Attwood Marshall Lawyers Property and Commercial Lawyer Aimee Turner explains the importance of ensuring you are validly appointed to act on behalf of a client in the sale of a property and the common errors to avoid when completing a Property Occupations Form 6 (Form 6).
Introduction
The Property Occupations Act 2014 (The Act) states that a property agent is not permitted to act as an agent on behalf of a client in the absence of a valid appointment in the approved form. If you fail to complete a Form 6 correctly, or it’s incomplete, you may not be properly appointed to act, which ultimately could result in a loss of entitlement to commission.
The completion of a Form 6 requires much attention to detail and often there are critical parts that are left blank or incorrectly completed. Section 104 of the Property Occupations Act 2014 prescribes various items that must be included in a Form 6, which are outlined further below.
In 2018, an agent’s application to QCAT to claim commission was dismissed due to the agent not being considered the ‘effective cause’ of the sale. The agent had been appointed to act in the sale of a property on an exclusive basis. The client entered a conditional contract, which later terminated and so did the agent’s appointment with the client. The client appointed a second independent agent to act on an exclusive basis. Following this, the same buyer that previously terminated their contract entered a new contract to purchase the property, which successfully settled. The first agent then attempted to claim that they were the effective cause of the sale and accordingly attempted to claim commission. The first agent was unsuccessful in this claim as there was insufficient evidence to prove the first agent’s efforts resulted in the sale.
Considering the above and other recent cases, we remind you to review the requirements of completing a valid Form 6; ensure you are using the current version of the Form 6; and obtain advice from an experienced property lawyer if you have any concerns.
What is required to construct a valid Form 6?
A Form 6 should outline various aspects of the appointment, including but not limited to:-
- Whether the appointment is a single or continuing appointment
- The type of services the agent will be providing
- Any conditions linked to the services being provided
- The start and end dates of the appointment
- Fees, charges, and any commission payable for the service and when they are payable
- Any authorised expenses, including advertising and marketing costs payable by the client
- A statement advising the client to obtain legal advice prior to signing the Form 6
- The basis upon which an agent is being appointed (i.e. sole or exclusive)
- Disclosure of any further financial benefit the agent will receive from a third party
Common mistakes
Some oversights that occur when completing a Form 6 include:
- Inadequately stating when commission is payable
- Failing to tick what services an agent is appointed to perform
- Noting the incorrect commission amount
- Failing to establish the term of the appointment
- Incorrectly stating the entity or trading name of the agent including licensee name, ABN number, and licence number
- Misappropriately stating the property description
The result of oversights on a Form 6 may seem minor on the face of it but these oversights will have major impacts on an agent’s entitlement to commission. Without a valid Form 6, no valid appointment exists and therefore an agent has no basis to rely upon when attempting to claim commission.
NSW listing agreements
Although the process and documents required to list a property for sale in NSW are completely different to QLD, the principles are the same. Your listing agreement with the seller must be properly completed, dated, and signed for this agreement to be enforceable and to recover your commission. We will provide a separate article on NSW listing agreements in next month’s newsletter.
Attwood Marshall Lawyers – supporting real estate agents and their clients
All real estate agents must take the time to ensure a Form 6 has been correctly completed and that it complies with legislative requirements. A simple oversight can be extremely costly!
Attwood Marshall Lawyers Property and Commercial team have comprehensive experience in helping real estate agents across various matters, including issues that arise from disputes about the Form 6 appointment.
Our lawyers can ensure that agreements between buyers, sellers and their agents are binding, include all the required terms and conditions, and are tailored to suit individual circumstances.
Attwood Marshall Lawyers are a leading law firm in property law and conveyancing, and we are proud to have helped people achieve their property goals for over 75 years.
We practise in both Queensland and New South Wales districts and can facilitate electronic settlements using PEXA. If you need advice, please contact our Property and Commercial Department Manager Jess Kimpton on 07 5506 8214 or email jkimpton@attwoodmarshall.com.au today.
If you are involved in a dispute over a contract of sale, Form 6 Appointment, or an issue related to your commission, we have a Commercial Litigation and Dispute Resolution team who are well versed in handling matters of such nature and practice exclusively in this area. For advice, please don’t hesitate to contact our Commercial Litigation Department Manager, Amanda Heather, on direct line 07 5506 8245, email aheather@attwoodmarshall.com.au or free call 1800 621 071 to find out where you stand.
We are driven to make the settlement process as simple as possible, taking the stress out of the equation and ensuring all parties understand their rights and responsibilities when buying and selling property.
