Supervision guidelines

Licensees who run a business have a legal obligation to ensure the proper supervision of their business.

New Supervision Guidelines start July 1 2024

Key changes

The new guidelines include key changes from previous years. The changes include:

  1. An introduction from the Strata and Property Services Commissioner setting out what to expect from the new Supervision Guidelines, and the overarching goal to improve professional standards in the industry.
  2. All three overarching requirements for supervision set out in the Property and Stock Agents Act are now addressed including supervision of persons engaged in the business, operational procedures for legal compliance, and monitoring of conduct within the business.
  3. Both guidance for principals and licensees in charge and specific requirements that must be met are included: Guidance tells you what you should do to maintain a well-supervised business; while failure to meet the requirements is an offence that may be penalised or prosecuted.
  4. The specific requirements in the current Supervision Guidelines are either maintained or enhanced, with a few minor exceptions, including: a minor change has been made to the requirements on price representations and underquoting. Now, timely reviews of estimated selling prices must be carried out, instead of the previous requirement that reviews must be carried out every week, regardless of the circumstances of each property.

New requirements in each section of the guidelines

Supervision Requirement 1: People leadership

Licensees in charge must assist assistant agents and class 2 agents by verifying completion of their work experience tasks in the Fair Trading logbook.

Supervision Requirement 2: Operational procedures for legal compliance

Operational procedures must:

  • exist separately to the Supervision Guidelines and be specific to the business or group of businesses to which they apply
    identify the laws that apply to the business using a comprehensive list in the Guidelines as a starting point
  • address four key areas of risk to compliance, including financial, licensing, qualifications and training, and professional conduct
  • document the licenced roles within the business and who is performing them, along with their status as certificate of registration holder, class 2 agent, class 1 agent, licensee in charge, and/or accredited auctioneer
  • for qualifications, education and training, the annual training plan currently required to include records of non-compliance with CPD and a plan for training in legislation changes throughout the year, and
  • for professional conduct, compliance with conflict of interest disclosure obligations, compliance with reporting obligations under the Privacy Act and use of third-party platforms.

Supervision Requirement 3: Monitoring business conduct

  • Principals and licensees in charge must establish adequate systems to monitor the conduct of the business to ensure that the requirements of the operational procedures are complied with, and
  • licensees in charge must record instances of non-compliance with the operational procedures and any corrective action taken.

Why supervision matters in property and stock agencies

It is vital that businesses are properly supervised, particularly as large sums of money and trust accounts may be involved.

Poor supervision can cause distress and financial loss for consumers.

It can also lead to claims of negligence, misleading conduct and fraudulent use of trust money — for which substantial maximum penalties apply.

Licensees who run a business must ensure proper supervision in accordance with the Secretary’s Guidelines for the Proper Supervision of the Business of a Licensee (the supervision guidelines).

The supervision guidelines set out the requirements for proper supervision of a business, including the steps they must take to prevent fraud, underquoting and misrepresentation.

These requirements include:

  • 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 employees’ conduct to ensure that those procedures are being followed.

Corporations or individuals who run a business under a Class 2 licence need to employ a Class 1 licence holder to be the licensee in charge (LIC) of their business.

Visit the licensee in charge page for more information about the requirements relating to LICs.

Failure to comply with the Supervision Guidelines carries a penalty of up to 200 penalty units ($22,000) for a corporation or 100 penalty units ($11,000) in any other case.

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