Purpose
This statement of regulatory intent sets out the compliance and enforcement approach of NSW Fair Trading for new regulatory obligations on agents in the Property and Stock Agents Regulation 2022 (the Regulation). The Regulation starts on 1 September 2022.
This statement was approved by the Commissioner for Fair Trading on 26 August 2022.
Background
The Regulation provides legislative support and administrative detail for the operation of the Property and Stock Agents Act 2002, which sets out the regulatory framework for real estate, strata, stock and station agents in NSW.
The Regulation includes provisions relating to professional indemnity insurance, rules of conduct, content of agency agreements, handling of trust money, disclosure, and record keeping.
The new Regulation remakes the Property and Stock Agents Regulation 2014. It is the same as the previous Property and Stock Agents Regulation 2014 except for some minor changes.
Transitional arrangements for licensed agents
Fair Trading will provide licensed agents with a transitional period to 1 March 2023 to adapt their operational requirements to the new regulatory obligations introduced by the Regulation.
The transitional period will apply to the following obligations, which are the new regulatory requirements:
- clarifying that assistant real estate agents restricted to performing business agent or on-site residential property management functions are prohibited from:
- entering into an agency agreement or franchising agreement, or
- authorising the withdrawal of money from a trust account, or
- entering into a contract for the sale of land (s 5(3)),
- requiring vendors’ and buyers’ agents to disclose certain information before a person pays an Expression of Interest (EOI) deposit and preventing those agents from accepting an EOI deposit unless the person has signed a written statement confirming they have received and understood the information (ss 6 and 13 of Schedule 2 and s 4 of Schedule 3),
- requiring vendor agents to refund an EOI deposit within 14 days if another person enters a sales contract (s 6(5)(c) of Schedule 2 and s 4(5)(c) of Schedule 3), and
- requiring strata managing agents to co-operate with an owners corporation or association (of a community land scheme) in transferring management functions where an agent’s contract is terminated and the owners corporation or association has decided to self-manage (s 1 of Schedule 4).
The transitional period will also apply to forms and agreements that need to be updated to comply with changes introduced by the Regulation, including changes to the Regulation date (from 2014 to 2022) and changes to the definition of a buyer’s agent.
Fair Trading's enforcement approach from 1 September 2022 to 1 March 2023
From 1 September 2022 to 1 March 2023, Fair Trading will take an educative approach to compliance and enforcement, aimed at assisting agents to understand and comply with the new regulatory obligations listed above. This means that, during this period, Fair Trading will not penalise agents that have been identified as failing to comply with the new regulatory obligations.
However, Fair Trading expects agents and businesses who are made aware of their new obligations to take appropriate steps to comply with them.
Fair Trading reserves the right to vary its approach as appropriate to the circumstances, particularly in cases that may involve a significant risk of harm or consumer detriment.
Fair Trading will continue to take enforcement action against other regulatory obligations in the Regulation.
More information
More information about the changes introduced by the new Regulation, can be found on the NSW Fair Trading website.