Estate agents commission fiasco to be fixed

The Victorian government has revealed its “fix” for the problems that emerged from the Victorian Court of Appeal’s decision in Advisory Services Pty Ltd v Augustin [2018] VSCA 95. That decision was the subject of an earlier blog. The consequence of the decision was that estate agents faced claims by vendors for recovery of commissions that had been paid despite the agent’s engagement or appointment containing rebate statements in a form approved by the Director of Consumer Affairs Victoria. The decision also prevented agents who had not been paid from seeking to recover commissions.

The “fix” is contained in the Justice Legislation Miscellaneous Amendment Bill 2018 which has been introduced into the Victorian Legislative Assembly. The Bill provides for amendments to the Estate Agents Act 1980 which will protect agents who have used a rebate statement in a form approved by the Director but, by reason of the decision in Advisory Services, does not contain the statement referred to s.49A(4)(a) of the Act or the statement referred to in s.49A(4)(c) of the Act. However, the protection will apply only where the rebate statement is contained in an engagement or appointment entered into before the date after the day on which the Justice Legislation Miscellaneous Amendment Act 2018 receives the Royal Assent.

The amendments to the Estate Agents Act will not assist the unfortunate estate agent in Advisory Services.

Estate agents and their advisors should ensure that the correct rebate statements are being used.