Additionally, there is an exemption included for an agent when carrying out certain commercial activities. The law, which is being made under the Property, Stock and Business Agents Act 2002, was originally set to begin in July.
The final Regulation includes some changes, which were not included initially, and the main changes are included in Clause 33A.
Which inspections and certificates need to be kept by agents?
Clause 33A(1) says a licensee acting on behalf of a person on the sale of a residential property must make a written record of any report they are aware of.
This includes:
- a building inspection
- an inspection to detect if it has been affected by termites or other pests
- an inspection of documents relating to the property under section 108 of the Strata Schemes Management Act 1996
- a certificate as to financial matters under section 109 of the Strata Schemes Management Act 1996
- an inspection of documents relating to the property under section 26 of the Community Land Management Act 1989.
What must the record contain?
Clause 33A(3) sets out what the record of a report must contain. This includes:
- the date on which the property or documents were inspected
- whether the person who requested the report to be prepared is the client, a prospective purchaser of the property or the licensee
- the name, business address and telephone number of the person who prepared the report
- whether the report is or is not available for repurchase by any person requesting a copy of the contract for the sale of the property
- whether the person who prepared the report is insured under a policy of professional indemnity insurance.
However a licensee is not required to make a record of any particulars referred to above that are not known to or cannot be reasonably obtained by the licensee.
Who is exempt?
Clause 46A sets out that real estate agents are exempt from the law when undertaking commercial property agency work on behalf of:
- an affiliate of the agent
- an entity that owns (whether or not together with an affiliate of the entity) any property that has: an aggregate market value of $40 million or more, or an aggregate gross floor area of 20,000 square metres or more.
REINSW understands that NSW Fair Trading will be advising stakeholders about the final Regulation which will be published on the NSW legislation website soon.
It is also expected that there will be more information and guidance on the new requirements on the Fair Trading website shortly.
For more information, download a copy of latest Regulation here.
REINSW’s lobbying efforts
REINSW made a submission in June 2016 in response to the public consultation.