• 11 Aug 2020
  • 4 min read
  • By Brian Bauer, Executive Director, Office of Fair Trading

Complete your appointment to act paperwork carefully

Form 6, Appointment to Act, Legislation

Queensland property agents know they mustn't provide any auctioneer or real estate services to a client for reward, until they've been appointed in writing via a PO Form 6 (Appointment to Act).

The PO Form 6 is a contract between you and your client, which sets out the rights and obligations of both parties.

The Office of Fair Trading (OFT) wants to remind REIQ Members of the fact their obligation to act only with their client's instructions does not end with the completion and signing of the PO Form 6. During recent compliance operations, the OFT noted issues in relation to listing prices and inaccuracies in other information in PO Form 6s.

To help agents do the right thing, some of the common issues found are detailed below.

Did you know Realworks has a template Form 6 for each real estate sector? Discover how Realworks can help your office today!

Varying the list price

Property agents must ensure they get written instructions from their client before varying a list price. The price is set initially in Section 3, Part 4 of the PO Form 6. If your client agrees to vary the list price after they sign the PO Form 6, you need to get this in writing. This could be via email or even by text message (SMS), but verbal confirmation is insufficient.

Verify the legal owner

Before being appointed, agents are advised to verify the legal property owner to make sure the person appointing you on the PO Form 6 is the registered owner of the property. You need to make sure you are only taking instructions from your client and that this person is who they claim to be and is legally able to make decisions about the property.

This is particularly important when selling properties during a divorce, which can complicate sale instructions. The OFT found in one recent instance the wife was the only person on the property title deed and she was the client on the PO Form 6. However, the husband was giving the sales agent instructions about changing the list price.

In circumstances like these, it's critically important to check who is entitled to be on the PO Form 6 and who you need to take written instructions from when selling the property.

Type of listing

Another anomaly picked up by OFT investigators was in Part 6 of the PO Form 6, where the type of appointment is indicated (i.e. open listing, sole agency or exclusive agency). OFT saw multiple boxes ticked, indicating both open listing and exclusive agency with nominated start/end dates.

While clients can change their mind, it must be clear on the PO Form 6 exactly what type of listing the client has agreed to and from what date. When both open and exclusive listing are ticked, it becomes confusing for everyone involved about what type of appointment it is and, particularly for an exclusive listing, when that appointment ends.

Clarity around commission

During a recent audit, OFT investigators picked up a commission noted on the PO Form 6 text which stated "2.95 per cent of the contract price, negotiable on all sales at time of contract". This isn't acceptable. To use wording like this, the agent would've needed to provide further explanation on the PO Form 6 about what "negotiable" means in this situation, who negotiates, under what circumstances does the negotiation take place, and how much could the commission vary.

The OFT hopes REIQ Members find this information helpful. Remember, you can minimise the risks to yourself and your clients by:

  • verifying property ownership;

  • keeping accurate, clear and transparent records; and

  • referring to your records to confirm key details (such as matching signatures).

More information about the PO Form 6 can be found on the OFT's website. If you have further queries, you can contact the OFT by phone on 13 QGOV (13 74 68) or email them directly at BrisbaneOFT@justice.qld.gov.au

Did you know in Realworks there is a template Form 6 for each real estate sector? Streamline your office's paperwork by discovering how Realworks can help.

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