- Schedule 2 Part 1 applies to real estate agents and assistant agents exercising functions relating to the sale or purchase of land, or business agent functions.
- Schedule 2 Part 2 applies to real estate agents and assistant real estate agents who exercise functions in relation to lease of land, or on-site residential property manager functions.
In addition to complying with the rules of conduct, agents and assistant agents may have to comply with other laws, including the Property and Stock Agents Act 2002, in relation to their conduct and in carrying out their functions.
For example, strata managing agents also have obligations under the Strata Schemes Management Act 2015. Further information about strata schemes and their management can be found on the community living page.
Some examples of the rules of conduct are outlined below.
Payment of rental income monthly to landlord
An agent must pay rental money received on behalf of the landlord under a residential tenancy agreement to the landlord at the end of each month, unless the landlord has instructed the agent in writing to do otherwise.
This ensures that any rent owing is passed on in a timely manner and landlords are aware if there has been a failure to account for their rental income.
Gifts and benefits generally prohibited where there could be a conflict of interest
Section 53F of the Property and Stock Agents Act 2002 establishes a general prohibition on agents receiving or requesting gifts or benefits for themselves or for another person in circumstances that could reasonably be considered to give rise to a conflict of interest.
However, this does not apply to:
- anything provided by the agent’s employer
- anything provided as part of an agency agreement or as a gift of thanks from a client for services provided under the agency agreement, or
- anything of less than $60 in value - which is the same level as the dollar limit under the reforms to the laws governing strata managing agents that commenced in 2016.
The Supervision Guidelines also require principal licensees to maintain a register of gifts and benefits received by agents employed in the agency.
Information about these guidelines can be found here.
Separate trust accounts for rental and sales money
The licensee in charge of the business will need to establish a different general trust account for rental money and sales money. Rent and sales deposits must not be kept in the same general trust account.
Many businesses already maintain separate trust accounts for rental income and sales deposits; this new rule mandates it for everyone.
This requirement aims to improves the accountability and transparency of agents by ensuring they do not mix rental and sales money in a single trust account.
Expression of interest deposits
An expression of interest deposit is made prior to the exchange of contracts and shows the vendor that the buyer’s offer is serious. It does not oblige the buyer to purchase the property, and it does not oblige the vendor to sell the property. Expression of interest deposits are refundable.
It is important that consumers are aware of their rights in relation to expression of interest deposits. To ensure this, the Regulation imposes rules on real estate agents (including a buyer’s agent) and stock and station agents. None of them can accept an expression of interest deposit from a person, unless they have given the person the following information in writing:
- the vendor has no obligation to sell the property or business,
- the buyer has no obligation to buy the property or business, and
- the deposit is refundable if a contract for sale of the property or business is not entered into.
Before the agent accepts the deposit, the person must give a signed written statement to the agent confirming they were given the above information and they understand it.
The agent must promptly inform the person if a subsequent offer is made to purchase the property.
An agent acting for the vendor must also:
- advise the person that they have the right to make further offers until exchange of contracts has taken place,
- refund the expression of interest deposit within 14 days once a contract for sale of the property has been entered into by someone else, and
- promptly inform their client that an expression of interest deposit has been paid.
Rules for rent bidding and advertising residential rental properties
From 17 December 2022, the rules of conduct have been updated to prohibit agents from soliciting rent bidding.
A real estate agent or assistant real estate agent cannot solicit or invite an offer of rent that is higher than the advertised price for a residential rental property. However, agents can accept a higher rental offer if it is made freely and voluntarily by a prospective tenant.
To support this change, any new advertisements for residential rental properties published on or after 17 December must include a fixed price. They can no longer be advertised with a price range, or text like 'offers from' or 'by negotiation'.
Properties that were advertised before 17 December and are still currently being advertised do not need to meet this new requirement.
Signs used on or near the property which advertise that it is available for rent are not required to list a price.
These changes only apply to leasing of residential property.
The penalty for non-compliance with a rule of conduct applies. That is, the maximum penalty that a court can award for non-compliance is $11,000 for a corporation or $5,500 in any other case. A fine (Penalty Infringement Notice) may also be issued - $550 for an individual or $1,100 for a corporation.
For answers to common questions about the new rules, please see our Rent bidding - general fact sheet.
