April 2008 - Moratorium

Legal Comment by Mark Illidge of Hinterland Lawyers

In November 2007 I wrote an article regarding the effect on real estate agents of amendments to the Legal Profession Act. The amendments prohibited real estate agents from: preparing or assisting in the preparation of contracts, or providing advice to a buyer or seller about the effect of the details completed by the agent or any other provision of the contract.

Since that time, the Queensland Government has introduced an extra piece of legislation that grants a moratorium (from 1 July 2007 to 30 June 2008) for real estate agents and their employees. Specifically, Queensland real estate agents and their employees are not considered to have engaged in legal practice if:

• The activity occurred between 1 July 2007 and 30 June 2008; and
• The activity was the preparation or assisting in preparing a contract by a real estate agent for another person; or
• The activity was ancillary or incidental to the above and part of the ordinary course of business undertaken generally by a real estate agent.

The moratorium ends on 30 June 2008.

As an aside, regardless of who prepares the contract, it is advisable for both buyers and sellers to ask their solicitor to review the contract prior to signing.

June 2008 - Way forward for Real Estate Agents

Since the above article was published in April 2008, after considerable lobbying by the real estate industry, Parliament has passed further amendments to the Legal Profession Act to provide a way forward on these issues.

The amendments provide that a real estate agent is not engaging in legal practice only because the agent “prepares or completes” a contract. Preparing or completing a contract permits the agent to insert information in a blank space or cross out an alternative included in the contract. The agent is also permitted to insert or alter a term of the contract if the insertion or alteration is:

• Authorised by the buyer or seller; or
• Given in writing to the agent by the buyer or seller; or
• Was previously prepared by a solicitor, whether or not in connection with the sale.

An agent is still prohibited from engaging in legal conduct, which would include:

• Drafting a special condition;
• Changing the term provided by the buyer, seller or solicitor except to ensure the contract reads properly in relation to the property; and
• Giving legal advice in relation to the effect of the contract.

The relevant amendments are anticipated to become effective on 1 July 2008, on the expiration of the moratorium period. In any case, it is advisable for both buyers and sellers to consult their solicitor prior to execution of the contract to ensure that your rights are protected and that you understand the effect of the contract.

To find out more about the authors you can read About Us

For more information or to make an appointment please Contact Us