If you are currently in the industry, how the changes affect you depends on the type and level of licence you currently hold. Read on for specific information for On-site Property Manager Agent’s Licence holders.
There has been an important development in how the new legislation is applied to LICs. Previously Fair Trading advised that only one LIC could be nominated for each business from 23 March. This information has now been revised following queries from industry and further legal review of this requirement.
Fair Trading has now issued further advice to corporation licensees that a business may continue to nominate multiple licensees in charge if it chooses to do so.
This means that corporation licensees previously asked to nominate a single licensee in charge will no longer have to do so. The business can continue to operate with multiple nominated licensees in charge.
If you have previously responded to our request to nominate a single LIC, we will disregard your response and the corporation will retain all nominated LICs.
The information below has been updated to outline the requirements regarding LICs.
Select one of the options below to learn more
Your licence and authorised functions
On 23 March 2020, you will be automatically issued with a Class 1 Agent in Real Estate – On-site Residential Property Management. These licences are conditioned to the work currently done by an on-site residential property manager. You can perform on-site residential property management functions, which include:
- acting as an agent for giving possession of residential premises under a lease, licence or other contract
- acting as an agent for collecting bonds, deposits, rents, fees or other charges in connection with any such lease, licence or other contract.
From 23 March 2020, a certificate holder (Assistant Agent) in Real Estate will be unable to enter agency agreements or contracts for the sale of land and are unable to authorise the withdrawal of money from a trust account.
Agency agreements are not binding until signed by an Agent. As an Assistant Agent – On-site Residential Property Management, you can still enter agreements for the lease of premises and prepare agreements.
Why can’t an Assistant Agent bind parties to an agreement?
This is a key reform to increase the overall level of qualification of industry participants to a standard that is more appropriate for the demands of the market today. Under the reforms, the Assistant Agent is an entry level position to allow new entrants to gain the experience and knowledge required to qualify as an Agent.
Choosing to remain at the current entry level will no longer be possible. To remain in the industry, existing certificate holders and new entrants are required to complete the Certificate IV qualification and undertake a range of experiences to qualify as a Class 2 Agent within 4 years.
Can an assistant agent continue to inspect properties and complete inspection reports?
Yes, an assistant agent can continue to inspect properties and complete inspection reports for sales or property management. However, both the assistant agent preparing the inspection report and the licensee entering into the agency agreement for the property, will need to ensure that the inspection is carried out properly and be satisfied that the contents of the inspection report are true and accurate.
Can I be held liable for any breaches or inaccuracies in agreements that I sign?
Yes, as a signatory to the agreement, you are confirming the agreement is correct and complies with the legislation. If there is a breach or inaccuracy, you may be penalised.
Why will my licence be conditioned to on-site residential property management?
Under the reforms, a number of work categories will be grouped into the real estate category. These include real estate sales and leasing, business broking and on-site residential property management.
All persons carrying out these functions will transition to a licence in the real estate category, but be conditioned to the work they were previously qualified for.
How do I get a licence without restrictions?
To transition to a Real Estate licence without restrictions, you will need to complete the new Certificate IV Real Estate Practice and show evidence of achieving the required work experience.
As you have previously completed some units of a Certificate IV for your current licence, you may be eligible for recognition of prior learning for some units and you should discuss this with your registered training provider.
Nominated Licensees-in-Charge (LIC)
A learning pathway has been introduced for real estate agent licences that require a person to:
- complete entry units and obtain a Certificate of Registration as an Assistant Agent
- complete a Certificate IV qualification and 12 months’ experience to obtain a Class 2 Agent licence, and
- complete a Diploma and 2 years’ experience to become a Class 1 Agent.
Under the reforms, any person who is nominated as a LIC must hold a Class 1 Agent licence in the relevant category of work.
On-site residential property management differs to many other property roles and there are special provisions to recognise these differences. From 23 March 2020, a person can apply for a Class 1 Agent licence restricted to on-site residential property management by completing a Certificate IV in Real Estate Practice. While Class 2 licences will still exist in the category of on-site residential property manager, there will be no requirement to first complete the pathway through Assistant Agent and experience as a Class 2 Agent in order to obtain a Class 1 licence restricted to on-site residential property management.
A Class 1 Agent can undertake all functions of on-site property management functions, except authorising the withdrawal of trust monies, unless they are an LIC.
Other significant changes to rules relating to LICs include:
No parts of the business can be left unsupervised by an LIC
Currently, NSW laws require a different LIC to be in charge of each place of business.
From 23 March 2020, an LIC may be nominated to be in charge of an entire business or there may be several LICs responsible for different parts of the business carried out under a licence – so long as no part of the business is left unsupervised by a LIC. However, there cannot be more than one LIC for the same part of the business.
These requirements apply to:
- corporation licence holders
- individual licensees who carry on business under a class 2 licence, and
- a class 1 licence holder who carries on business (who would be the LIC for their business).
These licensees are referred to as a ‘principal licensee’ in the Supervision Guidelines (in force from 23 March 2020).
It is up to the principal licensee to determine how they apportion the business. For example, a principal licensee may appoint an LIC for multiple place(s) of business or one for each business area, such as strata, real estate sales or property management.
Only a LIC can withdraw funds from general trust accounts
From 23 March 2020, withdrawing general trust account funds is restricted to LICs only. Only one LIC can authorise the withdrawal of funds from any one trust account. However, an LIC can be responsible for authorising withdrawals from multiple trust accounts.
Businesses will need to review their processes for preparing and authorising withdrawals to ensure they comply with this requirement.
If the nominated LIC is not available, a principal licensee must advise of the replacement LIC
If the nominated LIC is away from the business (for example, due to ill health or leave) the business must appoint a temporary LIC in their place. From 23 March 2020, you will need to advise Fair Trading within 5 business days of the details of the person temporarily replacing the LIC. The replacement LIC must hold a Class 1 Agent licence in the relevant category and will be responsible for discharging the duties of an LIC.
Can I hold a Class 1 licence and not be the nominated LIC?
Yes. It is expected that many companies will want to retain persons qualified as a Class 1 Agent to provide supervision, leadership and to provide relief when the nominated LIC is absent, if required.
How does a business withdraw trust funds if the LIC is unavailable?
A licensee can nominate a replacement licensee in charge at any time, so long as that person holds a class 1 licence in the appropriate category of work. Under the new laws, an agency must notify Fair Trading within 5 business days of the details of the person (temporarily or permanently) replacing a nominated LIC. The replacement LIC will be responsible for discharging the duties of an LIC. Use of electronic banking facilities while the licensee in charge is away from the office should help to minimise the need for agencies to appoint an alternative licensee in charge.
Licence duration and fees
From 23 March 2020, Class 2 and Class 1 Agents will have the option to renew their licence for a period of 1, 3 or 5 years.
Licences fees have been adjusted to reflect the new levels of licences. The application and renewal fees* are as follows:
|1 year||3 years||5 years|
|Class 2 Agent||$501||$1061||$1621|
|Class 1 Agent||$758||$1393||$2028|
|1 year||3 years||5 years|
|Class 2 Agent||$354||$914||$1475|
|Class 1 Agent||$464||$1099||$1734|
- *Fees current as at 23 March 2020 and may be subject to CPI increase from 1 July 2020.
You will also retain your current licence number ‘for life’. Even if you make changes to the type of licence you hold, or leave the industry and later return, you will retain your current licence number.
Why have some fees increased?
The fee structure has changed to better reflect the risks and responsibilities and licence processing requirements for each role in the new licence framework.
Part of the fee is a contribution to the Compensation Fund to cover consumer losses arising from an agent’s failure to account for money.
As the responsibility for releasing funds from a trust account now sits with LICs only, the contribution has increased for Class 1 Agents, and reduced for Assistant Agents and Class 2 Agents.
Processing components of the fee have been adjusted so that these are proportionate to the requirements for each role.
How to change my existing licence to the new one
Most Agents won’t need to do anything straight away. If your licence is current as at 23 March 2020, you will automatically be issued with a Class 1 Real Estate Agent licence – On-site Residential Property Management* on 23 March 2020. When you next renew, you will receive your new licence with the new licence name.
*This licence pathway is specifically for current holders of an On-site Residential Property Manager licence. All other licence holders will be transitioned to Class 2 Agent licence in the equivalent category.
Can I use my current licence?
Yes, you can use your current licence until you next renew your licence.
Will my licence number change?
No, you will retain your current licence number.
Do I need to change my business cards and other published information?
This will depend on how you refer to your current position. You can still use the terms ‘On-site Residential Property Manager’ and ‘Agent’.
What if I haven’t renewed my licence by 23 March 2020?
As long as your certificate is renewed within the restoration period (3 months from the expiry date), you will be automatically transitioned to hold a Class 2 licence in the equivalent category.
If your licence has expired more than 12 months before 23 March 2020, you will need to reapply but will be qualified based on your existing Certificate IV qualification.
You will also need to show that you have completed the required 12 months’ work experience.
Alternatively, if you have held an equivalent licence for 2 or more years and this licence did not expire before 23 March 2015, you will also satisfy the qualification requirements.
Continuing Professional Development (CPD)
CPD will also undergo significant change and you will have new requirements. Compliance with the CPD requirements will continue to be a condition of holding your licence.
Key changes to CPD include:
- You will need to complete CPD on an annual basis, starting on 23 March each year.
- A Class 1 Real Estate Agent – On-site Residential Property Management is required to undertake 9 hours of CPD each year. Of this, 3 hours are compulsory topics determined annually by Fair Trading, and 6 hours are elective topics. 3 hours of the elective topics must be related to business management.
- Compulsory topics are delivered by industry associations, government agencies and approved entities. The details of approved providers will be available on our website before the reforms start.
- Individuals can have their licence or certificate of registration suspended if they do not comply with their CPD requirements.
Fair Trading is developing an online reporting tool for the completion of CPD which will be available later in 2020. Before this is ready, you should retain your own record of completion of CPD.
For more information on CPD, refer to the CPD requirements.
If I have completed other CPD since my last renewal, will this credit towards my first year?
If the CPD was based on any of the specified elective topics, it may be counted towards the first year. More information is available in the CPD requirements
Do I need to keep a record of CPD? Will I need to make a statement verifying I have completed my CPD?
You will need to keep your own records until the online reporting tool is available. Licence holders must retain their records for 3 years.
Under the current CPD arrangements, the CPD year and reporting is linked to your licence renewal. Going forward, licences may be issued for 1, 3 or 5 years.
This means the current practice of having CPD reporting periods aligned to an individual’s renewal date must cease.
Applying for, renewing or changing my licence
To assist you manage your licence, Fair Trading is developing a new licensing system which will be available from 23 March 2020.
The online licensing system improves our services with:
- digital lodgement for all applications, changes and renewals
- faster processing times on some applications
- simple application processes
- the option to record your preferred or anglicised name on your licence, and
- improved SMS and email updates to you on the progress of an application and reminders about your renewal.
The system will be further enhanced over the next year to provide you with an electronic log to record your experience requirements and completion of CPD topics. We will be collecting information from you about your employer, so these logs can be verified and monitored by your employer.
This additional information will also assist us in delivering a better public register for consumers and improved consumer protections through enhanced monitoring of industry compliance.
The new system will be available through Service NSW and you will receive links and further information about how to connect to your licence information.
How to prepare for the changes
There are a number of things you can do to prepare for commencement of the changes:
- Make sure your licence is current as at 23 March 2020. If your renewal date is around this time, make sure you renew promptly.
- Consider what changes may be made to your business processes. For example, what will be the process for authorising agreements prepared by Assistant Agents? Are there new business processes for trust accounts?
- Check your business cards and promotional material to make sure your job title is accurate.
- Get familiar with the revised Rules of Conduct and Supervision Guidelines (in force from 23 March 2020).
- Register an account with my.service.nsw.gov.au if you don’t already have one.
- Make sure you subscribe to our Property Matters eNewsletter. We will use this eNewsletter to communicate important information about the reforms.
If you have questions not answered here, please contact us on 13 32 20.