At DW Fox Tucker Lawyers, we work closely with South Australia’s real estate sector and understand the challenges agents face at every stage of their careers, including those just starting.
Real estate is a highly regulated industry. While some professions may need to navigate one or two key pieces of legislation, real estate agents need to have a working understanding of a much broader legal framework.
Some of the key legislation includes:
- Land Agents Act 1994;
- Real Property Act 1886;
- Law of Property Act 1936;
- Land and Business (Sale and Conveyancing) Act 1994;
- Strata Titles Act 1988;
- Community Titles Act 1996;
- Residential Tenancies Act 1995;
- Retail and Commercial Leases Act 1995;
- Planning, Development and Infrastructure Act 2016,
And, of course, there is the longstanding Fences Act 1975.
Together, these laws establish the framework governing the sale, leasing and development of land in South Australia. They cover many of the day-to-day matters real estate agents deal with, including contracts, deposits, Form 1s, cooling-off rights and evictions.
Importantly, they also impose a range of obligations and prohibitions, with significant penalties for non-compliance.
Key risks to be aware of
The Land and Business (Sale and Conveyancing) Act 1994 contains many provisions that are particularly relevant to real estate agents. As a general rundown, here are some of the key prohibitions all real estate agents must be aware of:
- Profit representations: You must not represent that a purchaser will make a profit from subdivided land.
- Undue influence: A contract for the purchase of subdivided land may be void where the purchaser has been unduly persuaded, influenced or induced to enter into the transaction.
- False or misleading representations: Making a false or misleading representation with the intention of inducing someone to buy or sell land, or to engage you as an agent, can result in a penalty of up to $20,000 or one year’s imprisonment.
- Recording offers: Agents must record all offers and provide them to the vendor within 48 hours. Failure to do so can attract a penalty of up to $5,000.
- Competing offers: If you advise a prospective purchaser that a competing offer has been received, you cannot disclose the amount or terms of that offer. You must also provide the purchaser with a notice confirming the existence of the competing offer if requested.
- Advertising prices: An agent must not advertise a likely selling price for residential land that is lower than the price specified in the sale agency agreement, or more than 10% higher than that amount. Breaching this requirement can result in a penalty of up to $20,000 or one year’s imprisonment.
- Passing on expenses: While agents can receive payment for services provided to clients, amounts charged to a client for expenses incurred on their behalf must generally be limited to the actual expense. Breaching this requirement can attract a penalty of up to $20,000.
- Acting for both parties: An agent must not act for both the buyer and seller without obtaining the consent of both parties.
What happens if you make a mistake?
Importantly, for many of these provisions, there is a potential defence where an agent can establish that the relevant conduct was not intentional or reckless. However, this defence does not apply in the case of breaches relating to Form 1s and cooling-off rights
The consequences of getting things wrong can therefore be significant. For agents, understanding your legal obligations is not simply a matter of compliance - it can also help protect your licence, your business and your relationships with clients.
How can we help?
The regulatory framework applying to real estate can be complex, particularly when a transaction involves unusual circumstances or potential disputes.
If you would like advice on the laws that apply to real estate agents, assistance with a complex property matter or dispute, or support with conveyancing, leases, or other dealings with land, the team at DW Fox Tucker Lawyers can assist.
Our property team works alongside our specialists in construction, tax, intellectual property, insurance and other related areas to provide practical legal advice across the property lifecycle.
