Industry boss has ‘grave concerns’ about online middlemen

Agents have been warned they could be breaking the law if they register with real estate broking websites.

Real Estate Institute of South Australia chief executive Greg Troughton said it could be illegal for agents to pay middlemen to connect them to vendors.

The Land and Business (Sale and Conveyancing) Act forbids agents from paying any of their commission to someone other than a colleague or a registered agent, Mr Troughton said.

Breaches can incur a $5,000 penalty, he added.

“The ultimate question I have asked myself is this: can a court construe the various arrangements that these online companies propose regarding the fee the agent must pay to them as the sharing of a commission?” Mr Troughton said.

“Given that the purpose of this provision is to protect the integrity and interest of the consumer in a property transaction, then I think yes.”

Mr Troughton said he held “grave concerns” about these real estate brokers.

“Members are strongly advised not to partake in these activities – which could very well be a breach of the act,” he said.

Mr Troughton also encouraged agents to remove their images and names from these websites so they can’t be accused of endorsing them.

[Related: Agents criticise REISA naming, shaming portal]

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