Dealing with Real Estate Agents

Licensed to deal

If you are looking to buy, sell or let a property, chances are you will deal with a real estate agent or representative from the industry.

Real Estate Agents, auctioneers and their salespeople, restricted letting agents and property developers (who directly sell more than six of their properties in a year) must be licensed by the Office of Fair Trading and follow a strict Code of Conduct.

Do not deal with an unlicensed person as you will not have the same level of consumer protection if things go wrong. Check you are dealing with a licensee - their licence must be clearly or prominently displayed at their place of business. If you can't see it, ask to be shown and check the date to ensure it is current.

The Office of Fair Trading reviews applications, issues licences and registration certificates and keeps details on a public register. You can inspect and take copies of licence information from the register for a small fee.

Agents who are members of the Real Estate Institute of Queensland (REIQ) must also follow the REIQ's Code of Ethics and required processes. To find an REIQ Member Agent, visit www.reiq.com.au, select Member List, and follow the prompts to find a member in your local area.

Appointing an agent

While you have the freedom to choose any agent you wish when selling a property, engage a rental manager or appoint a buying agent, the agent cannot legally act for you unless you have first appointed them in writing.

If you are employing an agent to conduct work for you, you need to formally appoint them in writing using the appropriate approved form (see Forms Page).

If you are selling a property, ensure you understand the different types of appointments (open listing/sole agency/exclusive agency), what they offer, cost and how long the appointment period is before you sign up. Note that time restrictions apply to certain appointments and the approved re-appointment form should be used to re-appoint agents (see Forms Page). For more details on the types of appointments available, see the instructions on each appointment form.

Codes, Conduct and Consumer Complaints

Licensed agents, auctioneers, property developers and restricted letting agents are required to conduct themselves and their businesses according to a mandatory Code of Conduct.

Every type of licence has a Code of Conduct and all require licensees to deal fairly, honestly, professionally and ethically with clients and customers. The codes also require that there be a complaint handling process in place to resolve disputes.

The Act requires agents to bank monies received from all real estate transactions, or with a direction for use (eg. advertising, marketing expenses and searches), into a trust account and provide receipts. This prevents your money being misused and reduces misunderstandings.

The Act also restricts the way agents can pay monies to a trust creditor (someone who is owed money by the agency). Agents are not allowed to give cash refunds and must provide payment only by:

  1. Trust account cheque; or
  2. Electronic Funds Transfer from the trust account to the account the person receiving payment specifies.

If you have a complaint about an agent's conduct, you should approach them first to try to resolve the dispute through their complaint process.

REIQ members follow an additional Code of Ethics set by the REIQ, which specifically requires members to notify the REIQ of any charges of unethical practice against them, and provide all relevant facts and documents to the institute for investigation and judgement. Visit www.reiq.com.au for more information.

If you are not satisfied with the result, you can complain in writing to the Office of Fair Trading. Officers will investigate to see if there is evidence that the law has been broken.

Investigations may lead to disciplinary charges, reprimands, fines and suspension or disqualification of licences or registration certificates.

You can obtain a copy of the Codes of Conduct under the Property Agents and Motor Dealer Act 2000 from www.fairtrading.qld.gov.au under the legislation section (scroll down the list to Property Agents and Motor Dealers listings), or call 1300 658 030.

Getting the real picture

You are protected if agents make false or misleading representations about a property.

If an agent provides you with information about anything to do with the transaction, e.g:

  • The value of property (including approximate market or selling price)
  • The property's income-producting potential;
  • the sales history of similar properties; or
  • the income tax benefits of buying a property
  • then it should be factually correct and not misleading.

If you lose money after relying on an agent's false or misleading claims, the agent may be required by the Office of Fair Trading to substantiate any representations they may have made to persuade you to buy, list or rent a property. There are severe penalties for misleading conduct. Also if you lose money as a result of misleading conduct you may make a claim to the Property Agents and Motor Dealers Act 2000 Claim Fund to seek compensation for any monetary loss (except with respect to investment property purchases).

The situation is different if you lose money after dealing with a property developer, even if they are licensed. You cannot seek reimbursement through the Property Agents and Motor Dealers Act 2000 Claim Fund. For more information on making a claim, go to the 'Resolving Complaints' page.

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