We regularly see disputes where agents miss out on commission despite their efforts. Many of these cases could have been avoided with clear documentation, careful attention to Form 6 appointments, and ensuring any involvement in the transaction is properly recorded.
Real estate agents work hard to secure sales, but earning commission isn’t always guaranteed. Small mistakes with paperwork, disputes over who was the “effective cause” of sale, or complications with multiple agents and contract terminations can put your commission at risk.
Here are some of the most common traps that agents need to watch out for.
1. Appointment not valid: Form 6 Errors (previously known as Form 22a)
In Queensland, a valid appointment (Form 6) is essential for commission to be payable. The form must clearly set out:
- The commission amount and when it’s payable, and
If percentage-based, that it is calculated on the actual sale price, not an estimate.
Even minor omissions can invalidate the appointment. For example, in Yong Internationals Pty Ltd v Gibbs (2011), the agent lost entitlement to commission because the form was incomplete under the “Performance of service” heading, and the Court found that the agent had never been appointed. Similarly, in Hudson v Stanfield (2013) (the “Honeycomb case”), the agent failed to properly explain the sole agency, and open vs exclusive listing options. The court held the form ineffective, and the agent ultimately walked away empty-handed.
Lesson for agents: Always double-check that Form 6 is completed correctly. Small errors can cost big money.
2. Proving you were the “effective cause” of sale
A valid appointment is only the first step. Agents also need to prove that their actions were the effective cause of the sale. Merely introducing a buyer is rarely enough. Ongoing involvement such as progressing negotiations and keeping the deal alive, is usually required.
Courts consider:
- Was the introduction of the buyer to the seller during the exclusive agency period?
- Did the agent help move negotiations forward?
Were the final sale terms consistent with what the agent arranged?
In Outerbridge v Hall (2019, NSW), one agent introduced the buyer, but another agent closed the deal with a higher purchase price. The second agent crucially intervened in the negotiations and clarified the Seller’s position which ultimately lead to the buyer submitting a higher offer. The first agent missed out on commission, as the Court found they weren’t the effective cause of the sale.
Lesson for agents: Keep detailed records of all your communications and involvement with buyers and remain active in the negotiation stage.
3. Marketing company entitled to commission
Disputes often arise when more than one company contributes to a sale. In Podium Project Marketing v B Global (2024), (2) marketing companies entered into a marketing agreement in the hope of finding prospective buyers for a real estate development project. It was argued by both parties that there were misrepresentations throughout the negotiation and formation of the marketing agreement signed by both parties. Ultimately, the court held that the plaintiff marketing companying was entitled to commission based on the marketing agreement.
Lesson for agents: Be careful when entering into a marketing agreement, as the marketing company may also be entitled to receive commission from the sale.
4. The contract terminates or falls through
Commission can also be at risk if a contract terminates. In Limitless v Smith (2022, QCAT), the buyer terminated under the building and pest condition, and the deposit was refunded. The Court found that the Contract was not ended by mutual agreement, rather the Buyer validly terminated the Contract which the Seller did not contest. As such, the agent’s commission was not triggered under their Form 6.
That said, if the same buyer later purchases the property under new terms, the original agent may still claim commission, provided they were found to be the effective cause of the sale.
Lesson for agents: Always review the Form 6 to see how commission entitlement is worded in the event of contract termination.
Practical solutions to protect your commission
To reduce the risk of disputes, agents should:
- Ensure Form 6 appointments are properly completed and explained.
- Keep written records of all buyer introductions, negotiations, and involvement.
- Clarify arrangements and agreements where multiple agents and/or companies are engaged.
- Seek legal advice if a contract terminates or commission entitlement is uncertain.
Attwood Marshall Lawyers – supporting buyers, sellers and agents through property transactions
Commission disputes can be stressful, time-consuming, and costly. Our Property and Commercial Law team works closely with agents to review contracts and appointments, identify risks early, and protect entitlement to commission.
We also have a specialist litigation department that regularly handles commission disputes in QCAT and the courts. Getting advice early can prevent issues escalating and help you get paid sooner.
If you have questions about protecting your commission or need help with a dispute, please contact our Property and Commercial Department Manager, Jess Kimpton, on direct line 07 5506 8214, email jkimpton@attwoodmarshall.com.au, or call our 24/7 phone line on 1800 621 071.