REIV warns agents over REA fees

REIV warns agents over REA fees

12 August 2014 by Staff Reporter 6 comments

The Real Estate Institute of Victoria (REIV) has warned its members they could be in breach of state legislation if they accept a proposed fee from in return for sales figures.

REA Group offered agents 7.5 per cent of their subscription fee to the real estate marketing website in return for information about sales, provided they signed an agreement by September 1.

REIV chief executive Enzo Raimondo sent a letter to agents across the state saying they could be in breach of the Estate Agents Act, as well as the Crimes Act, if they kept the fee from REA.

“We have considered the issues raised and formed the view that there are potential legal risks for members in connection with the proposed arrangements,” REIV said in the letter.

“Whether the retention of fees will actually breach either the Estate Agents Act or the Crimes Act is a matter that needs to be considered by each estate agent in light of their own personal circumstances.

“It is the REIV’s strong recommendation that you do not sign the REA ‘Service Agreement’ until you obtain independent legal advice.”

Speaking to Real Estate Business, Mr Raimondo said the REIV sought legal advice on whether “the reward reducement” carried a risk for their members if they signed the REA contract.

“And the advice came back that there was potentially a risk that if they didn’t pass on any of the money they received it could be a breach of the Estate Agents Act,” he said.

“We wanted to make sure members were fully aware of what they were doing; sometimes incentives are not always what they seem.”

In response to the allegations, a REA spokesperson told Real Estate Business, “we are comfortable our Services Agreement meets legal obligations in each state in which it is being offered.”

“If agents are in any doubt about the appropriate treatment of it or have any concerns, they should seek independent professional advice.”

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