22 August 2014

Higher Agent Commissions Coming; Real Estate Industry Streamlined

The Property Agents and Motor Dealers Act (PAMDA) 2000 has been repealed and replaced with two new pieces of legislation separating the real estate industry from motor dealers and chattel auctioneers.

The new pieces of legislation are; Property Occupations Act 2014, under which Property Agents and Auctioneers will be regulated, and Motor Dealers and Chattel Auctioneers Act 20014 under which Chattel Auctioneers including Motor Dealers will be regulated.

Agent commissions under the new legislation will be deregulated meaning Agents can charge an unlimited commission where a Client and the Agent can agree. A cap on Agents commission of "5% for the first $18,000 then 2 1/2% thereafter" will become redundant.

Principal of Rapid Realty Townsville Aaron McLeod said, 'Agents are unlikely to change the rate of their commission for services in the first instance because it will take some time for the market to adjust to the new pricing culture. The consumer market for real estate services is expected to show some resistance, despite the fact that Agent fees have not changed in decades.", Mr McLeod said.

Mr McLeod commented that "most Agents will not change their commissions including our Agents but residential sales of multiple dwellings and prestige property sales would most likely come under review with higher commissions being charged by Agents due to the comparable risks involved in these types of transactions."

The new legislation also streamlines the amount of forms needed to complete property sales, letting and property management. The Appointment of Agent form now will replace seven existing forms, providing administrative relief for both Vendors and Agents.

The Warning Statement (Form 30c) will be removed altogether but a simple statement placed in a conspicuous position where the buyer signs the contract will be acceptable.
The current lawyer’s certificate form to waiver or shorten the cooling off period in the current legislation will also be removed.

Property Developers needing a specific licence under the current law will be deregulated, while pastoral houses will be included into other licence categories. Residential letting agents will be able to manage multiple sites and the application will be integrated with other real estates.

Business sales will no longer need to state an end date on the agreement for a continuing appointment. An open listing may be ended by any party at any time in writing.

The Queensland Office of Fair Trading being the department that administers and enforces the legislation and regulations have conducted extensive consultation with industry leaders and institutions such as the Real Estate Institute of Queensland.

REIQ chairman Rob Honeycombe said, "The simplified laws would deliver important benefits for both real estate professionals and consumers. He also said, "The Property Occupations Act and other associated legislation passed today (May 2014) wold cut red tape and make it easier to buy and sell real estate throughout Queensland."

Agents will no longer be required to disclose their commissions to the buyer of real estate, as it has been under the current legislation.

The real estate industry anticipates the new legislation to be effective from October 2014 with a moratorium for Agents having to update their practices and procedures.

References:

Office of Fair Trading – www.fairtrading.qld.gov.au

REIQ – www.reiq.com.au

Rapid Realty Townsville – www.rapidrealty.com.au
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