Update to Estate Agents Regulations

Date: 18 May 18

The REIV have received advice from Consumer Affairs Victoria regarding changes to the Estate Agents Regulations. Members are encouraged to review the information provided.

Estate Agents (General, Accounts and Audit) Regulations 2018

The Estate Agents (General, Accounts and Audit) Regulations 2018, passed on 1 May, will affect the sale of business requirements. 
These Regulations prescribe certain matters relating to trust account, audit, notifications and documentation requirements, and introduce offences and penalties necessary for the operation of the Estate Agent Act 1980 (the Act).
Different from the drafts previously released for consultations, the primary differences relate to the Section 52 Statement. The Section 52 Statement has been updated to:

- provide for up-to-date financial information to be provided, but with a cut-off of the end of the last quarter, so as to avoid imposing unduly onerous requirements on vendors, and
- ensure that the wording of the accountant’s declaration did not conflict with the professional obligations of auditors, and
- adjust the threshold for the definition of ‘small business’ to $450,000

Additionally, the definition of ‘small business’ has been provided for in the main body of the Regulations.

Other changes include:

- technical changes to reporting requirements to clarify matters which had caused confusion, such as whether statements should be prepared ‘at’ or ‘for’ the end of each month;
- updates to infringement offenses;
- new infringement offences in relation to section 59(1)(a), (b) and (c) of the Act, which relate to obligations in depositing, transferring and withdrawing trust money, and in relation to section 63(1)9a), (b), (c) and (d) of the Act, which relate to agents’ continuing obligations to keep accurate, balanced accounts, and 
- New infringement offences in relation to regulations 12(2), 26(3) and 26(4), which impose obligations on agents to notify the Director of Consumer Affairs Victoria when they become aware of a deficiency in the trust accounts, to verify that monthly trust reconciliations are accurate, and to keep reconciliation statements.

 
Estate Agents (Professional Conduct) Regulations 2018

Effective from 26 May 2018, the Estate Agents (Professional Conduct) Regulations 2018 will replace the current Regulations, Estate Agents (Professional Conduct) Regulations 2008. 

Whilst the new Regulations are substantially unchanged, a number of amendments have been made in response to stakeholder feedback and to simplify their structure and modernise the drafting. New obligations for estate agents and agents’ representatives introduced include to:

- act in good faith
- act with timeliness and courteousness
- not mislead a tenant about a landlord’s instructions
- not mislead a purchaser or prospective purchaser about a seller’s instructions
- inform an offeror where an offer will not be submitted to the principal 
- respond and attend to requests by a tenant for maintenance or repairs to a property
- notify the tenant of a landlord’s response or otherwise to a tenant’s request for maintenance or repairs
- inform the landlord if a landlord’s failure to carry out maintenance or repairs would constitute a breach of the tenancy agreement or the Residential Tenancies Act 1997
- where acting for a purchaser as a buyer’s agent, keep the purchaser informed of each stage of the negotiation of a purchase price
- have in place written dispute resolution procedures containing prescribed details, and
- advise a person of the dispute resolution procedures before or as soon as possible after obtaining a tenancy agreement, engagement or appointment.

Members should contact the REIV for any further information.