Agents in real estate will have to abide by new laws with a number of changes affecting NSW real estate licence holders as of 23 March 2020.
The amendments tighten up what an agent is allowed to take responsibility for as well making training periods mandatory for better qualifications and experience programs. On the business side, the number of licensees per business has opened up meaning that there is more flexibility for real estate businesses to cover all the bases and have adequate staff across multiple sites.
What that means for everyone else. You’ll need to pay close attention to what skills and qualifications your representing agent has. Ask to see their licence as this will detail what level of licence they have: assistant agent, Class 2 or Class 1. It will also detail any restrictions they have and what side of the business they can represent you on. As of March 23rd the different titles around real estate licences will be abolished (i.e. real estate agent, business agent and on-site residential property manager) and every agent who works in the industry will receive a licence in real estate. This licence will then detail restrictions that will appoint that agent to work in their area of previous skill and training. So using the above example, an on-site residential property manager will carry a real estate licence and will be restricted to on-site residential practice.
Only a Class 1 license holder in charge of business are able to authorise money to be withdrawn from a trust account.
An assistant agent must work in this position for four years and complete the necessary qualifications, field work and experience before they are allowed to graduate to a class 2 licence. A Class two agent must hold this position for two years before having enough experience, qualifications and training to progress to Class 1.
From 23 March 2020 onwards all licenced agents must disclose specific material facts.
While it was already a legal stipulation that an agent must reveal material facts before a person enters into an arrangement or contract, the new laws go into this in more detail and provides specifications around what these material facts are exactly.
Here is a list of the items an agent must know (or make serious attempts to know) and disclose to perspective buyers during a home sale.
• Natural disaster. If the local area was affected by bushfire or flooding (natural causes) in the last five years
• Grizzly scene. Did a murder, crime or manslaughter incident take place here within the past five years
• Significant safety risks or health issues
• Asbestos. The property is listed on the loose-fill asbestos insulation register
• Drug supply. In the last two years the property was used for the supply or production or prohibited drugs or plants.
• External combustible cladding**
** in these cases the building will need to be safety checked and repairs made, or orders made that show rectification has been lodged.
If an agent fails to provide information on these material facts, they will be held accountable, even if there was no deliberate attempt to conceal them. It’s an agent’s job to know about the home’s history and provide an accurate account of the home’s safety to potential buyers.
As part of the 23 March 2020 law updates regulations have been introduced which extend the rules of conduct. These apply to both agents and assistant agents.
Rent must be passed on to the landlord a in a timely manner. Payments must be passed from agent to landlord at the end of the month (unless there is written permission from the landlord covering another agreement).
Due to possible conflict of interest, an Agent cannot accept a gift that exceeds $60 in value.
For transparency and accountability, a class 1 licensed agent in charge of the business must make sure there are separate trust accounts for rental income and sales income.
Before you decide on an agent to sell your home it pays to have a genuine sit-down discussion about who they are and what their level of experience is. Getting to know the lead real estate agent representing the home you want to buy is a bonus, especially if the property is going to auction.
With property sales going haywire in Australia through 2021 and prices soaring to record-breaking highs, it’s important to know where you stand on price and how much flexibility you have to negotiate. Knowing where you stand means you won’t overpay, which is especially important in a hot market where panic can set in.
This is our final post in this particular series. In this blog, we are focusing on the highs and lows, so you know what you're getting yourself into. This information does refer to some facts from the previous two posts, so get back and read our Renovation planning guide and the types of renovations to get up to speed on how all these ties together.
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