14.05.2020 at 00:04
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Agent Prevails in Court Battle Over Commission Rules

A Victorian agent has emerged victorious in a court case where the vendor tried to avoid paying commission. And much to the relief of the Real Estate Institute of Victoria, which was named as the second defendant.

On 15 April 2015, St Kilda Estates (No 2) Pty Ltd  signed an Exclusive Sale Authority with Melbourne Property Investments Real Estate Pty Ltd. This ESA included a rebate statement providing that the agent was entitled to commission on the sale. Melbourne Property Investments Real Estate then marketed and sold the property on behalf of St Kilda Estates, though was not paid the commission due under the ESA.

The problem was that section 49A of the Estate Agents Act 1980 (Vic) requires certain information to be included in exclusive sales authorities and rebate statements as a precondition of agents recovering commission. In this instance, the rebate statement differed from the approved form of the document in that the heading was entitled ‘Item 6. Rebate Statement – Section 48A-E of the Act’ rather than the approved heading of ‘Rebate Statement – No Rebate will be Received’.

The vendor argued that this meant the ESA rebate statement was not ‘in the form approved by the Director of Consumer Affairs Victoria (the Director) under s.49A(6)’. If the court agreed that the rebate statement contained in the ESA was not in the form approved by the Director, then the effect of s.49A(6) was that the agent could not sue for commission.

The agent claimed it used a rebate form downloaded from the website of the Real Estates Institute of Victoria (REIV) and relied on it as being compliant with the Act.

Judge Marks of the County Court of Victoria found that the omission of the words ‘No Rebate will be Received’ in the heading) did not matter. She found that provided the ESA rebate statement was in the form approved by the Director, it did not fail to comply with s49A(4) merely because it did not contain the exact statements referred to in s49(4)(a) or (c).

The court decided that in any event, where information is required to be conveyed in an approved form, it is sufficient if the information conveyed is substantially the same as the approved form. 

The judgment did not reveal the nature of the agent’s case against the REIV. Presumably it was in negligently failing to provide a form that complied with the Estate Agents Act.


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