Changes to the Property and Stock Agents Act 2002 (the Act) that started on 23 March 2020 aimed to raise the level of professionalism of all property agents.
Agents need to demonstrate their competency before they are issued a licence or certificate.
Agents must also undertake continuing professional development each year to make sure they remain up to date and competent in the skills and knowledge needed to do their jobs.
To support this approach to competency and professionalism, the comprehensive set of rules of conduct under the Property and Stock Agents Regulation 2014 (the Regulation) has been enhanced.
These rules provide agents with specific guidance on the professional and ethical standards to which the public expects them to adhere.
There are 22 core rules which apply to all licence and certificate holders, and additional specific rules which apply to the various categories of agency work.
The rules of conduct can be found in Schedules 1-3 and 6 of the Regulation as follows:
- All licence and certificate of registration holders Schedule 1
- Real estate agents and assistant real estate agents Schedule 2
- Stock and station agents and assistant stock and station agents Schedule 3
- Strata managing agents and assistant strata managing agents Schedule 6
In addition to complying with the rules of conduct, agents and assistant agents may have to comply with other laws in relation to their conduct and in carrying out their functions.
For example, strata managing agents have obligations under the Strata Schemes Management Act 2015. Further information about strata schemes and their management can be found here. [link to strata schemes section of FT website].
Payment of rental income monthly to landlord
An agent must pay rental money received on behalf of the landlord under a residential tenancy agreement to the landlord at the end of each month, unless the landlord has instructed the agent in writing to do otherwise.
This ensures that any rent owing is passed on in a timely manner and landlords are aware if there has been a failure to account for their rental income.
Gifts and benefits generally prohibited where there could be a conflict of interest
Section 53F of the Property and Stock Agents Act establishes a general prohibition on agents receiving or requesting gifts or benefits for themselves or for another person in circumstances that could reasonably be considered to give rise to a conflict of interest.
However, this does not apply to:
- anything provided by the agent’s employer
- anything provided as part of an agency agreement or as a gift of thanks from a client for services provided under the agency agreement, or
- anything of less than $60 in value — which is the same level as the dollar limit under the reforms to the laws governing strata managing agents that commenced in 2016.
The new Supervision Guidelines also require principal licensees to maintain a register of gifts and benefits received by agents employed in the agency.
Separate trust accounts for rental and sales money
The licensee in charge of the business will need to establish a different general trust account for rental money and sales money. Rent and sales deposits must not be kept in the same general trust account.
Many businesses already maintain separate trust accounts for rental income and sales deposits; this new rule mandates it for everyone.
This requirement aims to improves the accountability and transparency of agents by ensuring they do not mix rental and sales money in a single trust account.