Important new laws will be coming into play for one state, which will give property managers and their clients “ultimate contractual freedom” to negotiate commission rates.
The new Queensland laws will replace the Property Agents and Motor Dealers Act 2000, which has grouped the regulation of several industries together for more than 13 years.
Fair Trading executive director Brian Bauer confirmed the government had set 1 December 2014 as the commencement date.
“Key changes for the property industry include the removal of the cap on real estate commissions, the deregulation of some licence classes, the streamlining of forms, and the incorporation of a simplified warning statement into contracts for the sale of residential property,” he said.
Speaking to Residential Property Manager, Real Estate Institute of Queensland (REIQ) chief executive Antonia Mercorella said while a majority of provisions in the Property Occupations Act focused on residential sales, there were also important changes for property managers.
“One of the biggest changes for property managers is that commissions will be deregulated when the new laws come into force on December 1,” she said.
“Maximum allowable commission rates for residential property management services are currently prescribed by legislation.
“This will be abolished, giving property managers and their clients ultimate contractual freedom to negotiate commission rates.
“This means property managers will be able to negotiate commissions that better reflect market conditions and the quality and scope of services being offered,” she added.
Ms Mercorella said another important change for property managers is that it will be much simpler for property managers and their clients to end their contractual relationship.
“Either party will be able to provide 30 days’ written notice or less where mutually agreed,” she said.
“At the moment, parties are required to give a maximum notice period of 90 days, but no less than 30 days.
“The greater contractual freedom in this area will be welcomed by both parties,” she added.
Queensland property manager and Jam Property managing director Loretta Morgan said she was “jumping for joy” when she heard about the changes.
“On the current forms you had to split it up into two sections, you had to do your rent collection commission, which can be no more than five per cent, and then you had to separate your management fee commission,” she told Residential Property Manager.
“Basically it is going to make it a hell of a lot easier for property managers to fill out a management agreement because it is one form and the commission is not capped.”
Ms Morgan said she thinks the deregulation of commission is going to have many property managers thinking they need to drop their fees.
“Well I see it as quite the opposite,” she said.
“I see it as an opportunity to really charge what you are worth, but you really need to show the value in that.
“If you are going to charge a big fee, you need to show your clients and your customers why you are charging that.
“I know that when you do the number crunching and you actually work out your time and doing your job properly, you cannot do a good job for less than eight per cent commission - it is impossible,” she added.