Proactive compliance visits - Real estate agents

This publication is for: 
Licence holdersProperty industry
Documents: 
file type icon Real estate and business agents compliance self-assessment checklist

Consumer Protection staff organise regular proactive compliance visits to licensed or registered people throughout the state.  The visits aim to ensure the laws are followed, help educate what the laws means on a practical level and provide information about changes.  

If you would like more information please contact the Consumer Protection Advice Line team on 1300 304 054 or by email.

Preparing yourself

Objectives of the program

Consumer Protection has an initiative to “conduct and promote education and provide advisory services for persons who are licensed or registered” under the authority provided by the Real Estate and Business Agents Act 1978 “the Act”. 

The proactive compliance program aims to encourage high levels of compliance with the requirements of the Act, the Regulations and Code of Conduct resulting in:

  • greater understanding by agents of the laws which govern their activities;
  • the achievement of consistently high ethical and professional standards in the industry;
  • fair and open competition because all agents compete on the same “level playing field”;
  • enhanced consumer protection because of high ethical and professional standards; and
  • the delivery to agents of compliance tools including checklists, references, manuals and compliance systems.

How the visit is conducted

A proactive compliance visit entails:

  • meeting with the person in bona fide control of the agency;
  • a reconciliation of your current representatives to ensure the accuracy of the Department’s database in relation to your staffing profile and licensed and registered persons;
  • review of notices and particulars on correspondence and documents;
  • examination of the agency’s trust account and trust accounting procedures;
  • a review of a sample of the agency’s settled sales files; and property management files;
  • a discussion with you of the complaints (if any) lodged against your agency;
  • a discussion with you of the training and professional development needs of your agency.

What you will need:

To ensure the visit is conducted with the minimum of disruption to your business operations we would be pleased if you would have the following available at the appointed time of our visit:

  • The Licence, Triennial Certificate and Business Name Registration Certificate displayed [Section 41(1)(a) & (b)]
  • A copy of the agency’s letterhead [Section 41(2)(a) & (b)]
  • A printed copy of the Appointment to Act and Offer & Acceptance documents used in your agency (if applicable)
  • Your trust account bank statements and reconciliations for the previous 3 months
  • Your trust account cheque book and receipt book
  • A sample of identity checks recently conducted by your agency
  • A sample of an advertisement recently placed by your agency
  • The last audit report from your agency’s auditor.

We will select a sample of your settled sales files and property management files for inspection during our visit.

As a minimum you should review the following prior to the visit:

Proactive visit checklist:

The following checklist will help you prepare for a proactive compliance visit:

Proactive compliance checklist - Real estate agents
Description Legislation
LICENSING / RECORDS
Do you have a documented dispute resolution process in place to ensure you are advised of the issues? Code r.14 BP
Are all staff provided with regular training on handling disputes including when matters should be escalated? Code r.14 BP
Is the current licence and Triennial Certificate (TC) of the licensee displayed as required? REBA Act s.26, s.41(1), s.37
Is the current Business Name recorded on the TC? REBA Act s.40(1)
Do the required particulars appear on correspondence and documents? REBA Act s.26, s.41(2)
If a branch office, does the branch manager hold a correctly endorsed and current TC? REBA Act s.41(1), s.37, s.38
Has the department been advised of all current registered and licensed employees? REBA Act s.51(1) Code r.14
Are there processes in place to ensure that the registrations of all sales representatives are current? REBA Act s.44, s.45, s.46, s47, s.48
REBA Regs r.4AB, r.4AC
Is the property manager registered or, if licensed as an agent, is a current Triennial Certificate held? REBA Act s.44,s.45, s.46
 
CONFLICT OF INTEREST
Do you or any staff have any potential/actual conflict of interests or any affiliation with any settlement agency or any other significant relationship requiring disclosure? REBA Act s.64(1)
Code r.16
If required, is the disclosure adequate? REBA Act s.64(1)
Code r.16
Is the disclosure provided prior to signing of an Offer & Acceptance?
Ref. REBA vs Landa [2008] WASAT 114		 REBA Act s.64(1)
Code r.16<
Do you or any staff members recommend a third party service provider to clients? Code r.16
Is a written disclosure of the relationship provided? Code r.16
Has a client been referred by a third Party? Code r.16
Do you provide a written disclosure of any commission or fee paid in acceptance of the referral? Code r.16
 
IDENTIFICATION
Do you undertake appropriate searches e.g. CT, ASIC, encumbrances, property interest reports? Code r.25
Where there is a Power of Attorney, is this retained on file? Code r.25
Do you have sufficient procedures in place to identify clients? Code r.5, r.6, r.14, r.25
Is ID obtained and evidence retained on all sales and property management files? Code r.5, r.6, r.14
BP
Are security passwords used for updating lessor's information on property management transactions? Code r.5, r.6, r.13, r.14
BP
 
ADVERTISING
Do you review and authorise advertisements and all promotional material before they are published? REBA Act s.62(1), s.62(2)
Code r.23
Do you regularly review properties advertised on various websites to ensure any listings are accurate? Australian Consumer Law (ACL) s.18
Do you ensure sold and settled properties are removed from agency's website? CACL s.18
Are you able to validate any testimonials you provide on any websites? ACL s.29(1)(e), s.29(1)(f)
 
TRUST ACCOUNTING
Are trust accounts and interest bearing trust accounts (IBTAs) including cheques designated in accordance with the REBA Act and REBA Regs? REBA Regs r.6D
Are all trust accounts opened during the year disclosed to DMIRS and the auditor? REBA Act s.68C(1), s.70(1)
Are all IBTAs opened during the year disclosed to the auditor? REBA Act s.70(1)
Do trust account(s) receipts conform to the REBA Act and REBA Regs? REBA Regs r.6G
Is banking done by the next business day including for strata management? REBA Act s.68(6)(b)
Are trust accounts reconciled on a monthly basis (to the last day of the month)? REBA Act s.68(6)(d)
BP
Do you review and certify the monthly reconciliations within 10 working days after the end of month? Code r.6, r.14(3)
BP
Do you investigate unidentified deposits, follow up unpresented cheques and take appropriate action to deal with those monies? REBA Act s.68(6)(a)
Are you proficient in performing bank reconciliations? REBA Act s.27(1)(d)
Code r.14(3)
Do you include IBTAs in monthly reconciliations? REBA Act s.68(6)(d)
Are written instructions for IBTAs retained? REBA Act s.68A
Code r.13
BP
 
SETTLED SALES FILES
Is the appointment to act in writing? REBA Act s.60(1)(b)
Code r.17(1)
REBA Regs r.6BA(2), r.6BA(2), r.6BA(3)
Does it clearly set out the services to be rendered? REBA Act s.60(2)(a)(i), s.60(2)(a)(ii)
Does it clearly identify the property/business e.g. address, title details? REBA Act s.60(2)(a)(ii)
REBA Regs r.68A(2), r.6BA(2), r.6BA(3)
Is it signed by the person(s) for whom the services are being provided or his/her lawfully authorised agent/representative? REBA Act s.60(1)(b)
Does the appointment to act contain the prescribed information i.e.:
• a statement that commission charges are not pursuant to any scale fixed by law and are to be agreed upon; and that
• clients may seek assistance from the Commissioner for Consumer Protection in relation to fee disputes?		 REBA Regs r.6BA(2), r.6BA(3)
Does the appointment to act set out the method by which the remuneration is to be calculated? REBA Act s.60(2)(a)(ii)
REBA Regs r.6BA(1)
If it is expressed as a percentage, does it provide a clear relevant example of this calculation (e.g., selling price, gross rental)? REBA Act s.60(2)(a)(ii)
REBA Regs r.6BA(1)
Is a maximum amount specified where the remuneration is expressed as an hourly, weekly or periodic rate? REBA Act s.60(2)(a)(ii)
REBA Regs r.6BA(1)
Does the appointment to act specify the nature of any expenses that you will recover and the basis upon which it will be calculated e.g. marketing expenses specified, agreed and initialled by both parties? Regs r.6BA(1)(d)
Code r.20
Are material facts relating to the transaction ascertained, verified and disclosed? Code r.24
Is any requirement for a foreign resident withholding tax disclosed? Code r.24
Are all deposits received into the trust account? REBA Act s.68(1)
Do you have a process in place to ensure that commissions are drawn from trust accounts after you have been advised that settlement has taken place? REBA Act s.61(4)
Do you review files and records and ensure that they are properly maintained? Code r.14
Do you supervise staff to ensure employees comply with relevant legislation? Code r.14
 
OFF THE PLAN SALES
Does the appointment to act match the Certificate of Title? REBA Act s.60
Code r.17(1), r.25
Have you verified that the vendor/developer is the proprietor? SOLA s.13(1), s.13(2), s.13B, s.13C
How many lots are being sold? SOLA s.13, s.13A, s.13B, s.13D
Do the contracts comply with the new provisions of the SOLA? SOLA s.13, s.13A, s.13B, s.13C, s.13D
 
PROPERTY MANAGEMENT FILES
Are the appointments to act (residential/commercial) valid? REBA Act s.60(1), s.(2)
REBA Regs r.6BA
Code r.17(1)
Are funds paid by the tenant at the commencement of the lease paid into the trust account? RTA s.27
REBA Act s.68(1)
Do you keep a record of every tenancy agreement sign up to ensure funds are deposited into the trust account? RTA s.27
REBA Act s.68(1)
BP
Are actual costs/disbursements recouped as per the appointment to act? Code r.6, 7, r.19, r.20
Does the owner statement match the terms of the appointment to act? Code r.6, 7, r.17, r.19, r.20
Regs r.6BA(1)
Are residential tenancy bonds reconciled regularly? BP
Do you know who is on your list of Bonds Online users? RT Regs r.7H
Code r.6, r.14
Do you have a process to ensure only authorised personnel have access? RT Regs r.7H
Code r.6, r.14
If you use a third party such as BPay or ipay rent to collect rental funds do you ensure that tenants are provided with a fee free means to make the payment? RTA s.27
Are lease agreements in the prescribed form (Form 1AA)? RTA s.27A
RT Regs r.10AA
Is the lessor’s full name being included in the lease agreement? RTA s.51
Do property condition reports contain the prescribed minimum content? RTA s.27C
RT Regs r.10AC
Do you provide a copy to tenants within 7 days of their moving into the rental premises? RTA s.27C
Do additional clauses in part C of the lease agreements conflict with or contract out of the RTA or contain unfair contract terms? RTA s.82
ACL s23, s.24, s.25
Do you provide a notice to prospective tenants advising that a tenancy database is being used? RTA s.82C to s.82K
Have you found anyone on a database in the last 2 years?
• If so, has the required information been provided?		 RTA s.82D
If you have listed anyone on a database in the past 3 years, has the person been advised of the intention to list and been provided with a copy of the proposed listing? RTA s.82E to s.82K
Do you have a process in place for arranging for repairs to be conducted within a reasonable period after the need for repair arises? RTA s.42(2)(b)
Do you review files and ensure that records are properly maintained? Code r.14
Are you and your staff aware of the key changes to tenancy laws for tenants affected by family and domestic violence (FDV) which commenced on 15 April 2019? RTA s.17B,s.56A,s.47(4), s.47(5),s.71AA to s.71AE
FV Regs r.12BA, r.12CA, Schedule 4 Form 2, Schedule 5
Are all staff aware of the confidentiality provisions relating to the disclosure and security of information as part of the FDV changes? RTA s.71AB(3), s.71AB(4),s.71AD(3)
Have appropriate procedures been established to manage the FDV changes? Code r.6, r.9, r.14

Consumer Protection
Fact sheet
Last updated 11 Oct 2019
First published 10 Mar 2014

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