Elements of a Valid Appointment to Act Real Estate and Business Agents

This publication is for: 
Property industry

The following is a summary of the requirements under the Real Estate and Business Agents Act 1978 ("the Act"), Real Estate and Business Agents (General) Regulations 1979 and Code of Conduct for Agents and Sales Representatives 2011, which an agent must comply with in order to have a valid appointment to act.  A valid appointment to act enables the agent to receive remuneration and or recover expenses as agreed with the principal for the services provided.

Requirements under the Act

Section 60(1)(a)

An agent must be licensed and the holder of a current triennial certificate.

Section 60(1)(b)

An agent must have a valid appointment to act in writing signed by the person for whom the services are being provided or his lawfully authorised agent.

Section 60(2)(a)

The appointment must be contained in a document

            Broome Real Estate Pty Ltd vs Howard [1999] WADC 73

Section 60(2)(a)(i)

The appointment must clearly set out the services to be rendered, eg Appointment to Sell, Auction, etc.

Section 60(2)(a)(ii)

Where specific property is to be the subject of those services the appointment must clearly identify the property; eg address of property, title details; business etc.

Section 60(2)(a)(iia)

Clearly set out a method by which the amount of remuneration is calculated.

Section 60(2)(c)

The person obtaining the signature of the principal(s) on the appointment must give a true copy of the appointment to the signatories immediately after the appointment is signed.

PENALTY $5,000

Applies to a person who demands or receives any commission, reward or other valuable consideration in contravention of the applicable legislation (s.60(3) of the Act).

Additionally, the State Administrative Tribunal can order repayment of commission, reward or other valuable consideration held in contravention of the Act or Regulations (Section 103(1)(d)).

Requirements under the Regulations

Regulation 6BA(2)

The appointment must contain a statement to the effect that commission charges are not pursuant to any scale fixed by law and are to be agreed upon between the parties. This statement must be placed immediately before any statement outlining the commission charges agreed to.

Regulation 6BA(1)(a)

Where the agreed commission, reward or other valuable consideration is expressed in percentage terms, it must also be expressed in monetary amounts (e.g. 3 percent of $450,000 equals $13,500)

Regulation 6BA(1)(b)(ii)

Where the agreed commission, reward or other valuable consideration to be received for services rendered (i.e. sales, as defined in s.61(4a) of the Act) is expressed as an hourly, weekly or other periodic rate, the maximum sum payable must also be specified in monetary terms (eg $500 per week to the maximum $3,000)

Regulation 6BA(1)(c)

Where the calculation of remuneration is dependant upon the use of certain services (e.g. property management and services) the appointment shall provide an explanation of the charges (eg gross rent, gross collections, letting fee) on which the fee for those services is based.

Regulation 6BA(1)(d)

Where any expenses are to be recovered by the agent, the agent must specify the nature of those expenses and clearly set out the method by which those expenses will be calculated.

Regulation 6BA(3)

The appointment to act must contain a statement in plain language to the effect that clients may seek assistance from the Commissioner if they have a dispute in relation to fees.

Code of Conduct

Articles 19 & 20

Any appointment to act signed by a principal (Seller / Landlord) must provide that any agreed commission, reward, or other valuable consideration, and any advertising or general expenses, be in writing with a maximum amount specified and initialled on the agreement by the principal.

Consumer Protection
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Last updated 10 Oct 2017

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