The Fair-Trading Act 1987 regulates all business in New South Wales. The recent amendments to this Act will require Real Estate Agents, Stock and Station Agents and Strata Managing Agents to re-think their business strategies.

The amendments were not designed specifically for the property industry. It appears to have been targeted at credit cards and petrol stations, but it will have a critical effect on this industry.

Section 47A wants you to hang out the dirty washing. It is worth quoting paragraph [1] in full:

(1) A supplier must, before supplying a consumer with goods or services, take reasonable steps to ensure the consumer is aware of the substance and effect of any term or condition relating to the supply of the goods or services that may substantially prejudice the interests of the consumer.

You are now required to advise vendors and purchasers of all adverse clauses. This will have an impact on Agents when signing agency agreements and when you are exchanging contracts.

Section 47B follows Fair Trading’s obsession with having to disclose whatever you earn and introduces the concept of an intermediary. Section 47B compels you to tell all persons, whether a client or not, if you are getting a fee. 

Strata Managers have been used to this for five years. This however is a little worse! If you are a Real Estate Agent who refers a person buying a property to a mortgage broker and you are to be paid a referral fee, you must disclose the fee. By the way, they don’t have to be buying a property listed by your agency, it applies even if you hook up a friend with a broker.

The ramifications of these two amendments are too large for one newsletter. Over the next two weeks, I will outline how each of these amendments affect your office and the way you function.

These amendments will change everything you do.