Summary of Submissions - Real Estate Agents Authority

More documents

Recommendations

Info

Agency Agreements 42 Some submitters contended that there should be exemptions from the requirement to obtain an agency agreement when: • representing commercial clients • representing retail and industrial clients • managing a mortgagee sale. 43 One submitter also contented that licensees should be permitted to obtain a commission from both parties (buyer and seller) where there is informed consent from both parties. 44 Another submitter suggested that licensees should be required to explain what the Attorney’s consent clause in agency agreements actually means to ensure that licensees are not misleading prospective clients on their ability to amend agency agreements, following advice from their lawyer, after they have signed the contract. New Rule Ten: Duties when selling 45 This proposed new rule contains those rules from rule nine and rule 6.5 that specifically relate to a licensees obligations when their client is a seller and includes amendments requiring licensees to: • inform their clients when an appraisal has been conducted without any comparable sales to base the appraisal on • explain to prospective clients when an agency agreement will finish. 46 Submitters provided a number of comments on this new rule which separates out existing rules that only relate to agency relationships and duties when the client is a seller. 47 One submitter suggested that rules 10.11 and 10.12 are inappropriately placed under the marketing and advertising sub-heading and should have their own separate heading to emphasise their focus on contractual matters. 48 Another submitter was of the opinion that rule 10.12 (which sets out record keeping obligations) is inappropriately targeted at all licensees and creates unnecessary complication. They suggested that instead rule 10.12 should be an obligation on agent licensees (as the agent with whom the client has an agency agreement) and that salespersons and branch managers should have a related duty to ensure that copies of all sale and purchase agreements are provided to their agent for their records. 49 Submitters provided feedback that rule 10.18 (prohibiting marketing and offering without an agency agreement) is a significant barrier in commercial and mortgagee sales and one suggested that it should be amended to allow for presentation of unsolicited offers. 50 One submitter suggested that rule 9.1 is not adequately enforced or respected in relation to selling property for clients. They contended that licensees breach their fiduciary duty to their clients whenever they refuse to allow another agency access to the property to bring a customer Code of Conduct Summary of Submissions June 2012 Page 8 of 12
through the property. They recommended that rule 10.4(c) be amended to require licensees to specify when signing up clients how the agent would deal with other agencies on a conjunctional basis. 51 The other parts of this rule that attracted the most comments were appraisals and questions in relation to better disclosure of individual incentives. Appraisals 52 The consultation document included a new rule relating to notifying clients when there was insufficient information or comparable sales to make an accurate appraisal. Many submitters were supportive of this proposal, but concerned about possible misuse or abuse by licensees. One submitter, while supportive of the rule, suggested that this new rule differentiate between information that does not exist and data that the licensee may not be able to access, or has decided not to access due to associated costs. Another submitter supported this rule, but wanted to see restrictions for residential real estate where licensees have, at a cost, easy access to databases with comparable sales information. 53 One submitter questioned whether the Code of Conduct required a new appraisal when resigning sole agency agreements after 90 days. 54 One submitter suggested that appraisals should be able to contain a price range, rather than a specific price. Another questioned the relevance or desirability of requiring appraisals for general agencies where clients are likely to receive a number of appraisals. 55 Another contended that the requirement for a written appraisal was only when an appraisal was given and that the Code of Conduct could not require licensees to conduct an appraisal in all situations. 56 One submitter was of the opinion that most licensees do not have the adequate skills and knowledge to provide a quality appraisal and as such they would seek to use this new rule to avoid conducting appraisals. 57 One submitter who did not support the proposed changes to the Code of Conduct around appraisals suggested that a lack of comparable sales would be readily apparent to a client when the agents’ appraisal of their property did not contain any comparable properties or sale information. Another submitter suggested that it is unrealistic to require an appraisal on a business as a going concern and that in these situations clients should obtain a valuation. 58 One submitter suggested that rule 10.1 be amended to include a sentence such as “licensees must not inflate their appraisal of the property as a means of obtaining an agency agreement” as a useful tool to discourage licensees from “buying listing”. 59 One submitter suggested that licensees should be required to advertise the appraised price. Disclosure of individual incentives 60 The consultation document asked submitters about whether licensees should be required to disclose differences in individual financial incentives when recommending specific sales method. The Authority understands that it is commonplace for a listing agent to obtain different splits of Code of Conduct Summary of Submissions June 2012 Page 9 of 12
Page 1 and 2: Real Estate Agents Authority Review
Page 3 and 4: • disclosure of defects (rule 6.5
Page 5 and 6: Rule Six: Standards of professional
Page 7: Rule Nine: Client and customer care
Page 11 and 12: Commercial real estate 69 A number

Summary of Submissions - Real Estate Agents Authority

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?