Some people have established small businesses in NSW providing assistance to home owners wishing to privately sell their home without the intervention of a licensed real estate agent. The services offered through such businesses may include the preparation of fliers and signage as well as assistance with ‘open house’ inspections. These operators generally charge a set fee, rather then a percentage of the eventual selling price as agents do and believe they offer their clients a more personalised service than what may be provided by a licensed agent.
Some of these services may be provided without a licence, while others fall under the jurisdiction of the Property, Stock and Business Agents Act 2002. Here are a few examples of the kinds of businesses we have examined in this area.
John’s neighbour, Mary asks him to show some prospective buyers through her house while she is away on holidays. John does so, and the interested people subsequently purchase the property. Mary rewards John with a case of wine. In showing the house on this one-off occasion John does not need a licence.
Phil sets up a website from where he charges a fee to assist people sell their houses. Phil advertises the properties on his website and includes his contact details in each one. He also produces the ‘for sale’ signs which he places on each property. Phil takes calls from interested prospects and passes them on to the vendors. To conduct this business, Phil would need a licence under the Property, Stock and Business Agents Act 2002.
Jeff sets up a website to take holiday accommodation bookings on behalf of several bed and breakfast accommodations operated by friends in his area. Visitors to his site are referred to his friends and Jeff is paid a fee when accommodation is booked. Jeff is carrying on a business and inducing people to enter into a transaction that gives the person a right to stay in the accommodation. He would require a licence under the Act to carry on his business.
However, under a specific exemption from the Act granted to short term accommodation booking agents (for stays of not more than 2 months), Jeff does not need a licence if the stays are less than 2 months and he does not accept any money from people making a booking.
As the examples above illustrate, only a limited range of services relating to the selling of real estate may be provided without holding a licence, such as:
(a) placing vendors’ advertising on your web site provided that any prospective purchaser can only contact the vendor to express their interest, and not you
(b) assisting vendors with the preparation of signage for their property or the production of advertising fliers.
Before setting up any business of this kind you should get legal advice to find out if you require a licence. NSW Fair Trading cannot provide legal advice to you.
You do not require a licence to manage or operate a general boarding house, but all boarding houses which provide accommodation to 5 or more people for a fee must be registered with Fair Trading. Operators of assisted boarding houses must obtain a licence from Ageing Disability & Home Care (ADHC). For more information go to the Boarding houses page on the Fair Trading website.
If you were to operate a business in the following manner you would require an appropriate licence under the Property, Stock and Business Agents Act 2002.
Carrying on a business, for reward and:
(a) taking calls or interest from prospective purchasers and passing them on to the vendor
(b) including your business's telephone or other contact details on advertising signage used by vendors
(c) taking prospective purchasers through the property that is for sale, or accompanying the vendor when this is done
(d) providing the contract for the sale of the property to prospective purchasers or discussing the merits of the property with them
(e) introducing prospective purchasers to the vendor of the property
(f) taking calls from prospective users of the holiday accommodation and passing them on to the owner of the property
(g) directly arranging for the booking of accommodation by a third party in relation to holiday or short-term accommodation for which you act as an agent. For example, the taking of fees and rent.
The Act also places stringent supervision and conduct responsibilities on agents. These requirements reflect the view that qualified supervision is paramount in the handling of large sums, such as those that are placed in trust during property transactions. The requirement also acknowledges the particular need in this industry for guidance in procedural matters and ethical conduct.
If you still wish to conduct your business and provide the services for which a licence may be required, contact the Property Licensing Branch of NSW Fair Trading on 9619 8799.