Property Agents and Motor Dealers Act 2000 (PAMDA) Repealed
Sweeping legislative reforms have recently been introduced by the Queensland government to reduce red tape. In this podcast, Emma Heuston from Attwood Marshall Lawyers discusses the new legislation and specifically its impact.
The Property Agents and Motor Dealers Act 2000 (PAMDA) is set to be repealed. On 6 May 2014 the Queensland Government passed the Property Occupations Bill 2013 (POB). The commencement date for the POB is yet to be announced but it is expected to be later this year.
What is the Property Occupations Bill (POB)? The POB is one of four Bills into which PAMDA is to be ultimately split and will have major implications with regard to the sale process of residential property and licensing of agents. In summary, the aim of the POB is to simplify and reduce the level of regulation that PAMDA currently imposes on the Queensland property industry and streamline compliance.
How do the changes impact on Sellers and Buyers?
1. Amendments to contract and prescribed forms The process for entering into residential real estate contracts under PAMDA is complex. Failure to comply with this strict process can result in the buyer being given termination rights under the contract. The POB attempts to remedy this situation and repeals the need for the existing “warning statement” (Form 30C) and the BCCM Information Sheet (Form 14) and replaces it with a requirement to insert, immediately above where the buyer signs the contract, particular nominated words. If the required words are not used, the buyer does not have a right to terminate the contract. However, the seller (or the seller’s agents) commits an offence and is liable for a penalty of up to $22,000.
2. Auction changes Under PAMDA, the cooling off provisions did not apply to properties sold by auction. Under the POB that exemption will be extended to include a contract entered into with a registered bidder of an auction no later than 5pm on the second clear business day after the property is passed in at auction.
3. Changes to the cooling off period Under the POB the cooling off period can be waived or shortened by a buyer giving notice to the seller (without the need for a lawyer to give the notice). Buyers will also be able to terminate the contract under the cooling off period without having to specify the section under which the contract is being terminated, or date the notice.
How do the changes impact on Real Estate Agents?
Definition of Residential Property The definition of ‘’Residential Property’’ has been shortened to refer to property that is used or intended to be used for residential purposes.
Consolidation of licence categories The 9 categories of licence and 4 categories of registered employees under the PAMDA will be consolidated into 3 licence categories (real estate agents, auctioneers and resident letting agents) and only 1 category of registered employees.
Property developers licences The POB removes the requirement for property developers and their employees to be licensed. However, property developers must still provide certain disclosure information in an approved form.
The cap on commission to be abolished The cap on the charging of real estate agents’ commission is to be removed.
Agents commission allowed despite beneficial interest The requirement under PAMDA for agents to disclose all beneficial interests to the seller will remain. However the POB will allow an agent to obtain a commission when the seller has acknowledged and agreed to the agent’s beneficial interest in the transaction.
Agent’s disclosure to buyer Agents will no longer have to disclose to a buyer the amount of commission the agent will receive from the seller. This arrangement will remain confidential between the seller and the agent.
Exemptions for sophisticated parties (residential property) The residential property sales requirements (such as cooling off periods) will not apply where the buyer is:
- a publicly listed corporation or a subsidiary of a publicly listed corporation;
- the State or a statutory body; or
- the buyer is purchasing at least 3 lots at the same time, whether or not in the same contract.
The POB also prescribes a definition of a sophisticated party in a non-residential property transaction.
Residential letting agents The POB will allow residential letting agents to manage more than one building complex and also remove the requirement that they reside on-site.
What’s Next? Until an enactment date for the POB is known, PAMDA will continue to apply. However once the POB commences the following must be addressed:
- Residential contracts must be updated to include the prescribed words above where the buyer signs the contract and the Form 30C and Form 14 are to be removed;
- Commission with respect to residential sales can be freely negotiated (with no maximum amount); and
- Consideration will need to be given on a transaction by transaction basis as to whether the property is residential property (unless the sophisticated parties exemption applies) and whether POB applies.
If you have a Property and Commercial enquiry, contact our Department Manager Holly Gilholme on 1800 621 071 or firstname.lastname@example.org. We also offer free no obligation conveyancing quotes via our website or by phone.