Estate agents, their employees and family members are generally prohibited from purchasing any property or business which the agency is commissioned to sell.
Under section 55 of the Estate Agents Act 1980, it is an offence for an estate agent or agent's representative to obtain a beneficial interest in a property that they have been commissioned to sell.
Exemption from section 55 requirements
You are exempt from section 55 requirements if you can demonstrate that you have:
- obtained the vendor's written acknowledgement that the vendor is aware of, and consents to, the possibility that you may obtain the interest
- acted fairly and honestly in the transaction
- ensured no commission or other reward is payable in the transaction, and
- left the vendor in substantially as good a position as the vendor would be if the real estate or business were sold at fair market value.
You must provide the written acknowledgement in the Disclosure of conflict of interest to vendor (Word, 677KB). Note: you do not have to lodge this form with us. You should keep it with all other documents relating to the sale of the property.
The maximum penalty for breaches of section 55 is two years' jail and a penalty of up to 240 penalty units. For more information, see Penalties for estate agents.
A beneficial interest includes where you buy a property or obtain an option to buy a property.
A beneficial interest can be obtained by a number of parties, including:
- you or your associate
- a proprietary corporation of which you (or your associate) are a member
- a corporation over which you (either individually or jointly with your associates) or your associate can exercise control - you can exercise control if you have the capacity to determine the outcome of decisions about the company's financial and operating policies
- a corporation of which you (or your associate) are an executive officer
- if the estate agent is a corporation, an executive officer of that corporation or an associate of the executive officer
- the trustee of a discretionary trust of which you (or your associate) are a beneficiary
- a member of a firm or partnership of which you (or your associate) are also a member
- another person carrying on a business for profit or gain where you or your associate have a right to participate in the income or profits of that business.
- an employee of an estate agent
- a spouse, domestic partner, parent, brother, sister or child of an estate agent
- a child of an estate agent's spouse or domestic partner.