Authorities, rebates and commission - estate agents

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Sales authority

An authority is the document that enables a client (seller, landlord or other person) to appoint an agency to act (buy, sell, lease or manage real estate) on their behalf.

An authority may be:

  • drafted by an estate agent
  • drafted by a legal practitioner
  • in a standard form from the Real Estate Institute of Victoria (REIV)
  • purchased from a commercial publisher.

Information for property sellers

For more information on the different types of sales authorities, see Selling property with or without an agent.

Contents of an agency authority

An agent must include the following information and statements in all authorities:

  • details of the commission and expenses agreed with a client
  • the agreed commission and expenses stated as a dollar amount or a percentage (if a percentage is stated, an example of the dollar amount it represents must also be given)
  • a statement, using the wording approved by Consumer Affairs Victoria, advising where a complaint about commission or expenses can be made
  • a rebate statement using the wording approved by Consumer Affairs Victoria.

If you use an authority that does not include this information, you risk losing the commission and being fined.

Additional information must be included in particular authorities:

  • an authority to sell must state the agent’s estimate of the selling price, in the wording approved by Consumer Affairs Victoria. This price can be a single figure or a range of up to 10 per cent.
  • a sole or exclusive authority must have a statement advising that, unless otherwise agreed, the authority ends:
    • 30 days after the date of an auction, or
    • 60 days after the date an authority is signed for a private sale.

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An estate agent or agent’s representative must complete the rebate statement in an authority, to indicate whether or not they will receive any rebates or discounts. These might be received for advertising, maintenance or other expenses paid on behalf of or by a client.

We provide two approved rebate statements. Choose the statement that suits your agency’s practices, based on whether you receive rebates or not.

It is illegal for an agent to keep a rebate, either monetary or non-monetary. It must immediately be paid to the client except if in anticipation you have already paid the amount or reduced the expenses charged.

If you receive a non-monetary rebate, you must pay the equivalent dollar amount to the client.

When calculating a client’s expenses, any rebates you receive or expect to receive should be factored in. If you do not know the exact expense, you should estimate it. If the actual expense is less than the estimate, the difference must immediately be paid to the client.

A client may recover any rebate they are entitled to but have not received.

An agent who illegally keeps a rebate is liable for a fine of up to 60 penalty units. If this occurs on three separate occasions over 12 months, the fine is up to 240 penalty units. For more information, view our Penalties page.

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Commission sharing

If an agent is sharing commission with anyone other than an estate agent or agent’s representative who works in their agency, they must notify the client before the client signs an authority.

A commission sharing notice must be in the wording approved by us. It may be a separate document or, for convenience, included in an authority.

Download a copy of our Director approved form for use in agency authority - notice of commission sharing (Word, 79KB).

Entitlement to commission

An agent cannot claim or sue for commission or expenses for a property or business transaction unless they:

  • have a written authority that includes all of the information and statements required by the Estate Agents Act 1980
  • give the client a copy of the signed authority
  • inform the client that the commission and expenses are negotiable, before they sign an authority.