What is an authority to act in real estate

The following is a summary of the requirements under the Real Estate and Business Agents Act 1978 (the Act), the Real Estate and Business Agents (General) Regulations 1979 (the Regulations) and the Real Estate and Business Agents and Sales Representatives Code of Conduct 2016 (the Code of Conduct), which an agent must comply with in order to have a valid appointment to act. A valid appointment to act enables the agent to receive remuneration and or recover expenses as agreed with the principal for the services provided.

Requirements under the Act

Section 60(1)(a)

An agent must be licensed and the holder of a current triennial certificate.

Section 60(1)(b)

An agent must have a valid appointment to act in writing signed by the person for whom the services are being provided or his lawfully authorised agent.

Section 60(2)(a)

The appointment must be contained in a document

Broome Real Estate Pty Ltd vs Howard [1999] WADC 73

Section 60(2)(a)(i)

The appointment must clearly set out the services to be rendered, eg Appointment to Sell, Auction, etc.

Section 60(2)(a)(ii)

Where specific property is to be the subject of those services the appointment must clearly identify the property; eg address of property, title details; business etc.

Section 60(2)(a)(iia)

Clearly set out a method by which the amount of remuneration is calculated.

Section 60(2)(c)

The person obtaining the signature of the principal(s) on the appointment must give a true copy of the appointment to the signatories immediately after the appointment is signed.

PENALTY $5,000

Applies to a person who demands or receives any commission, reward or other valuable consideration in contravention of the applicable legislation (s.60(3) of the Act).

Additionally, the State Administrative Tribunal can order repayment of commission, reward or other valuable consideration held in contravention of the Act or Regulations (Section 103(1)(d)).

Requirements under the Regulations

Regulation 6BA(2)

The appointment must contain a statement to the effect that commission charges are not pursuant to any scale fixed by law and are to be agreed upon between the parties. This statement must be placed immediately before any statement outlining the commission charges agreed to.

Regulation 6BA(1)(a)

Where the agreed commission, reward or other valuable consideration is expressed in percentage terms, it must also be expressed in monetary amounts (e.g. 3 percent of $450,000 equals $13,500)

Regulation 6BA(1)(b)(ii)

Where the agreed commission, reward or other valuable consideration to be received for services rendered (i.e. sales, as defined in s.61(4a) of the Act) is expressed as an hourly, weekly or other periodic rate, the maximum sum payable must also be specified in monetary terms (eg $500 per week to the maximum $3,000)

Regulation 6BA(1)(c)

Where the calculation of remuneration is dependant upon the use of certain services (e.g. property management and services) the appointment shall provide an explanation of the charges (eg gross rent, gross collections, letting fee) on which the fee for those services is based.

Regulation 6BA(1)(d)

Where any expenses are to be recovered by the agent, the agent must specify the nature of those expenses and clearly set out the method by which those expenses will be calculated.

Regulation 6BA(3)

The appointment to act must contain a statement in plain language to the effect that clients may seek assistance from the Commissioner if they have a dispute in relation to fees.

Code of Conduct

Rules 17, 19 and 20

Any appointment to act signed by a principal (Seller / Landlord) must provide that any agreed commission, reward, or other valuable consideration, and any advertising or general expenses, be in writing with a maximum amount specified and initialled on the agreement by the principal.

First published 12 Mar 2014

Print Version *

1 Definition
2 References
3 Definition Information

An Authority to Act is an official permission given by a person to another person and/or entity to act on certain matters, or granted to a person or entity to act on behalf of another person through an existing legal instrument for a certain period of time.

An Authority to Act can be given in relation to all business transactions with the University, or extended in relation to certain matters only.

USQ Defined.

Approved Date	9/7/2015
Effective Date	20/7/2015
Record No	15/1865PL

Complying with the law and observing Policy and Procedure is a condition of working and/or studying at the University.

* This file is available in Portable Document Format (PDF) which requires the use of Adobe Acrobat Reader. A free copy of Acrobat Reader may be obtained from Adobe. Users who are unable to access information in PDF should email to obtain this information in an alternative format.

As a property agent, you must not do anything for a client until they appoint you in writing. Basically, this is a service agreement between you and the client. It sets out the rights and obligations of both parties.

The appointment

You must fill out an appointment form. Once you and your client both agree on your terms, you will each need to sign the form. You must:

give the completed form to your client
keep a copy for your records.

Appointment of a property agent, resident letting agent or property auctioneer

The appointment to act must set out:

the services you will provide
any limits, restrictions or conditions on your services
the commission, fees and expenses that the client will pay you for your services
the due date (or dates) for each payment
an end date (for a sole or exclusive agency).

You will need to declare any financial benefit that you expect to gain from a third party. This might be:

any surcharge for renters to access services such as pay TV, linen, cleaning (over the actual expense that you pay)
any rebates you get to refer clients to other businesses, such as a mortgage broker.

Transferring appointments

You can assign your appointments to another real estate agent if:

your original appointment lets you do so
or
the client consents to it in writing.

This may be, for instance, because you sell your business.

Time frame

Single appointment

You can enter a single appointment for a one-off service or services. This includes selling a house or houses.

You can renew a single appointment. To do so, you and the client must fill out the reappointment section of the same appointment form you signed. You must do this no more than 14 days before the expiry date of the appointment.

Continuing appointment

A continuing appointment allows you to do a service or several services for a client over a period. They include:

rental property management
resident unit management
project marketing
affordable housing.

These types of appointments allow either you or the client to cancel the agreement. To do so, you or your client will need to give at least 30 days written notice. You may have a shorter notice period if you and the client mutually agree on it.

Appointment types

Open listing

The seller can:

open list their property for sale with several agents
cancel the appointment at any time by writing to the agent.

An open listing lets the seller hire multiple agents, any of whom may sell the property. They only pay the commission to the agent who is the effective cause of sale.

Either you or your client may end the agreement at any time. You or your client must give written notice to do this.

If you enter into a sole or exclusive agency agreement, the appointment can continue as an open listing:

after the sole or exclusive agency agreement has ended
or
if the client agrees in the appointment.

Exclusive agency

If you become the exclusive agent for a property, you have the sole right to make the sale. You are entitled to a commission for selling the property, regardless of who actually sells it.

This means that you may still potentially claim a commission if:

another agent sells it
the client sells it themselves.

You must give the seller a notice stating:

that you are acting as an exclusive agency
how an exclusive agency is different from a sole agency
that you may still claim commission if somebody else makes the sale
how long the term of appointment will last
whether it will become an open listing after the expiry date.

If you agree on a term of more than 60 days then the appointment must remain in effect for at least 60 days. Either party may end the appointment as long as they give a minimum of 30 days written notice. The maximum term of appointment for the sale of 1 or 2 properties is 90 days.

Sole agency

A sole agency is similar to an exclusive agency. You may still potentially claim a commission if another agent sells it. Unlike an exclusive agency, you are not entitled to a commission if the client sells it themselves.

You must give the seller a notice stating: