Agents Gateway
Appointment Of Real Estate Agent
The Property Agents and Motor Dealers Act (“PAMDA”) sets out some very strict requirements as to how the appropriate PAMD forms are to be completed, to ensure an effective appointment to act as a real estate agent is achieved. It is very important that real estate agents and consumers who appoint them, understand, that if an appointment of a real estate agent has not been completed in accordance with the requirements of the PAMDA, and the appropriate disclosures and explanations have not been provided by a Real Estate Agent, the appointment can be ineffective and the Real Estate Agent will not be entitled to be paid commission for the sale of a property.
A Real Estate Agent cannot sell property unless they are first appointed in writing in the appropriate form. The government releases from time to time these appropriate forms including the PAMD Form 22A.
Tips to Complete an Effective PAMDA Form 22A
- Part 1 - Make sure that the client details are inserted correctly as being the registered owner of the land. If the person appointing is not the registered owner of the land, immediate legal advice should be obtained. It should also be noted that the Form requires this part to actually be completed by the client.
- Part 2 – Agent Details.
It is very important that these details are outlined correctly as it is only the listed agent that will be entitled to claim commission.
- Part 3 -Property Details
Again it is essential that the property details are completed correctly. It is recommended that a Title Search be conducted to ensure that all details are listed correctly, and that the actual land referred to is being sold. An agent will not be entitled to commission if the wrong property details are inserted.
- Part 4.1 -
It is essential that part 4 of the form is completed in relation to the appointment. In a recent QLD Supreme Court decision an agent was denied its commission as it had not completed part 4.1.1 relating to the performance of the service. If this is left blank there will be no entitlement to commission.
It is also very important to complete sections 4.2 and 4.3 relating to the reserve/listing price and whether the employment is a continuing or single appointment.
- Part 5 -
Open listing, Sole Agency or Exclusive Agency
It is a requirement under the PAMDA that before an appointment to act is signed the real estate agent must specifically bring to their clients notice the information about the effect of an open listing, exclusive agency and a sole agency, and the difference between Sole Agency and exclusive agency.
If the appointment is for a Sole Agency or Exclusive Agency the agent must bring to the clients notice the information in the form of appointment about:
(a) The proposed term of the appointment;
(b) If the appointment is for residential property, the client is entitiled to negotiate the term of the appointment up to maximum of 60 days;
(c) The difference between sole agency and exclusive agency;
(d) The consequencence for the client if the property is sold by someone other than the agent during the term of the appointment.
If this information is not provided to the client the appointment is ineffective and the agent will not be entitled to any commission. Also the agent will have committed an offence under the PAMDA.
If the appointment is for a sole/exclusive agency, the agent must complete part 5.1 dealing with the continuation of the appointment after the expiry of the appropriate period .
- Assignment Clause –
The client must be notified that they can either agree or disagree with the agent being able to assign its rights under the agreement to another real estate agent. If the client agrees the agent can sign the appointment to act to another real estate agent without changing the terms of the appointment.
- Part 7 – Commission
It is essential that the commission is expressed in both a dollar amount ($) and a percentage amount (%). If this des not occur the agent will not be entitled to commission.
The form clearly outlines to the client that the commission payable is worked out as the percentage expressed, but only on the actual sale price. In relation to the dollar amount the reserve or listing price should be used to express how commission is calculated if the property sells for that amount.
- Part 8 – Fees and Charges
It is very important that all amounts payable, and when they are payable, are accurately listed in the form. Some pre-printed forms have terms and conditions that are attached to them. Reference must be made to those terms and conditions if they are to apply.
- Part 9 – Expenses
If this part is not completed correctly the agent will not be entitled to recover expenses incurred by the client. It may be necessary to attach a marketing schedule outlining the description of the expenses that have been authorised by the client.
It is also important for the agent to outline any rebate, discount, commission or benefit that they may receive in relation to any of those expenses.
- Part 10 – Signatures
The following important tips apply in relation to obtaining signatures:
- Always make sure that the form is signed by the agent;
- If the client is a natural person, have the form signed by that person;
- If the form is to be signed by a Power of Attorney, ensure that you obtain a copy of that Power of Attorney and proof of identification of the person reporting to be the Power of Attorney. A registered Power of Attorney is preferable;
- If there are two or more individuals who own the property, obtain a signature from each individual;
- If a company owns the property, make enquiries as to whether there are more than one director. A company search will reveal the directors of the company. If there are two or more directors, you should obtain the signature of two directors.
Schedules and Attachments
A number of real estate agents have their own terms, conditions and attachments to the form. It is very important that these are properly referred to within the form itself and they do not conflict with the information contained within the form.
If any agent or consumer has any concern in relation to the validity of an appointment to act, please contact one of our experienced Solicitors or Paralegals at Ferguson Cannon Lawyers to provide advice.
If you have any concerns please do not hesitate to contact Byron Cannon on 5443 6600, or email byron@fclawyers.com.au
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