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Legal Tips when Speaking to an Agent to Sell

Legal Tips when Speaking to an Agent to Sell


  • What are some of the most common legal requirements of an Agent as set out in the Property Stock and Business Agents Act
  • When can an Agent offer a property for sale and what is considered ‘offering’ a property for sale
  • What does an Agent have a duty to disclose

In NSW, Real Estate Agents are regulated by The Property Stock and Business Agents Act 2002. The Act provides conduct and competence standards required to carry out their profession. Whether you are a Real Estate Agent, a Vendor or a Purchaser the contents of this Act is of relevance to you.

It’s impossible to cover all of the Agents legal requirements set out in the Act so in the interests of time I’ve addressed some of the most common ones.

Section 63(2) of the Property Stock and Business Agents Act 2002 states an Agent cannot offer a property for sale until they hold a Contract for Sale that contains all prescribed documents. Some of these prescribed documents are third party searches that a Conveyancer obtains from Council and Water authorities. It’s for this reason that it’s important a Vendor instructs a Conveyancer to prepare a Contract for Sale before engaging an Agent. Generally speaking, a Contract for Sale can take 5-10 business days to prepare in full.

An Agent is considered to ‘offer’ a property for sale when they expressly or by implication:

  • indicate that the property is for sale by advertising or promoting it in any way, placing a sign on or near the property and/or having a description and/or photos on display at their office
  • advertise or indicate in any way that the property is to be auctioned at any future time
  • offer to sell the property
  • invite offers to purchase the property
  • show the property to a prospective purchaser
  • give the address to a prospective purchaser

If an Agent carries out any of the actions listed above, prior to holding a Contract for Sale that contains all prescribed documents, they are in breach of the Act and penalties apply.

Section 52 of the Property Stock and Business Agents Act 2002 states that an Agent cannot persuade someone to enter into a Contract by providing false or misleading representations or promises or by failing to disclose a material fact that they know or ought reasonably to know. A material fact is considered:

  1. If, within the last 5 years, the property has been subject to flooding or bushfire
  2. If the property is subject to significant health or safety risks
  3. If the property is listed on the register of residential premises that contain loose-fill asbestos insulation
  4. If, within the last 5 years, the property was the scene of a crime of murder or manslaughter
  5. If, within the last 2 years, the property has been used to manufacture or supply drugs
  6. If the building contains external combustible cladding to which there is a notice of intention to issue a fire safety order or building product rectification order
  7. Where a building work rectification order, prohibition order or stop work order is in force

The importance of disclosing a murder at a property was highlighted in the case of the Lin family who in 2004 were not told they were purchasing the family home of Sef Gonzales who had murdered his father, mother and sister in the home located at North Ryde just 3 years earlier. The ABC reported that the Real Estate Agents who sold the house without disclosing the history of the home were found in breach of the Act and fined more than $20,000.

Section 47 of the Property Stock and Business Agents Act 2002 states that an Agent has a duty to disclose:

  1. any personal or commercial relationship they have with anyone who they are referring the client too including a Conveyancer or mortgage broker
  2. whether they will or expect to derive any consideration, be it monetary or otherwise, from the person who they are referring too. If so, they must disclose the amount or value of the consideration

Section 64 of the Property Stock and Business Agents Act 2002 states that an Agent is permitted to do any of the following:

  1. Participate in exchange of Contracts;
  2. Insert the following information on the front page of the Contract – purchasers name and address, purchasers solicitors name and address, purchase price and Contract date; and
  3. Insert or delete from the Contract any description of any inclusions.

If in exercising these rights, an Agent causes a person loss, damage or expense due to any unauthorised action or any act of negligence or omission, they are liable to compensate that person.


Melina Costantino


Melina has over 9 years of experience as a Licensed Conveyancer, acting for client matters involving; purchase and sale of residential and commercial property, Retirement Village Contracts, Put & Call Options, Call Options, and Family Transfers. She is passionate about helping a wide range of clients across all aspects of the buying and selling process and ensuring that her clients meet all their legal obligations.

For further information please don’t hesitate to contact:

Melina Costantino
Licensed Conveyancer & JP
1300 268 887

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This blog is merely general and non-specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

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