The Real Estate and Business Agents Act 1978 defines a developer as:
“…a person whose business either alone or as part of or in connection with any other business, is to act on his own behalf in respect of the sale, exchange, or other disposal of real estate”.
The Act and the Real Estate and Business Agents (General) Regulations 1979 impose certain obligations on developers.
Pursuant to the Act, developers must observe the following key requirements:
register its principal place of business with Consumer Protection in writing (s.57), and notify the Commissioner of any change in particulars (s.58);
keep a record of all real estate transactions in which they have been involved, for a minimum of six years (s.59);
comply with advertising requirements (s.62);
supply copies of signed contracts and documents relating to the transaction that has been negotiated or that is the subject of negotiation, to the parties involved (s.63);
comply with consumer protection laws; and
if a developer employs a person to sell property on their behalf, that person must be a licensed real estate agent holding a current triennial certificate or a registered sales representative with a current certificate of registration (s.54 (2)).
The Commissioner for Consumer Protection issues the following guidelines to assist developers in complying with the record keeping requirements of the REBA Act and Regulations (section 59 of the REBA Act and Regulation 6H).
Developers shall keep a record of all real estate transactions in which they have been involved. Each transaction shall be filed separately and the file retained for a minimum of six years. The record shall include:
- A stamped executed copy of the contract.
- All correspondence relating to the transaction.
- The settlement statement and statements of adjustments of rates and taxes.
The following information is given in respect to advertising by developers. Under section 62 of the REBA Act, a developer is responsible for authorising the publication of advertisements in respect of the developer business.
A duly authorised advertisement must contain sufficient details to identify the developer. As per real estate advertising generally, the trading name and office telephone number is a minimum requirement. The mobile number or home number of a developer, agent or sales representative alone is not sufficient, neither is an email or website address. However, these could be placed in an advertisement along with the minimum requirements mentioned.
Advice for consumers purchasing from a developer
Developers, who sell directly to consumers or employ a registered sales representative to do so, are not required to place deposits in a statutory trust account under the Real Estate Business Agents Act 1987.
You should ensure there are appropriate safeguards for any deposit money you pay, by asking the developer what will happen to the deposit money and getting written confirmation of this in the contract.
Many developers engage a real estate agency and in these cases, the deposit money must be held in the real estate or settlement agent’s trust account. You can check the Department of Commerce’s website to ensure the real estate and settlement agent are licensed (all agents displayed on the Department’s website hold a valid Triennial Certificate).
However, to protect your deposit, if you are dealing directly with a developer instead of with a real estate agency, you should ensure your contract contains a clause stipulating the deposit money be held in a trust account with a settlement agent or solicitor.
If settlement is more than 60 days from the date you sign the contract, or you deposit is more than $20,000, you can request (in writing) that your deposit be held in an interest bearing trust account (ie the interest is payable to you).