Real Estate Agents:

A real estate agent may be pursued for a claim of negligence by an individual who believes that the agent has conducted himself in a manner not befitting a colleague in the industry, or discharged his duty in a manner that fails to reach the expected professional standard. The Property Stock and Business Agents Act 2002 (NSW) regulates the business of Real Estate Agents, their obligations, responsibilities and duties under the law. The Act is divided up into various sections each of which address a particular area of concern:

• The requirements for a license or a certificate of registration;
• Eligibility;
• Qualification;
• Disqualification;
• Applications;
• The place of the business;
• The name of the business;
• Employees;
• Conflict of interest;
• Advertising and representations;
• Unjust conduct by licencees;
• Requirements relating to agency agreements;
• Cooling off periods for residential and rural agency agreements;
• Contracts relating to the sale of residential property;
• Bidding and auctions for residential or rural property;
• Representations as to the price of property;
• Auctions;
• Payment of moneys into the trust account;
• Responsibilities of authorised deposit taking financial institutions;
• Trust account transactions;
• The audit of licencee’s records; and
• Account freezing.

Part 9 of the Act concerns itself with the management and receivership of the real estate practice where the business is failing. It is not inconceivable that a member of the public, either while buying or selling property, or even a member of the legal profession who is dealing with a real estate agent in a conveyance, may find himself having to face the complicated situation of that real estate agent falling into management or receivership. It is important that the rights of the client are not forfeit and that his interests are adequately attended to. This is where a real estate lawyer can be of use. Legal advice about a real estate dispute may be sought where an individual believes that his dealings with the real estate agent may have resulted in some loss or damage.

Part 10 of the Act deals with the Compensation Fund. Section 173 of the Act outlines the claims against Compensation Fund in the following terms:

(1)  The Compensation Fund is held, and is to be applied, for the purpose of compensating persons who suffer pecuniary loss because of a failure to account;

(2)  A person who claims to have suffered a pecuniary loss because of a failure to account may make a claim against the Compensation Fund, but only if the claim is made in writing to the Director-General within:

(a)  a period of 12 months after the person has become aware of the failure to account; or

(b)  a period of 2 years after the date of the failure to account,

      whichever period ends first.

(3)  However, a claim caused by a failure of a licensee (or an employee or agent of a licensee) to lodge a rental bond with the Rental Bond Board may also be made at any time within one year after the termination of the tenancy agreement;

(4)  A licensee does not have a claim against the Compensation Fund in respect of a pecuniary loss suffered in connection with the licensee’s business as a licensee because of a failure to account;

(5)  Subject to this section, the Director-General may receive and allow, in whole or in part, any claim against the Compensation Fund at any time after the relevant failure to account arose;

(6)  The Director-General may disallow any claim, in whole or in part, in appropriate cases. In particular the Director-General may disallow a claim to the extent that pecuniary loss was suffered as a result of a failure to mitigate loss or was occasioned by unreasonable delay in making a claim.

Parts 10 through to 14 of the Act continues to outline the processes and principles relating to the “the examination of accounts of licensees and former licensees”, “property services statutory interest account”, “complaints and disciplinary action”, “enforcement”, “offences” and “proceedings.”

Allegations in professional negligence against a real estate agent can take the form of actions in misleading and deceptive conduct or generally under fraudulent representations, or representations without consent on behalf of the vendor. Other claims against a real estate agent can involve disclaimers on sale and the information contained therein, marketing materials and their use and compliance issues connected to the Real Estate Institute.

Professional Indemnity Insurance is taken out by real estate agents however there may be a clause in each policy which asserts exclusions. These are provisions which state that no cover is offered in the event that certain conditions are or are not met. If you are a real estate agent who is getting sued, it may be a good idea to obtain legal advice about your real estate dispute before taking steps in your case. Likewise, if you are an individual who wishes to sue a real estate agent for some loss of damage occasioned due to their conduct, a real estate solicitor will be best suited to provide you with the advice and guidance you will need to prepare your case.

If you need advice and help with a real estate agents negligence dispute, you may wish to contact our firm by telephone on (02) 9233 4048 or email us at info@navado.com.au and make an appointment to see one of our solicitors.

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.