The world of property is a wide church. We have residential, rural, commercial and retail property. It is obvious that all property sells under a written contract, but it is only a select few that require agents to hold a contract in their office before putting the property to market.
The Property and Stock Agents Act 2002 (“the PSAA”) is a difficult document to navigate. It is inconsistent regarding its application to certain properties. It has no rhythm or reason to its approach. No wonder why one of our most asked questions is “Do I need a Contract before marketing”?
Section 63 of the PSAA provides us with the answer:
(2) A real estate agent must not offer residential property for sale unless the required documents are all available for inspection at the real estate agent’s registered office by a prospective purchaser or agent for a prospective purchaser at all times at which an offer to purchase the property may be made (or at such other place or at such other times as may be prescribed by the regulations).
Section 63(4)[b] states that the documents referred to in Section 63 include a complete contract required by Section 52A of the Conveyancing Act 1919. Clearly, the PSAA only requires agents to have a contract in their office when selling residential property. This includes the sale of off-the-plan properties.
What is a residential property? The Conveyancing Act 1919 sets out a residential property must be smaller than 2.5 hectares, contain a dwelling or be linked to a dwelling. In other words, it must be below 2.5 hectares and have a place for people to live.
Properties above 2.5 hectares and only having business premises can be sold without a contract in the agent’s office.
By the way: not having one, attracts a $1100 on the spot fine.