AS A regulator, Fair Trading considers that consumers and businesses alike are best served by competitive markets in which businesses compete fairly for custom in compliance with the law.
NSW Fair Trading’s compliance efforts include a commitment to working with businesses and industry groups to promote voluntary compliance by providing information on how to comply with the law.
We have regulatory responsibility for the real estate industry sector under the NSW Property, Stock and Business Agents Act 2002 and other associated legislation, such as the Residential Tenancies Act 2010 and the Australian Consumer Law.
Fair Trading’s role includes licensing the industry, advising and educating businesses, protecting and educating consumers, and detecting and acting against non compliance.
The NSW real estate industry is well-established, and an overwhelming majority of real estate agents do the right thing. Although the number of complaints to Fair Trading about real estate issues has been relatively static over the past five years, the industry still accounts for approximately 35 per cent of all complaints that we receive.
Recently, several serious incidents relating to agents’ failing to deal appropriately with money held in trust on behalf of tenants and home buyers have occurred.
Every year, Fair Trading undertakes several hundred investigations of businesses operating within the NSW property industry. These investigations are undertaken as a result of complaints made to Fair Trading, a targeted compliance operation or a routine scheduled inspection.
During an investigation, Fair Trading’s investigators will identify themselves. All carry photographic identification. The investigators will usually first ask to speak to the licensee of the business.
Most investigations require investigators to inspect business records, which must be available for inspection at any time during business hours. In some instances, the investigators will request that the business provide a quiet area in which to work.
In most cases, the investigators will need to photocopy documents or take computer files.
Throughout most investigations, the investigators will be available to answer questions about compliance issues.
Typically, the business records required in an investigation will include:
- All licences applying to the business and the people working in the business;
- The business’ end-of-month financial reconciliations;
- Any financial audit reports and statements;
- Receipt books, cheque books and deposit book (deposit forms);
- Business policies and procedures;
- Recent sales listings and files;
- Procedures for the supervision of the trust account, if one is operated;
- Complaint handling procedures; and
- Documentation covering the handling of rental bonds
- No business model guarantees full compliance with the law in the property industry. Nonetheless, businesses that pay particular attention to the following principles can ensure at least that the basics of compliance are covered:
Ensure that all relevant staff complete continuing professional development courses;
- Have all real estate industry and business licences current and visible to staff and customers;
- Make accurate representations when marketing properties;
- Maintain records that substantiate the selling price on the property being advertised; and
- Have all sale documents complete before advertising a property.