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Rules of conduct 

Supervision

The Property, Stock and Business Agents Act requires that all agency businesses be effectively controlled and supervised by a licensed agent.

Proper supervision is vital, particularly where large sums of money and trust accounts are involved. Proper supervision also helps promote ethical conduct in employees.

Poor supervision of employees can cause distress and financial loss for consumers. It leaves the door wide open for some employees to adopt unethical practices in their dealings with consumers, and can lead to negligence, misleading conduct and fraudulent use of trust money.

For these reasons, the Act introduces tighter requirements for the supervision and control of employees and clarifies the responsibilities of licensees for employees’ conduct.

Licensees in charge

Each place of business must be in the charge of a licensee, who is responsible for the proper supervision of the business carried on there and for the actions of all employees.

An individual licensee is responsible for the supervision of their own place of business. A licensee who has more than one place of business must employ a licensee to be the person in charge at each other place of business. A corporation that holds a corporation licence must employ licensees to be in charge of each of the corporation’s places of business.

A licensee cannot be in charge of more than one place of business or act for more than one licensee at a place of business. In very limited circumstances, the Commissioner for Fair Trading may grant an exemption from the licensee-in-charge requirements.

A licensee cannot be employed to be in charge of a place of business if they are also the licensee-in-charge of another place of business.

A licensee-in-charge of a place of business must hold a licence in the category relevant to the type of business carried on there. For example, a person in charge of a real estate agency business must hold a real estate agent’s licence.

In limited circumstances, the Director General may grant an exemption from the requirement that each separate agency office be under the charge of a separate licensee. For more information refer to the Exemptions to licensee-in-charge-rule.

Supervision requirements

A licensee is responsible for the supervision of their business. A licensee employed by another licensee as the person in charge of a place of business is responsible for the proper supervision of the business carried on there. The licensee who owns the business also remains accountable for the actions of employees. Proper supervision entails:

  • supervision of employees engaged in the business,
  • establishment of procedures designed to ensure that the provisions of the Act and Regulation and other relevant laws are complied with, and
  • monitoring the conduct of the business to ensure that those procedures are followed.

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 of employees in procedural matters and ethical conduct.

The Act adds further to the responsibilities of licensees by requiring that a licensee notify the Director General as soon as any failure to account for trust money is identified. Similarly, franchisors and industry associations are required to notify the Director General in writing within 7 days of becoming aware of a failure to account by a licensee.

Director General's guidelines on supervision

The Act enables the Director General to issue guidelines for licensees as to what constitutes proper supervision. A failure to comply with the requirements of the guidelines is deemed to be a failure to properly supervise the business and carries a penalty not exceeding 200 penalty units ($22,000) in the case of a corporation or 100 penalty units ($11,000) in any other case.

Initial supervision guidelines commenced on 1 March 2005. For more information refer to Property, Stock and Business Agents Act Section 32 guidelines.

Employees

Licensees are prohibited from employing people who are disqualified from holding a licence or certificate of registration or who have had their application for a licence or certificate refused on the basis that are not a ‘fit and proper’ person to work in the industry. A person cannot be employed if their licence or certificate is suspended or cancelled.

A certificate of registration holder is required to be employed by a licensee in order to carry on any of the work of a salesperson or registered manager.

All agency work by a certificate of registration holder must be done under the supervision of the licensee in charge of the place of business at which the certificate holder is employed. The licensee must hold a licence in the category relevant to the work carried out by the employee. For example, a stock and station salesperson must be supervised by the holder of a stock and station agent’s licence.

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