LEGISLATION CHANGES & UPDATEs
Price offer requirement change
Legislation re-introduced via the PSBA Act in August 2016 requires a listing price be included in a private treaty agency agreement. You can no longer include “TBA, By Negotiation or Offers Over “– you must put an actual figure or range. This is the price at which the property is to be offered.
Schedule 8 Terms specific to agency agreement for sale of residential property
(5) If the agreement provides for the property to be offered for sale by private treaty, the agreement must specify the price at which the property is to be offered.
Why did the laws change?
Prospective home buyers had raised concerns about the cost of obtaining pre-purchase property inspection reports for several years. The Government amended the laws to help prospective buyers access information about key reports. This will enable a prospective buyer to contact the author of a report, if they wish to ask about obtaining a copy. The amended laws take into account the growing trend of businesses using online services to make key pre-purchase property inspection reports available at a lower cost than would otherwise be possible.
Commercial property work exemption
IPART recommended that the NSW Government should exempt commercial property agents who sell or manage property for a related corporate entity or a large commercial property owner from the requirements of the Act. This exemption was proposed in its Report on Reforming Licensing in NSW, which was publicly released in August 2015. The NSW Government accepted this and all other recommendations in the report. The clause 46A amendment in the 2016 Regulation gives effect to this Government decision.
Reinstatement of price offer requirement
An agency agreement for the sale of a residential property by private treaty must now state the price at which the property is to be offered for sale. When new underquoting laws were introduced, the previous requirement was removed as it was considered unnecessary. However, industry stakeholders asked for this requirement to be brought back. This was to clarify the offer price for the seller and agent, and may help prevent under quoting. This ‘price offer’ information may also be useful when NSW Fair Trading investigates claims of under quoting.
Keeping a REPORTS REGISTER for all Building, Strata & Pest Reports
Legislation introduced via the PSBA Act in August 2016 now requires a register to be kept for any completed Building, Strata or Pest Reports. You don’t need to send the report – just a register showing what reports you are aware have been done – i.e. because you have provided access. The agent is responsible for sending a copy of the register to anyone who has been given or requests a copy of the contract. What should the Report Register include?
• The date Inspection took place and who the inspection done for client - purchaser or Agent
• Name of company, business address and phone number of the person who prepared the report
• Is the report available for re-purchase or not
• If the report author has PI insurance
Contact RMC for a sample Report Register.
Authority to Exchange Contracts
Section 64 of the PSBA Act requires agents (including the Auctioneer if acting as the Agent as well) to have the written permission of the vendor and purchaser when they are participating in the exchange of contracts. Note this includes auction sales as well!
This is to protect you in case of any litigation in the event that you made an error when conducting the “exchange of contracts”. RMC has FREE client templates for both Private Treaty and Auctions- contact RMC for your copy.
Managing Offers Effectively. PSBA Act - Rules of Conduct
All offers must be in writing at some point – while they can initially come verbally or via email, we don’t recommend accepting TEXT MESSAGE offers. There are only TWO reasons that you don’t need to pass an offer onto the Vendor;
1) If you have written instructions from the vendor
2) If you tell the purchaser in writing that you are not putting forward their offer to the vendor.
Some agents get their vendors to sign a letter saying no more offers are going to be accepted a week out from Auction – this doesn’t stop you chatting to the vendor about your buyer feedback –and the vendor can change his mind at any time but remember – once a vendor rejects an offer – you cannot quote less than that figure as it becomes your new Estimated Selling Price.