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Obligations of Real Estate and Business Agents (WA)

In Western Australia, all real estate and business agents have an obligation to comply with the obligations set out in the Real Estate and Business Agents and Sales Representatives Code of Conduct 2016. This page deals with the obligations of real estate agents in WA.

Legislation

Real estate agents in WA are governed by the Real Estate and Business Agents Act 1978 as well as by the Real Estate and Business Agents and Sales Representatives Code of Conduct 2016.

Duties of real estate agents

The primary duties imposed on agents and sales representatives by the Code of Conduct are:

  • to act in good faith and exercise due skill, care and diligence (Section 6);
  • to act in the best interests of their clients (Section 5);
  • to be honest in their dealings with all persons involved in a transaction (Section 7); and
  • to act in accordance with the client’s reasonable instructions (Section 10(b)).

What if an agent breaches their duties?

If a real estate or business agent breaches any of their duties or obligations, the aggrieved person may make an application to the State Administrative Tribunal.

 Under section 103(1) of the Act, the State Administrative Tribunal has the power to:

  • reprimand or caution the agent;
  • impose a fine not exceeding $10,000; or
  • suspend or cancel an agent’s licence and triennial certificate and disqualify the agent either temporarily or permanently, or until the fulfilment of any condition imposed by the Tribunal.

Alternatively, under section 103(3), in a matter concerning the discipline of a sales representative the Tribunal may:

  • reprimand or caution the sales representative;
  • impose a fine not exceeding $3,000; or
  • suspend or cancel the agent’s registration and, in addition, disqualify him either temporarily or permanently, or until the fulfilment of any condition which may be imposed by the Tribunal, from being registered.

A licensee may have their licence and triennial certificate cancelled if they commit an offence involving:

  • defalcation (misappropriate of funds) by the licensee; or
  • the knowingly fraudulent rendering of an account in respect of money or property entrusted to them by or on behalf of another person in the course of their business; or
  • a breach of any of the provisions of Part VI relating to the proper payment of money in and out of the licensee’s trust account of the licensee.

Examples

The following penalties have been imposed for breaches committed by real estate and business agents in Western Australia.

Real estate agent barred from registering for 15 years

In 2017, Paul King was sanctioned for 13 breaches of the Code of Conduct relating to the sale of five lots of rural land between 2008 and 2010 while King was working for his father’s real estate agency. Mr King had sold the properties to an intermediary company controlled by his brother, Michael King, who was not a licenced real estate agent or sales representative. The properties were then sold to Malaysian investors at substantially higher prices, with more than $5 million profit going to Mr King.

This was in direct breach of Mr King’s obligation to act in the best interests of his client. Mr King was barred from registering as a real estate agent for 15 years and he and his father were fined $39,000 in total.

$5,000 fine for breaches of the Real Estate and Business Agents Act and Code of Conduct

In 2016, Caputo & Clay Pty Ltd trading as Harcourts Integrity Maylands was fined $5,000 for breaches of the Code of Conduct relating to various accounting failures. These allegations related to the withdrawal of trust funds without prior authorisation and failure to maintain proper records of transactions. Among other things, the Tribunal found that Harcourts Integrity had failed to exercise due skill, care and diligence.

Real estate agent suspended for 18 months and fined $3,000

In the case of Johnson v Sheppard, heard by the Western Australian Supreme Court in 2005, Mr Johnson was found to have failed to exercise due skill, care and diligence in effecting a misdirection of rental monies. This accounting failure resulted in the agent being suspended from practice for 18 months and fined $3,000. Mr Johnson appealed this decision, but the appeal was dismissed.

How can we help?

If you believe that your real estate agent or business agent is in breach of their obligations under the Real Estate and Business Agents Act or the Code of Conduct, GTC Lawyers can assist you to try to resolve these issues with the agent. If no mutually agreeable solution can be reached, GTC Lawyers can help you make an application to the State Administrative Tribunal for adjudication of the matter.

If you require legal advice or representation in any legal matter, please contact Go To Court Lawyers.

Author

Michelle Makela

Michelle Makela is a Legal Practice Director at Go To Court Lawyers. She holds a Juris Doctor, a Bachelor of Science (Psychology) and a Master of Criminology. She was admitted to practice in 2006. Michelle has over 15 years experience in the legal industry, working across commercial litigation, criminal law, family law and estate planning. 

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