Property agents' responsibilities have changed under the Property, Stock and Business Agents Regulation 2014 (NSW), which commenced on 1 September 2014. The new 2014 Regulation continues to outline the rules for agents' ethical and professional conduct.
REINSW CEO Tim McKibbin said the PSBA Regulation review was long overdue.
“The last Property, Stock and Business Agents Regulation update dates back to 2003, so it was Regulation severely outdated,” Mr McKibbin said.
“The previous Regulation did not allow for agents to use contemporary technology in order to transact property and it needed to be amended so that it is relevant to the way business is now conducted.
“The amended Regulation is moving in the right direction, however we would have liked to see additional technological advancements recognised."
Deregulation of certain large commercial agents scrapped
REINSW was successful in lobbying the Government to not proceed with the proposed deregulation of certain large commercial property agents and transactions. REINSW believes that the exemption of those agents and transactions from compliance with the Property, Stock and Business Agents Act 2002 (NSW) was being fast-tracked, and accordingly did not adhere to the prescribed review process.
REINSW was concerned that delicensing any class of agent would erode the consumer confidence and security that exists in the current regulatory environment and would tarnish the integrity and reputation of the real estate profession, industry and market.
Thankfully the Government listened to REINSW and the proposed exemptions were not included in the 2014 Regulation.
What has changed?
Changes were made to update the 2003 Regulation, particularly with respect to modern technology, to rectify convoluted, redundant and repetitious provisions, and to achieve the objectives of the Act. More specifically, some of the changes include:
Provisions have been included in the 2014 Regulation to enable agency agreements to be served electronically on a person and a body corporate if an email address is provided for service.
In addition, clause 5 of the 2014 Regulation (formerly, clause 9 of the 2003 Regulation) has been amended to allow an itemised account to be requested and served electronically via the email address specified in correspondence or otherwise (for instance, in the agency agreement).
These changes were made to account for the modern use of technology as a means of communication.
With the inclusion of modern technology-based clauses in the 2014 Regulation, clarification around backing-up and storing files has been outlined.
If the licensee is holding trust account information on a computer system, the licensee must ensure that either all records are backed-up as previously required or that records are backed up using cloud technology no less than once a month.
Agents will need to use a unique identifying number issued by NSW Fair Trading for all general trust accounts.
On and from 1 January 2015, all licensees opening a trust account must apply to the Office of Finance & Services for a unique identifying number. Licensees must then provide that number to the bank at the time of making the application to open the account.
Licensees who already maintain a trust account as at 31 December 2014 have until 30 June 2015 to provide their bank with a unique identifying number.
The introduction of the number is to ensure that banks are accountable for interest paid into the Statutory Interest Account and to safeguard consumer funds.
REINSW is concerned that the Government has provided very limited information about the process involved in obtaining a unique identification number, the timeframes involved and the practicality for the agents to apply to NSW Fair Trading and be given a unique identification number.
For more information visit, NSW Fair Trading trust accounts page >>>
Clause 31 of the 2014 Regulation deals with signing cheques and effecting electronic funds transfers for trust accounts (formerly, clause 33 in the 2003 Regulation). The clause allows the licensee-in-charge, who has authority to sign trust cheques or effect trust EFTs, to delegate that authority.
That delegation can now be made if the licensee-in-charge cannot sign the cheque or effect the transfer for any reason. Previously, it could only be made if the licensee-in-charge was sick, injured or absent for good reason.
If an agency agreement includes a term that a commission is payable even if the sale is not completed, the agency agreement must now include the following warning located immediately after that term:
WARNING: A commission is payable under this agreement even if the sale of the property is not completed.
The reason for this change is so that vendors are warned that a commission is payable even if they pull out of the sale.
Delivery of information to executive committee
Clause 36 in the 2014 Regulation (formerly, clause 38 in the 2003 Regulation) has been extended to apply to both body corporates and associations so that the Regulation deals with associations serving managing agents with a notice of resolution requiring them to provide specific information.