long Acts the text is divided into chapters. More commonly, there is a number of Parts to an Act, each dealing with a different component of its subject matter. A number of Acts include a list of definitions that are included in the introduction. A Part may be divided into divisions. It is also possible to have subdivisions in Acts. Divisions are usually divided into numbered sections or clauses, which are the most commonly referred to element of an Act. Shorter Acts just contain sections without the need for separate Parts. Sections are numbered consecutively and each has a title. Information and details, in both electronic and hard copy format, of legislation relevant to the real estate sector in Queensland may be sourced from: www.austlii.edu.au Australian Legal Information Institute www.reia.com.au Real Estate Institute of Australia www.reiq.com.au Real Estate Institute of Queensland www.fairtrading.qld.gov.au/oft/oftweb.nsf/AllDocs/RWP0EFBEBC1F70816444A256F10001AE6A5?OpenDo cument&L1=About+Us Fair Trading Legislation – Office of Fair Trading - Department of Justice and Attorney-General Queensland Copyright © - Harcourts International Ltd – v6May11 11 Licensing and Eligibility Requirements Chapter 2 of the Property Agents and Motor Dealers Act 2000 deals with licensing and registration within the real estate industry in Queensland. A person operating as a sales consultant or property manager in Queensland is required by law to be registered with the Office of Fair Trading (Queensland). A sales consultant must work under the supervision of a licensed real estate agent. Under the Property Agents and Motor Dealers Act 2000, all real estate sales consultants must hold a registration certificate to work as an employee of a licensed real estate agent in Queensland. Employees who hold full real estate licences do not require registration certificates or employment authorities but must be listed on the licensee's employment register. Sales consultants who are registered are given employment authorities which authorise them to perform specified functions for the licensee and are listed on the licensee's employment register. Only these sales consultants, rather than all employees of a real estate office, need to be registered. There is no set format for employment authorities as each may vary depending on the sales consultant‟s abilities and the employer's choice to allow or restrict certain activities. The employment register must set out names of all registered sales consultants and property managers, employment commencement and termination dates and details of each person's employment authority (including any variations as they occur). Under the Property Agents and Motor Dealer Regulation 2001, an applicant for a real estate sales consultant registration certificate must have successfully completed, or been assessed as competent in, the following units of Property Services Training Package - CPP07: CPPDSM4008A (Identify legal and ethical requirements of property sales to complete agency work) CPPDSM4009A (Interpret legislation to complete agency work) CPPDSM4010A (Lease property) CPPDSM4012A (List property for sale) CPPDSM4015A (Minimise agency and consumer risk) CPPDSM4022A (Sell and finalise the sale of property by private treaty) CPPDSM4080A (Work in the real estate industry) As qualifications change from time to time it is important to keep up with the changes. An equivalent interstate certificate/licence can not be used legally in Queensland unless an application is made for the equivalent certificate/licence in Queensland as an individual. The appropriate mutual recognition form for a registration certificate must be complete and lodged with the Office of Fair Trading. Under current legislation the Chief Executive of the Department of Tourism, Fair Trading and Wine Industry Development is required to determine whether an applicant for a real estate certificate of registration or licence is an appropriate person to hold a licence or registration, when an application is lodged with the Office of Fair Trading. In order to make this determination it is necessary for the applicant to undergo a criminal history check. The criminal history check applies for each individual, executive officer and company directory whose name, date and place of birth appear on the application. To be eligible to be registered as a sales consultant or property manager you must: be an individual be at least 18 years old have the educational or other qualifications as prescribed under the regulation or a comparable qualification not, within the preceding five years, have been convicted in Queensland or elsewhere of a serious offence not be currently disqualified from holding a licence or registration certificate be deemed suitable to hold a registration by the chief executive Copyright © - Harcourts International Ltd – v6May11 12 In determining suitability, the chief executive must consider the following: your character whether you have held a licence or registration under the Property Agents and Motor Dealers Act that has been suspended or cancelled whether an amount has been paid from the Claim fund because you did, or omitted to do, something that gave rise to a claim against the fund whether you have been disqualified under the Property Agents and Motor Dealers Act whether, within the previous five years, the tribunal or the District Court has made an order under the Property Agents and Motor Dealers Act because of your involvement as a marketeer of residential property your criminal history if you are affected by bankruptcy action whether you have been convicted of an offence against the Property Agents and Motor Dealers Act whether you are capable of satisfactorily performing the activities of a sales consultant whether your name appears in the register of disqualified company directors and other offices If a licensee wishes to operate a real estate office under a company structure, then that company must hold a separate real estate agent‟s licence because a company is a separate legal entity from the people who own and operate it. A corporation is not eligible to be granted an estate agent's licence, or to hold or to continue to hold an estate agent's licence, unless the corporation has a licensed estate agent acting as the officer in effective control of its estate agency business. A corporation is not eligible to be granted an estate agent's licence if any of its directors would be ineligible to be granted an estate agent's licence as an individual. Under the Property Agents and Motor Dealer Regulation 2001, an applicant for a real estate agent's licence must have successfully completed, or been assessed as competent in, the following units of Property Services Training Package (the CPP07 Package): CPPDSM4003A (Appraise property) CPPDSM4005A (Establish and build client-agency relationships) CPPDSM4006A (Establish and manage agency trust accounts) CPPDSM4007A (Identify legal and ethical requirements of property management to complete agency work) CPPDSM4008A (Identify legal and ethical requirements of property sales to complete agency work) CPPDSM4009A (Interpret legislation to complete agency work) CPPDSM4010A (Lease property) CPPDSM4011A (List property for lease) CPPDSM4012A (List property for sale) CPPDSM4013A (Market property for lease) CPPDSM4014A (Market property for sale) CPPDSM4015A (Minimise agency and consumer risk) CPPDSM4016A (Monitor and manage lease or tenancy agreement) CPPDSM4018A (Prepare and present property reports) CPPDSM4019A (Prepare for auction and complete sale) CPPDSM4022A (Sell and finalise the sale of property by private treaty) CPPDSM4046A (Manage tenancy disputes) CPPDSM4080A (Work in the real estate industry) BSBSBM406A (Manage finances) To be eligible to obtain a real estate licence you must: be at least 18 years old have the educational or other qualifications as prescribed under the regulation or a comparable qualification not be affected by bankruptcy action not, within the preceding five years, have been convicted in Queensland or elsewhere of a serious offence not be currently disqualified from holding a licence or registration certificate be deemed suitable to hold a licence by the chief executive Copyright © - Harcourts International Ltd – v6May11 13 In determining suitability, the chief executive must consider the following: your character the character of your associates whether you have held a licence under the Property Agents and Motor Dealers Act that has been suspended or cancelled whether an amount has been paid from the Claim fund because you did, or omitted to do, something that gave rise to a claim against the fund whether you have been disqualified under the Property Agents and Motor Dealers Act whether, within the previous five years, the tribunal or the District Court has made an order under the Property Agents and Motor Dealers Act because of your involvement as a marketeer of residential property your criminal history whether you are affected by bankruptcy action whether you have been convicted of an offence against the Property Agents and Motor Dealers Act whether you are capable of satisfactorily performing the activities of a sales consultant whether your name appears in the register of disqualified company directors and other offices For a corporation, the following considerations must also be made by the chief executive: whether the corporation has been placed in receivership or liquidation whether an executive officer of the corporation has been affected by bankruptcy action whether an executive officer of the corporation has been convicted of an offence against the Property Agents and Motor Dealers Act whether each executive officer of the corporation is a suitable person to hold a licence All licence and registration applicants must undergo a criminal history check when lodging a new application or renewal with the Office of Fair Trading. Consumer Protection and Privacy Legislation The national consumer protection act known as the Competition and Consumer Act 2010 is designed to foster a competitive market for consumers and those which cover unfair practices. The aim is to protect business proprietors and consumers against malpractice and unfair business conduct. Schedule 2, Chapter 2, Part 2-1, Section 18(1) of the Competition and Consumer Act states: „A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.‟ Schedule 2, Chapter 3, Part 3-1, Section 30(1) of the Competition and Consumer Act states: „A person must not, in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of an interest in land or in connection with the promotion by any means of the sale or grant of an interest in land: (a) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or (b) make a false or misleading representation concerning the nature of the interest in the land; or (c) make a false or misleading representation concerning the price payable for the land; or (d) make a false or misleading representation concerning the location of the land; or (e) make a false or misleading representation concerning the characteristics of the land; or (f) make a false or misleading representation concerning the use to which the land is capable of being put or may lawfully be put; or (g) make a false or misleading representation concerning the existence or availability of facilities associated with the land.‟ Schedule 2, Chapter 3, Part 3-1, Section 50(1) of the Competition and Consumer Act states: „A person must not use physical force, or undue harassment or coercion, in connection with: (a) the supply or possible supply of goods or services; or Copyright © - Harcourts International Ltd – v6May11 14 (b) (c) (d) the payment for goods or services; or the sale or grant, or the possible sale or grant, of an interest in land; or the payment for an interest in land.‟ Schedule 2, Chapter 3, Part 3-1, Section 32(1) of the Competition and Consumer Act states: „A person must not, in trade or commerce, offer any rebate, gift, prize or other free item with the intention of not providing it, or of not providing it as offered, in connection with: (a) the supply or possible supply of goods or services; or (b) the promotion by any means of the supply or use of goods or services; or (c) the sale or grant, or the possible sale or grant, of an interest in land; or (d) the promotion by any means of the sale or grant of an interest in land.‟ Schedule 2, Chapter 3, Part 3-1, Section 34 of the Competition and Consumer Act states: „A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any services.‟ Schedule 2, Chapter 3, Part 3-1, Section 49 of the Competition and Consumer Act states: „A person must not, in trade or commerce, induce a consumer to acquire goods or services by representing that the consumer will, after the contract for the acquisition of the goods or services is made, receive a rebate, commission or other benefit in return for: (a) giving the person the names of prospective customers; or (b) otherwise assisting the person to supply goods or services to other consumers; if receipt of the rebate, commission or other benefit is contingent on an event occurring after that contract is made.‟ Competition and Consumer Act in summary… Persons involved in trade or commerce shall not engage in misleading or deceptive conduct either expressed by silence, or doing of an act. Seller is liable if: was aware of facts and gave false information to the sales consultant who passed the information onto the buyer Otherwise the sales consultant is liable. So… Do not lead people by: making untrue statements making predictions you cannot substantiate creating unrealistic appraisals remaining silent when you have a duty to disclose acting unconscionably (harassment, pressure, taking advantage) Do not make or advertise misleading statements about: use of land characteristics of land location of land Copyright © - Harcourts International Ltd – v6May11 15 Legislative documents regarding consumer protection are available at: www.fairtrading.qld.gov.au/oft/oftweb.nsf/AllDocs/RWP0EFBEBC1F70816444A256F10001AE6A5?OpenDocument&L1= About+Us General Law in summary… Keeping out of Trouble use due care and diligence if seller‟s property sells below reasonable market value, the sales consultant can be held liable (not for slight differences in value sales consultant‟s are not required to have valuer‟s training but must take care in making statements in appraisals – take care advice and information is correct should always suggest further specialist advice be obtained DANGER – land area size, boundary peg locations, full-sized tennis court, flooding INNOCENT MISREPRESENTATION – liable if: information volunteered by sales consultant guessing without knowing – don‟t do it! misleading description given by sales consultant opinion is proved unfounded Obtain all relevant facts Seek clarification from seller or his/her solicitor Dispel any doubt Copyright © - Harcourts International Ltd – v6May11 16 REMEMBER… Your first obligation is to your client (paying your commission) who is the seller in a sale or a landlord in property management, BUT you also have a legal obligation to the customer (buyer or tenant). In other words, if a seller tells you his property is infested with termites, you have a legal obligation to tell the buyer, but if a seller tells you to advertise his property for $500 000 but would be happy to take $450 000, you must not tell the buyer. If in doubt, ask your manager. Misrepresentation in a nutshell… You can be fined for misrepresentation if you provide information that is incorrect, so never say, “This is the boundary peg.” Always say, “The seller tells me that this is the boundary peg but I recommend your solicitor does the relevant searches prior to purchase.” You can be fined for misrepresentation if you don‟t volunteer information that you should; e.g. It is common knowledge that the area floods, but you didn‟t know it. It is your job to know these things and to inform your buyers. Do the relevant research on properties you are marketing. Another example is if a huge shopping centre or main road is going through and you don‟t know and/or don‟t tell the buyer. You can be fined for misrepresentation by providing information that is misleading. Do not offer opinions that could prove to be incorrect, e.g. “The sport‟s club next door doesn‟t have evening functions”, or “The foliage between the club and the house block the noise so that you won‟t hear anything.” You can be fined for misrepresentation if you mislead through exaggeration, e.g. “There is masses of room in here for both your boat and your car.” You can be fined for misrepresentation if you mislead through unfounded opinion, e.g. “This‟ll be the next suburb to take off in values. Mark my word.” All real estate employers and employees are subject to and need to act in accordance with the Privacy Act 1988 and the Privacy amendment Act 2000 along with the recent Do Not Call Register Act 2006. The Do Not Call Register was set up in response to increasing levels of community concern about the growth in unsolicited telemarketing calls. The register is intended to regulate and minimise the number of unsolicited calls made to Australian numbers regardless of whether they originate from overseas or within Australia. The Do Not Call Register Act 2006, makes it illegal, in the absence of consent, for any non-exempt telemarketer in Australia or overseas to contact a number listed on the register. Do Not Call Register Act 2006 http://www.austlii.edu.au/au/legis/cth/num_act/dncra2006201.txt/cgibin/download.cgi/download/au/legis/cth/num_act/dncra2006201.rtf The Privacy Act 1988 protects personal information. Generally, the federal Privacy Act covers the collection, use and disclosure, quality and security of personal information. The federal Privacy Act also gives rights to access and correct personal information. People have the right to make a complaint if they think their personal information has been mishandled. The ten National Privacy Principles (NPPs) in the federal Privacy Act protect personal information and give rights in the way private sector organisations handle information. These are required to be observed by sales consultants and property managers in particular. These principles collectively require real estate offices and personnel to take reasonable steps in data collection and systems to identify sensitive or personal information collected in the normal course of duties in selling and managing property. The NPPs deal with the following areas: Copyright © - Harcourts International Ltd – v6May11 17 NPP1 - Collection of Information Agencies are prohibited from collecting personal information unless it is necessary for one or more of its functions. Personal data should only be collected in a lawful, fair, and not unreasonably obtrusive way. The agency must disclose certain information at the point of collection. Personal information is „information of an opinion, including information of an opinion forming part of a database, whether true or not and whether recorded in material form or not about an individual whose identity is clear or can reasonably identified from the information or an opinion‟. Personal and sometimes sensitive information may be collected and stored on standard real estate industry forms, such as tenancy applications, listing forms, etc. These need to be secured and available for inspection by customers. NPP2 - Use and disclosure of information The agency should only use or disclose personal information about an individual for the purpose it was collected with the exception of where consent has been provided by that person, or the secondary purpose is related to the primary purpose and a person would reasonably expect such use or disclosure or the use is for a direct marketing in specified circumstances, or in circumstances related to public interest such as law enforcement and public or individual health and safety. Simply put, any organisation is precluded from using or disclosing personal information for any reason other than the purpose for which the information was collected or as authorised by the individual. Agencies must collect personal information directly from the individual if it is reasonable and practicable, only if it is necessary, and inform the clients and customers why information is being collected in a fair and reasonable manner. It is recommended that real estate offices only use personal information: for the „primary purpose‟ in the way that an individual would expect it to be used if informed client consent has been obtained where the real estate office engages in „direct marketing‟ using personal information if informed client consent has been obtained where third parties will receive an individual‟s personal information where information is depersonalised if appropriate where „direct marketing‟ practices are reviewed and allow for an „out‟ This NPP is considered to have the most substantial impact upon change to real estate practices. NPP3 - Data Quality The agency must take reasonable steps to make sure that the personal information collected, used, or disclosed is accurate, complete and up-to-date. After a reasonable time has lapsed, reasonable steps should be taken to check the accuracy of information. Not determining inaccurate or incomplete information may have a detrimental effect on clients. Appropriate systems to replace and update information should be in place. NPP4 - Data security Reasonable steps must be taken by an agency to protect information it holds from misuse, loss, and unauthorised access, modification or disclosure. Reasonable steps to implement network and security measures, and to destroy or permanently obliterate personal information must be taken when information is no longer needed for any purpose for which the information may be used or disclosed. It is important to have a security policy for both staff and clients to review and to maintain information security when „contracting out‟ activities or functions. Copyright © - Harcourts International Ltd – v6May11 18 NPP5 - Openness An agency must have a policy document outlining its information handling practices and make this available to anyone who asks for it. On request by a person, an agency must take reasonable steps to let the person know, generally, what sort of personal information it holds, for what purpose, and how it collects, holds, uses and discloses that information. It is recommended that an agency: provides a brief document explaining the agency privacy policy highlights the agency‟s privacy policies to clients and customers NPP6 - Access and correction If a real estate office holds personal information about an individual, it must provide the individual with access to the information on request by the individual except to the extent that it would pose a serious and imminent threat to the life or health of an individual or prejudice an investigation of possibly lawful activity. NPP7 - Identifiers Generally speaking, a real estate office must not adopt, use or disclose, an identifier that has been assigned by a Commonwealth government agency. NPP8 - Anonymity Where it is lawful and practicable to do so, individuals must have the option of not identifying themselves when generally entering transactions with an organisation. The idea is that organisations must give people the options to operate anonymously unless there are good practical or legal reasons that require identification. This principle is impractical in a real estate transaction, as the individual with whom the real estate office is dealing with must be established. NPP9 - Transborder data flows A real estate office may transfer personal information to a recipient in a foreign country in circumstances where the information will have the appropriate protection. This may be relevant if a landlord/seller resides overseas where personal privacy is not observed under a statute. Real estate offices must make reasonable enquiries before sending personal information overseas. NPP10 - Sensitive Information A real estate office must not collect sensitive information about an individual unless the individual has consented and is required by law or in other specific circumstances. Sensitive information or opinion about an individual may include such things as racial or ethnical origin, political opinion, religious beliefs or affiliations, sexual preference, practices or criminal record, personal information or health information about a person. Any personal information you obtain and keep about others must be handled with care, sensitivity and in accordance with legal requirements. These provisions put in place legal requirements governing the collection, use, storage, correction, disclosure and handling of private and sensitive information. Ten National Privacy Principles http://www.privacy.gov.au/publications/npps01.html Copyright © - Harcourts International Ltd – v6May11 19 In summary, compliance with the Privacy Act means that real estate offices must: tell people what the office expects to do with information when collecting personal information only collect personal information that is necessary for one or more real estate functions or activities – additional personal information must not be collected use personal information only for the reason for which it was collected, or in ways that would be thought reasonable, unless consent is given for other uses only pass on personal information for the reason for which it was collected, or in ways that would be thought reasonable, unless consent is given or disclosure is authorised by another law allow people to see any information that is held about them if access is requested keep personal information secure so that it is not readily accessible, accurate and up-to-date To ensure compliance with the Act, each real estate office should: train all staff in privacy requirements develop appropriate policies implement access and complaints handling procedures Licensees and sales consultants must also display a privacy notice at all open for inspections and include a privacy statement on all information collected from potential clients and customers. Trust Funds Real estate licensees hold large amounts of money on behalf of clients. Trust money is money that is received or held by a licensee or any member of a licensee‟s staff on behalf of another person in relation to a real estate sales transaction or property management transaction. Deposits on sales, tenancy bonds, rent and pre-paid advertising are all trust money. It is strongly recommended that if a licensee has any doubts about how to treat any money, they should act on the side of caution and treat it as trust money. Where money is received in the course of other business conducted by a real estate office, such as agencies for insurance companies, banks or building societies, this is not money received in the course of a real estate transaction and therefore is not trust money under the Property Agents and Motor Dealers Act. Trust money must be kept separate from the licensee‟s general business money at all times. It is essential to remember that the trust account money belongs to other people. Removing money from the trust account for a reason other than one that is lawful and appropriate is a very serious matter. A licensee must appoint an auditor before receiving or holding any trust money. A new auditor must be appointed within one month where an auditor resigns, dies or otherwise becomes unable to perform his/her duties. All trust money must be deposited in a trust account in the name of the licensee by close of business on the next business day after being received. Before opening a trust account a licensee must notify the Office of Fair Trading in writing, using a PAMD (Property Agents and Motor Dealers) 18 form – Notice of Intention to Open a Trust Account , of their intention to do so. A letter of acknowledgement for the licensee to present to the financial institution will not be issued until the PAMD (Property Agents and Motor Dealers) licence has been granted and any business name has been registered to the licensed entity applying to open a trust account. Copyright © - Harcourts International Ltd – v6May11 20 Property Agents and Motor Dealers Regulation 2001 41 Trust account receipt forms (1) A trust account receipt form must be headed 'Property Agents and Motor Dealers Act 2000 Trust Account Receipt'. (1A) Each trust account receipt form must be consecutively and uniquely numbered for each licence. (2) A completed trust account receipt form must contain the following particulars-(a) the name of the principal licensee on whose behalf the receipt was completed; (b) the date the receipt was completed; (c) the name of the person for whom the receipt was completed; (d) details of the transaction, including a way by which the name of the person on whose behalf the payment is received can be found out; Example of a way by which the name of a person can be found out-using a code to identify the person, for example, S4 stands for N. Smith (e) a brief description of the matter for which the trust money was received, including for trust money received that is rent-(i) the address of the rented premises; and (ii) the day up to which the rent is paid; (f) the amount of trust money received, in figures; (g) how the trust money was received, for example, in cash, by cheque or by electronic funds transfer; (h) the signature of the person who completed the receipt. (3) If a payment from a prospective buyer is for an option to purchase a used motor vehicle for sale on consignment, the completed trust account receipt form must contain, in addition to the particulars mentioned in subsection (2), the following particulars-(a) the vehicle's make; (b) the vehicle's body model; (c) the vehicle's colour; (d) the vehicle's engine number or, if the vehicle is a caravan, the vehicle's chassis number; (e) the vehicle's identification number; (f) the vehicle's registration number; (g) the vehicle's year of manufacture. (4) Each trust account receipt form must include provision for the particulars mentioned in subsections (2) and (3). (5) A duplicate trust account receipt form must also be headed 'Office Copy' or 'Duplicate Copy'. Copyright © - Harcourts International Ltd – v6May11 21 42 Dealing with trust account receipt forms (1) A principal licensee must complete a trust account receipt form-(a) if a principal licensee receives trust money by way of direct deposit or electronic funds transfer--on the day the principal licensee becomes aware of the receipt of the trust money; or (b) if a principal licensee receives trust money other than by way of direct deposit or electronic funds transfer--immediately the principal licensee receives the trust money. Maximum penalty--10 penalty units. (2) The principal licensee must ensure-(a) a trust account receipt form-(i) is used only for the receipt of trust money; and (ii) includes the relevant particulars mentioned in section 41; and (iii) if requested by the person from whom the trust money was received, is given to the person promptly; and (b) a legible copy of each trust account receipt form completed by the principal licensee is kept in the principal licensee's records; and (c) if the principal licensee cancels a trust account receipt form, the form is kept in the principal licensee's records. Maximum penalty--10 penalty units. 52 Keeping computer system records (1) This section applies if a principal licensee keeps any books, accounts or records mentioned in section 38 by a computerised accounting system. (2) The principal licensee must ensure that-(a) the computer system does not allow the deletion of a trust ledger account unless-(i) the account has a zero balance; and (ii) a record of the account, as it was immediately before its deletion, is kept in a visible form; and (b) an amendment of the particulars of a transaction recorded on the computer system is made by a separate transaction recorded on the system; and (c) a record of information produced by the computer in a visible form is produced in chronological sequence. Maximum penalty--10 penalty units. (3) The computer system must be capable of keeping a record in chronological sequence of any change (by creation, amendment or deletion) to the following information stored in the computer-(a) the name and address of a person for whom trust money is held; (b) the description of a matter being conducted by the principal licensee; Copyright © - Harcourts International Ltd – v6May11 22 (c) the amount of trust money held for a person by the principal licensee; (d) the financial institution account number of a trust account. (4) The principal licensee must, as soon as practicable after the end of each month, make a print-out of the following-(a) if a trust ledger account is kept by a computerised accounting system--the balance of the ledger account; (b) if a reconciliation under section 47(1)(a) is kept by a computerised accounting system--the reconciliation; (c) if a trust account financial institution statement balance is reconciled with the trust account cash book balance by a computerised accounting system--the reconciliation of the financial institution statement. Maximum penalty--10 penalty units. (5) If a trust account ledger is kept by a computerised accounting system, a principal licensee must immediately before a trust ledger account or investment ledger account is deleted from the computer system-(a) make a print-out of the ledger account; and (b) keep the print-out in the principal licensee's records. Maximum penalty--10 penalty units. Entitlement to draw commission and expenses from a trust account in respect of the sale of property only occurs once a transaction is finalised. Property Agents and Motor Dealers Act 2000 385 Permitted drawings from trust accounts (2) The licensee is authorised-(a) to draw an amount from the transaction fund to pay a transaction expense when the expense becomes payable; and (b) when the transaction is finalised, to draw an amount from the transaction fund that is equal to the difference between-(i) the balance of the transaction fund; and (ii) the total of the licensee's transaction fee and any outstanding transaction expense; to pay the person entitled to the amount or in accordance with the person's written direction; and Example of when transaction is finalised-- the settlement of a contract for the sale of property or the termination of the contract (c) to draw the licensee's transaction fee from the transaction fund when the amount, if any, mentioned in paragraph (b) has been paid and when the transaction is finalised. A trust money accounting system aims to ensure that all trust money held by licensees can be accurately accounted for at all times. Trust account and auditing requirements increase public confidence in the services of licensees. Copyright © - Harcourts International Ltd – v6May11 23 Government Agencies and Industry Bodies There are a variety regulatory bodies that govern the operations of the real estate industry in Queensland. Industry bodies also have codes of conduct and other rules and obligations that are applicable to member organizations. Regulation of the industry was introduced to protect the public by ensuring minimum standards of practice, conduct and competency in the industry. Those standards also offer some security to the industry by providing guidelines to define dealings with the public. Australian Competition and Consumer Commission www.accc.gov.au The Australian Competition and Consumer Commission is an independent Commonwealth statutory authority formed in 1995. The ACCC promotes competition and fair trade in the market place to benefit consumers, business and the community. It also regulates national infrastructure services. Its primary responsibility is to ensure that individuals and businesses comply with the Commonwealth competition, fair trading and consumer protection laws. Australian Livestock & Property Agents Association Limited (ALPA) www.alpa.net.au ALPA now represents more than 1200 agency businesses across Australia. The role of ALPA is to represent stock and station agents although many members of the Association are licensed estate agents, and over 1000 agent's representatives are employed by ALPA members. The purposes of ALPA with regard to real estate are: - to ensure that ALPA members are kept informed of changes to and requirements of the Estate Agents Act - to keep members up to date on industry trends Australian Property Institute (API) www.propertyinstitute.com.au API represents the interests of more than 7,500 property professionals throughout Australia. The Institute‟s primary role is to set and maintain the highest standards of professional practice, education, ethics and professional conduct for it members and the broader property profession. API members include residential, commercial and plant and machinery valuers, property advisers, property analysts and fund managers, bankers, property lawyers, and property researchers and academics. The Institute is committed to building and maintaining a strong base for the future of the property profession through broadening the expertise and knowledge of membership, who are bound by a Code of Ethics, Rules of Conduct and Professional Practice Standards. Real Estate Employers’ Association (REEA) www.reea.org.au REEA is presided over by a Management Committee comprising eight employer representatives from the Real Estate Industry plus the Secretary/Treasurer, an industrial relations consultant who has represented real estate employers, and REEA, since 1992. Copyright © - Harcourts International Ltd – v6May11 24 REEA's Committee meets regularly and deals with the following issues: - operation of the Awards and/or changes thereto. - negotiations with the PSAQ regarding those matters. - policy in relation to industrial matters generally. - gives instructions to the Secretary/Treasurer for Industrial Commission hearings. - controls the finances of the Association. - generally represents the best interests of Real Estate industry employers in Queensland. There is now a secretariat, operated by REEA Secretary/Treasurer, Bruce Siebenhausen, who is available to all members (but only members), which provides the following services: - Free telephone advice on any industrial relations issues, including interpretation of the Awards and Industrial legislation. - Free telephone advice on staff engagement and dismissal procedures. - Free regular updates on industrial matters including changes to the Awards and Legislation. Members also receive, as part of their membership fee, a bound Members' Handbook, which contains a host of essential information about the Association and its activities, and written information about a range of industrial relations issues. Residential Tenancies Authority (RTA) www.rta.qld.gov.au The Residential Tenancies Authority was established under the Residential Tenancies and Rooming Accommodation Act 2008 and is responsible to the Minister for Public Works, Housing and Information and Communication Technology. It is a self-funding statutory authority, operating on income generated from interest earned on the bonds it holds as custodian. The Act applies to people renting flats, houses, caravans, units, townhouses, manufactured homes and houseboats in private, public and community-managed rental accommodation. The RTA assists tenants, lessors, agents, residents and service providers in the following key ways: - Rental bond custodial service: The RTA holds and refunds rental bond money that is paid by tenants to lessors/agents; - Tenancy information and education: The RTA offers free information to all tenants, lessors, agents, residents and service providers in Queensland; - Dispute Resolution Service: The RTA's Dispute Resolution Service offers information about tenancy law, a telephone "shuttle" negotiation service, and conciliation conferences; - Investigations Unit: The RTA will investigate and prosecute offences under the legislation when appropriate. Office of Fair Trading – Queensland – Department of Justice and Attorney-General www.fairtrading.qld.gov.au The role of the Office of Fair Trading (Queensland) is to ensure that real estate licensees and sales consultants comply with the Estate Agents Act and its Regulations, including trust account procedures and professional conduct regulations The Office of Fair Trading promotes the existence of a fair and ethical marketplace within the community. In creating an equitable, informed, and safe marketplace, Fair Trading works to increase business and consumer confidence, which should result in improved economic performance and a strong contribution to the 'Smart State'. To achieve this, the Office conducts a range of activities and services to create the right marketplace environment, and deliver appropriate compliance and quality communication strategies. Copyright © - Harcourts International Ltd – v6May11 25 OFT goals are: - Fairer trading - Responsible business - Informed and confident consumers - Effective consumer and trader protection - Effective marketplace administrative infrastructure - OFT business excellence The Office's key activities include: - maintaining fair trading legislation; - ensuring businesses operate responsibly, through checking compliance with fair trading standards and legislation (including consumer product safety and trade measurement); - providing access to appropriate redress by consumer and regulation of improper trader behaviour; - providing customer oriented standards services such as business name registration, industry licensing and trade measurement; - resolving disputes, investigating complaints, and carrying out audit; and - providing access to information, advice and education on fair trading matters for business and consumers. These activities make a significant contribution to the development of a dynamic and competitive trading environment within Queensland, helping achieve status as the "Smart State". In delivering these services, the Office works closely with peak industry groups, consumer groups, individual businesses and consumers, and other relevant Government agencies. By promoting a dynamic, competitive and informed marketplace characterised by fair trading and effective consumer protection, the Office of Fair Trading contributes directly to the Government priorities of 'safer and more supportive communities' and 'community engagement and a better quality of life'. The Office of Fair Trading Grants licences and certificates of registration to real estate agents and sales consultants. These licences and approvals give the holders legal authority to engage in certain real estate activities in Queensland. Office of the Federal Privacy Commissioner www.privacy.gov.au The Office of the Privacy Commissioner is an independent office which has responsibilities under the federal Privacy Act. It provides protection for: - personal information about you that is handled by federal and ACT government agencies - personal information about you held by all large private sector organisations, all private sector health service providers and some small businesses - credit worthiness information held by credit reporting agencies and credit providers - personal tax file numbers used by individuals and organisations. Real Estate Institute of Australia (REIA) www.reia.com.au The Real Estate Institute of Australia (REIA) is the national professional association for the real estate industry in Australia. Since 1924, REIA has worked to represent real estate industry interests. REIA is a politically nonaligned organisation that provides researched and well-informed advice to the Federal Government, Opposition, media, and the public on a range of issues affecting the property market. REIA has an excellent reputation as the most credible source of knowledge and considered opinion regarding the commercial and residential property markets in Australia. Copyright © - Harcourts International Ltd – v6May11 26 Real Estate Institute of Queensland (REIQ) www.reiq.com.au The Real Estate Institute of Queensland (REIQ) is the main industry association representing Queensland real estate professionals. Its main objective is to lead the industry, create the best possible business environment for real estate practitioners, and to promote professionalism, ethical behaviour and integrity within the industry in Queensland. The REIQ liaises with other professional and government bodies on behalf of the industry. More than 85 per cent of all real estate agencies across the State choose to be members of the Real Estate Institute of Queensland (REIQ). The REIQ exists to support its 2000 member agencies - which in turn employ some 15,000 property professionals - with information, training, products, and resources that complement their business practices. REIQ accredited agencies are identifiable by their use of the REIQ accreditation logo that displays the current year. This is reissued annually, but only after the agency has successfully completed Continued Professional Development (CPD) and has been re-accredited. At the heart of REIQ accreditation is the REIQ Standards of Business Practice and CPD training, which provides the industry with education and support to uphold these standards. REIQ accredited agencies attend CPD training annually, gaining valuable insight into new and relevant issues within the industry. Working in partnership with REIQ accreditation is the Real Estate Industry Professional Standards and Consumer Complaints Tribunal. The REIQ - which was formed in 1918 - undertakes political advocacy on behalf of its members and the industry; it provides information in the form of property research, advice and training; acts as a source of real estate products and services; and provides a platform for dispute resolution between member agents. The REIQ also supports the community by providing relevant industry information relating to the buying and selling of property. The Small Claims Tribunal www.justice.qld.gov.au/courts/factsht/C07SmallClaims.htm The Small Claims Tribunal deals with disputes between such people as consumers and tradespeople, landlords and tenants, or private individuals The Human Rights and Equal Opportunity Commission www.hreoc.gov.au The Human Rights and Equal Opportunity Commission (HREOC) was established in 1986 by an act of the federal Parliament. It is an independent statutory organisation and reports to the federal Parliament through the Attorney-General. The goal of the HREOC is to foster greater understanding and protection of human rights in Australia and to address the human rights concerns of a broad range of individuals and groups. The HREOC: - resolves complaints of discrimination or breaches of human rights under federal laws - holds public inquiries into human rights issues of national importance - develops human rights education programs and resources for schools, workplaces and the community - provides independent legal advice to assist courts in cases that involve human rights principles - provides advice and submissions to parliaments and governments to develop laws, policies and programs - undertakes and coordinates research into human rights and discrimination issues. Copyright © - Harcourts International Ltd – v6May11 27 Ethical and Conduct Standards Real estate is complex and this complexity makes it imperative to have guidelines for behaviour. It is important to understand how you are expected to conduct the business of real estate. Ethical behaviour is a most important part of the real estate industry. The public employs real estate professionals because of their knowledge in the field. Sellers and buyers rely on these professionals to perform their duties fairly and honestly. Ethics refer to principles that guide how a person should behave. These principles help guide peoples decisions and actions. Ethical decisions result in the best consequences for the majority of people. Ethical values are what people feel are important within themselves and others and include: trustworthiness fairness respect honesty responsibility integrity Ethical principles are the rules that govern the behaviour related to these values. Fairness is related to behaviour that does not cheat or discriminate. Acting ethically is all about doing the right thing. Ethical and conduct standards that apply to real estate operations are governed by: the Competition and Consumer Act (refer to Consumer Protection and Privacy Legislation) the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 which sets the standard of conduct expected of licensees and sales consultants, and accompanies the Property Agents and Motor Dealers Act the Property Agents and Motor Dealers (Auctioneering Practice Code of Conduct) Regulation 2001 which sets the standard of conduct that applies to auctions Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PropAgMoDREAR01.pdf Property Agents and Motor Dealers (Auctioneering Practice Code of Conduct) Regulation 2001 http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/P/PropAgMoDAPR01.pdf There are additional standards that apply to real estate professionals who are members of the Real Estate Institute of Queensland. Key principles of the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 are: You must act in the best interest of your principal except where it would be unreasonable or improper to do so You must act fairly and honestly You must not knowingly mislead or deceive any parties in negotiations or a transaction You must not engage in harsh or unconscionable conduct You must exercise skill, care and diligence Copyright © - Harcourts International Ltd – v6May11 28 Where minor breaches of the Property Agents and Motor Dealers Act or Regulations occur, the Office of Fair Trading, will notify the licensee or sales consultant to the problem, advise how to rectify the problem and inform the offender that future conduct will be monitored. Action is taken to discipline a real estate professional if, after investigation, the Office of Fair Trading believes that the conduct is in breach of the Act or Regulations. Disciplinary actions include: issuing a warning accepting a written undertaking that the conduct will not reoccur starting proceeding before Property Agents and Motor Dealers List of Commercial and Consumer Tribunal (The Tribunal has a court substitute jurisdiction with regard to resolving disciplinary proceedings against licensees and registered employees, review administrative decisions of the Chief Executive and decide claims over $10,000 against the Claim Fund.) where conduct involves serious criminal activity, such as theft of trust money, referring the matter to Queensland Police As a result of a Commercial and Consumer Tribunal hearing, if a real estate professional is found to have contravened or failed to comply with the Property Agents and Motor Dealers Act and/or Regulations, Part 6 Division 2 of the Commercial and Consumer Tribunal Act 2003 gives the Commercial and Consumer Tribunal the authority to impose, where appropriate, the following penalties: reprimand the person (often verbally, ranging from counselling against repeating a similar mistake to a strong warning) require the person to comply with a requirement either within a specified period or for a particular period cancel the licence and disqualify the person either permanently or temporarily from holding a licence suspend any licence held by the person for up to one year (the licence would be reinstated after the end of the suspension period) impose any conditions or limitations on any licence (e.g. requirement to submit quarterly audit reports or not handling trust money) declare the person to be ineligible to hold a licence or to be an agent‟s representative, either permanently or temporarily require the person to perform or not to perform certain tasks impose a fine The objective of the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation is to raise the standard of real estate practice to be universally recognised as a profession respected and trusted by all. Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation is a statutory code regulating the activities of all real estate personnel engaged in real estate transactions. Copyright © - Harcourts International Ltd – v6May11 29 Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 Summary Regulation Number Regulation Details Regulations 1-4 Regulations 1 to 4 are introductory regulations covering administrative issues, objectives, the date the current Regulations came into operation, definitions for terms used in the Regulations, and compliance with the Code. Regulation 7 Honesty, fairness and professionalism An agent must, at all times, in the conduct of his / her profession, act fairly, honestly and professionally. Regulation 8 Skill, care and diligence An agent must exercise skill, care and diligence in the conduct of an agency, completing all work for a client as is reasonably practicable. Regulation 9 Agent to act in client’s best interests An agent must act in a client‟s best interests unless it is unlawful or unreasonable to do so. Regulation 10 Agent to act in accordance with client’s instructions An agent must act in accordance with a client‟s instructions unless it is contrary to this code or unlawful to do so. Agents must act according to price instructions. Regulation 11 Agent to keep client informed of developments An agent is to keep their client updated on the progress of a sale or rental, including market feedback from prospective buyers and tenants regarding price. Every expression of interest, whether written or oral, unless otherwise instructed in writing, must be communicated to the client immediately. Regulation 12 Agent to ensure employees comply with Act and code It is the licensee‟s responsibility to ensure employees are conversant with the Property Agents and Motor Dealers Act. Regulation 13 Representations by employees The responsibility of ensuring all employees are correctly licensed or registered lies with the principal licensee. The licensee must take steps to ensure that employees do not falsely represent themselves as the holder of a licence or use titles with suggest that they are the holder of a licence or in effective control of the business. Regulation 14 Fraudulent or misleading conduct This clause reinforces the Competition and Consumer Act and clearly makes it an offence to mislead a consumer or misrepresent a fact or information in any way. Regulation 15 High pressure tactics, harrassmen6 or unconscionable conduct An agent must at all times act in a manner that will not jeopardise the rights and interest of others, e.g. refusing to leave someone‟s home until they have signed a document, telling a consumer it‟s okay to sign a blank document (you‟ll fill in the details later). Regulation 16 Claiming membership or endorsement An agent must not claim to be a member of or be endorsed by any organisation or association when they are not, e.g. member of REIQ. Regulation 17 Conflict of duty or interest An agent must not accept an appointment to act, or continue to act, as an agent for a client if doing so will place the agent‟s duty or interests in conflict with the client‟s interests. An agent is not permitted by law to profit at the expense of their client. Regulation 18 Soliciting through false or misleading advertisements or communications An agent must not solicit clients or customers through false or misleading advertisements or other communications, e.g. bait advertising, failing to identify oneself as an agent in advertising and marketing materials, providing an over-inflated price. Regulation 19 Prior appointment of another agent or auctioneer An agent is required to protect consumers from unintentionally paying two commissions and take reasonable steps to ensure the property is not already under some form of controlled listing with another agent. Copyright © - Harcourts International Ltd – v6May11 30 Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 Summary Regulation Details Regulation 20 Conjunction sales A conjunction policy must be disclosed in the appointment form and agreed to by the client, however an agent must conjunct if the client authorises a conjunction sale. A licensee‟s policy is of little relevance in the eyes of an agent‟s fiduciary obligation to a client. Regulation 21 Advice about market price or rent A client must be provided with written up-to-date market research and information to substantiate how a price was determined (e.g. Comparative Market Analysis). Avoidance of the issue of price may be misleading. Don‟t overprice or underprice properties. Regulation 22 Finding out or verifying ownership and property description An agent must take all reasonable steps to verify ownership and a real property description so it can be correctly described on any legal documentation. Regulation 23 Finding out or verifying material facts The onus of verifying correctness of information is on the agent. The agent must conduct comprehensive searches on a property before it goes to the market. Regulation 24 Agent to encourage disclosure by client Agents should follow a procedure, such as a listing form, to ensure all relevant issues are discussed with the client, and the client is given every opportunity to reveal the pertinent information as it arises, e.g. inclusions in the sale/lease, whether building works comply with local government by-laws, etc. Regulation 25 Disclosure to customer that agent is the client’s agent The agent is bound by their fiduciary duty to their client and must represent the client‟s interests in utmost good faith. An agent must inform buyers and tenants of their legal commitment to the client. An agent cannot act for both parties in any real estate transaction. Regulation 26 Referral to service provider An agent cannot claim to be independent from a service provider when in fact they are receiving some kind of financial or material benefit directly or indirectly from the transaction. All relationships of this manner should be revealed on the PAMD form Disclosure to Buyer. Regulation 27 Goods and services An agent is only permitted to incur expenses for goods and services on behalf of a client if authorised first in writing. Action may be taken against an agent if they cannot prove they have secured the best deal for their client. Obtaining a number of quotes is advised. Regulation 28 Inducing breach of contract The act of persuading or using an incentive to end a legal relationship between contracting parties is a breach of the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation. Regulation 29 Duty to obtain maximum sale price An agent must obtain the maximum sale price for a client‟s property. Action may be taken against an agent if they cannot prove they secured the best deal for their client. Regulation 30 Opportunity to obtain independent advice or representation An agent should advise clients or customers to seek independent advice from a third party before entering into a real estate agreement or contract. Where a consumer declines the right to use a legal adviser, it is good business practice to insert on the appointment to act or listing form that the “client/customer has declined appointment of a solicitor at this stage”. Regulation 31 Failure to receive deposit An agent must immediately notify their client if the deposit cheque bounces, is an amount not agreed to under the original contractual agreement, or is not paid within the prescribed contract time. Regulations 32-39 Regulations 32-39 relate specifically to Property Management Regulation 40 Confidentiality An agent must not use or disclose confidential information about a client or customer obtained while acting for the client or dealing with the customer, however certain confidential information must be revealed to customers to protect the client‟s legal obligations in a transaction, e.g. structural problems, cover-ups in a building. Copyright © - Harcourts International Ltd – v6May11 31 Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 Summary Regulation Details Regulation 41 Recording of information An agent who gives information about a client or customer must ensure the information is accurate and up-to-date, disclose the information to the client / customer, give reasonable opportunity to review the information, inform the client / customer about how the information may be used, and amend the information if the information is inaccurate. Regulation 42 Publicity about code All real estate agencies must display a notice in a prominent position publicising the existence of the Code. Agents must also be in a position to direct a consumer to how they can secure a copy of the Code. Regulation 43 Principal licensee to have complaint handling procedure It is a mandatory requirement for every licensee to implement a procedure for handling complaints within their business. The procedure must be practical in application and readily accessible by consumers. Regulation 44 Regulation 45 The Code requires: a procedures policy to be in place for managing complaints written information to be freely available to consumers outlining what those procedures are, including: - how a complaint should be lodged with the agency (verbally or in writing); and - who the complaint should be lodged with a provision for a complaint to be investigated and a response delivered within 7 days Client to be notified of complaint and outcome An agent must notify the relevant client a complaint exists and keep them informed of proceedings if a complaint is made by a customer of an agency and involves a transaction. Compliance with complaint handling procedure Agents are responsible for establishing and maintaining an effective complaint handling and dispute resolution process and must comply with the decisions of an appointed independent mediator, arbiter, or court as a result of the prescribed dispute resolution process. The onus remains with the agent to ensure complaint handling and dispute resolution processes operate efficiently. The Real Estate Agency Practice Code of Conduct, as it relates to relationships between colleagues, concerns honesty and fairness, and the avoidance of unprofessional conduct which is detrimental to the interests and reputation of the real estate profession and contrary to good real estate practice. Your understanding of the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation for real estate professionals should be verified with your Business Owner and the Office of Fair Trading Queensland to ensure compliance with legislation. Specialist advice on ethical and conduct standards may be provided by and can be obtained from: your business owner or colleagues mentors or coaches government agencies industry and professional associations Copyright © - Harcourts International Ltd – v6May11 32 Breach of Contract Breach of contract is a legal concept in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party‟s performance. Clause 28 of the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 states that, “A real estate agent must not induce, or attempt to induce, a breach of, or an interference with, a contract between a client and a customer. Example – An Agent must not induce a customer to breach a contract with a client to get the customer to enter immediately into a contract with another of the agent‟s clients.” Inducement is the act of persuading or using an incentive to end a legal relationship between contracting parties. An inducement under this particular clause relates to inducing a breach of contract between a client and a customer. In effect, these relate to sales contracts and letting agreements where there is a contractual relationship between a seller and a buyer or a tenant and landlord. Breach of a code of conduct is a ground for starting disciplinary proceedings under Section 496 of the Property Agents and Motor Dealers Act 2000. Any person who contravenes the Property Agents and Motor Dealers Act or Regulations may be subject to penalty. Industry Employment Requirements Individuals wanting to operate as sales consultants or property managers in Queensland are required to be registered with the Office of Fair Trading Queensland. As a requirement of the Property Agents and Motor Dealers Act, your employer must make a record on an employment register when you commence or cease work. The current minimum education requirement to work as a real estate sales consultant or property manager is successful completion of the training requirements for a real estate sales consultant registration certificate. Through Harcourts, this course involves online learning and assessment prior to course attendance, pre-course projects and attendance at the Sales Programme course. An applicant for a real estate sales consultant registration certificate must have successfully completed, or been assessed as competent in, the following units of Property Services Training Package - CPP07: CPPDSM4008A (Identify legal and ethical requirements of property sales to complete agency work) CPPDSM4009A (Interpret legislation to complete agency work) CPPDSM4010A (Lease property) CPPDSM4012A (List property for sale) CPPDSM4015A (Minimise agency and consumer risk) CPPDSM4022A (Sell and finalise the sale of property by private treaty) CPPDSM4080A (Work in the real estate industry) Applicants for a sales consultant registration certificate must: be an individual be at least 18 years old have the educational or other qualifications as prescribed under the regulation or a comparable qualification not, within the preceding five years, have been convicted in Queensland or elsewhere of a serious offence not be currently disqualified from holding a licence or registration certificate be deemed suitable to hold a registration by the chief executive In determining suitability, the chief executive must consider the following: your character Copyright © - Harcourts International Ltd – v6May11 33 whether you have held a licence or registration under the Property Agents and Motor Dealers Act that has been suspended or cancelled whether an amount has been paid from the Claim fund because you did, or omitted to do, something that gave rise to a claim against the fund whether you have been disqualified under the Property Agents and Motor Dealers Act whether, within the previous five years, the tribunal or the District Court has made an order under the Property Agents and Motor Dealers Act because of your involvement as a marketeer of residential property your criminal history if you are affected by bankruptcy action whether you have been convicted of an offence against the Property Agents and Motor Dealers Act whether you are capable of satisfactorily performing the activities of a sales consultant whether your name appears in the register of disqualified company directors and other offices All licence and registration applicants must undergo a criminal history check when lodging a new application or renewal with the Office of Fair Trading. Under the Property Agents and Motor Dealers Act, Section 159, a principal licensee (business owner) must keep an employment register which includes details of all employment authorities (employment contracts), such as the activities the sales consultant is authorised to perform for the licensee and commencement of employment. If there is any change in an employee‟s particulars or activities, a correction must be made to the employment register immediately after the change. Employee and Employer Rights & Responsibilities Real estate employers are bound by two sections of responsibility to their employees, particularly sales consultants and property managers. Firstly, employers are required to meet the conditions of the Property Agents and Motor Dealers Act, which are specific to the real estate industry. The second section relates to the contractual relationship that exists between an employer and employee including the requirements of the Workplace Relations Act 1996. Sales consultants and other real estate staff must enter into an employment contract to establish the conditions of service and remuneration. An employment contract between a licensee and a sales consultant or property manager is a service contract, where the licensee retains the right to control the way that you work and is liable for those activities that are performed in the course of your employment. There is no approved form for an employment contract (employment authority) because each authority may differ substantially depending on the abilities of the sales consultant person and the employer's choice to allow or restrict the sales consultant's activities as a sales consultant to specific functions. The authority may allow the sales consultant to perform all functions other than those detailed in the authority that the sales consultant is not authorised to undertake. For example the employer may provide in a sales consultant's authority that they are not to handle trust moneys or maybe that they are or are not to enter agency authorities on behalf of the licensee. Under Section 130 of the Property Agents and Motor Dealers Act the employer may make the employee's authority as wide or as narrow as required for the business. In any employment relationship with employees, a licensee must: pay a minimum weekly salary compensate the employees for expenses properly incurred in the usual course of business activities take all reasonable precautions to ensure that employees are not subject to unnecessary risks in the course of employment by providing proper premises and equipment, a competent staff of people, security in dealing with the public, a safe system of work and safe access to that system under the Workplace Health and Safety Act 1995 and Workplace Health and Safety Regulation 1997 compensate employees for injury arising out of, or in the course of, this employment; this is a statutory requirement with the compensate scheme being WorkCover deduct an appropriate amount of income tax from employee‟s weekly pay and remit this to the Australian Taxation Office Copyright © - Harcourts International Ltd – v6May11 34 provide employee‟s with two copies of a Group Certificate of Tax Stamp Sheet at the end of each financial year give any employee one week‟s notice of intention to terminate employment or the payment of one week‟s salary – where dismissal is for misconduct, salary should only be paid up to the time of dismissal; where no employment contract exists, this relates to the employer‟s usual pay period Employers are required to comply with the Queensland Anti-Discrimination Act, particularly in the areas of: sexual and racial harassment discrimination on the grounds of race, religion, gender, status, handicap, etc. Queensland Anti-Discrimination Act 1991 http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/A/AntiDiscrimA91.pdf Employers are also bound by the following legislation: Sex Discrimination Act 1984 http://www.austlii.edu.au/au/legis/cth/consol_act/sda1984209.txt/cgibin/download.cgi/download/au/legis/cth/consol_act/sda1984209.rtf Discrimination Law Amendment Act 2002 http://www.legislation.qld.gov.au/LEGISLTN/ACTS/2002/02AC074.pdf Age Discrimination Act 2004 http://www.austlii.edu.au/au/legis/cth/consol_act/ada2004174.txt/cgibin/download.cgi/download/au/legis/cth/consol_act/ada2004174.rtf Equal Opportunity for Women in the Workplace Act 1999 http://www.austlii.edu.au/au/legis/cth/consol_act/eofwitwa1999497.txt/cgibin/download.cgi/download/au/legis/cth/consol_act/eofwitwa1999497.rtf Human Rights and Equal Opportunity Commission Act 1986 http://www.austlii.edu.au/au/legis/cth/consol_act/hraeoca1986512.txt/cgibin/download.cgi/download/au/legis/cth/consol_act/hraeoca1986512.rtf Disability Discrimination Act 1992 http://www.austlii.edu.au/au/legis/cth/consol_act/dda1992264.txt/cgibin/download.cgi/download/au/legis/cth/consol_act/dda1992264.rtf Racial Discrimination Act 1975 http://www.austlii.edu.au/au/legis/cth/consol_act/rda1975202.txt/cgibin/download.cgi/download/au/legis/cth/consol_act/rda1975202.rtf Employees also have responsibilities to their employers, which include: obeying lawful orders confidentiality and privacy relating to information held within the business honesty punctuality and attendance safety and care in the workplace knowledge of the terms and conditions of their employment A sales consultant acting for a licensee (or agent) has a number of responsibilities that are implied under Common Law. Some of these include: Follow instructions given by your employer except where it would be improper or unreasonable to do so Do not accept secret commissions Copyright © - Harcourts International Ltd – v6May11 35 Act in the best interest of your principal Use skill and diligence in the performance of your tasks Keep all trust money and that of your employer separate from your own Treat all matters related to your employer confidentially Work faithfully in accordance with any legal requirement applicable to your employer Maintaining confidentiality of your employer and the principals employing your real estate office is paramount. Any trade secret or sensitive information gained whilst employed in your real estate office is to be kept confidential even after your employment is terminated with your employer. Information, other than skills learned, must not be disclosed to any other party without consent to do so. You must not divulge any future plans of a principal employing the agency on an ongoing project after resigning from your position with the agency. In an employment contract in real estate, conditions are determined through private negotiation and agreement between employers and employees. Either an Individual Employment Agreement between an individual employee and particular employer may be used, or a Collective Employment Agreement between a group of employees and a particular employer. Employment Agreements must include the minimum „safety net‟ provisions of the Workplace Relations Act 1996 which are: four weeks‟ paid annual leave for each year worked one week‟s sick leave for every year of service maternity, paternity and adoption leave entitlements. gazetted public holidays as days off with no loss of pay a minimum weekly salary Workplace Relations Act 1996 http://www.austlii.edu.au/au/legis/cth/consol_act/wra1996220.txt/cgibin/download.cgi/download/au/legis/cth/consol_act/wra1996220.rtf Paid annual leave and paid sick leave are not offset against commission earned. A salary must be paid at intervals agreed between the employer and employees or, where no agreement exists, either weekly or fortnightly. The maximum interval at which salaries may be paid is one month. While sales consultants rely on commission income and experience a less stable financial existence, property managers receive a regular weekly or fortnightly wage. Information on pay rates can be accessed at www.wagenet.gov.au In employment agreements, employers and employees may negotiate above but not below the minimum conditions of employment. The employer is responsible for paying a regulated percentage of superannuation based on a sales consultant‟s gross income from the agency into a superannuation fund nominated by the sales consultant. Details of the employer‟s contribution to a superannuation fund should be included in the employment contract. An essential feature of an employment agreement for sales consultants is the details of commission payments. The minimum weekly wage will be an advance on commission, generally known as a retainer, which must be repaid to the employer when a commission is earned. This is intended to guarantee basic living conditions are met. When a sales consultant sells a property, the commission is shared between the employer and employee based on a previously negotiated and agreed percentage. Most employment agreements require the advance on commission to be subtracted from the sales consultant‟s share of the commission. Where the sales consultant‟s share of commission is Copyright © - Harcourts International Ltd – v6May11 36 insufficient to repay the advance on commission to the employer and the sales consultant‟s employment is terminated, the sales consultant is not liable to repay the outstanding amount to the employer. Where an individual employment agreement has not been negotiated between an employer and employee, one is „deemed‟ to exist based on award conditions. Any employees who do not enter into an individual employment agreement or a deemed agreement may be part of a collective agreement which applies to a group of employees working for a particular employer. A collective agreement is for a fixed term that is up to five years and cannot be altered during the term unless to correct anomalies or clarify issues. Collective employment agreements must address the same conditions as an individual employment agreement but must also be lodged with the Employee Relations Commission. Personal Presentation and Professional Image The name "Harcourts" is one of the most recognised in Real Estate. People associate the name with a dynamic, progressive yet respected and experienced real estate business. This validates clients‟ confidence in you as a Harcourts sales consultant. Harcourts goals of building the company brand and maintaining the company profile are achieved through everything done nationally and internationally, having a common look, feel and tone. To avoid being tempted to ignore formal guidelines and to 'do your own thing', the Brand Tools website has been developed to give you the simple tools to ensure you achieve maximum impact with Harcourts marketing. Visit Harcourts Brand Tools website for more details pertaining to Harcourts presentation and image: http://brand.harcourts.net/ Knowledge, Skills and Training The Harcourts Academy is a registered training organisation (RTO) which allows students to attain national qualifications toward sales registration, property management and full agency license. Undertaking courses through a Registered Training Organisation means that you will be acquiring skills to meet the needs of the industry and your employers as well as your own. RTOs must focus on industry requirements, ensure learners‟ needs are met, and continue to improve the quality of their systems. Training and support is fundamental to success in real estate. Through the Harcourts Academy, accredited trainers provide industry leading programs for continuing professional development for principals, managers and their staff to ensure that listing, selling and property management skills are maintained and improved. Attending the Harcourts Sales Programme – Getting Started The Harcourts Way is a requirement for all new sales consultants, those with less than 12 months experience, and those new to the industry, while attending the Harcourts Sales Programme – Succeeding The Harcourts Ways is a requirement for all experienced sales consultants and staff. The 45 Days in the Field between the Sales Programme – Getting Started The Harcourts Way and the Sales Programme – Succeeding The Harcourts Way provides you with in the field experience to apply your skills and knowledge with the support of your business owner or manager and colleagues. Harcourts runs regular courses in Sales, Administration, Management and Specialist areas. Upcoming Academy courses and online registration are available through the following website: http://online.harcourts.com.au/?module=/content/hip/Academy/Academypromotion.ascx Copyright © - Harcourts International Ltd – v6May11 37
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