Work in the real estate industry report

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Griffith University *

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CPPREP4001

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Management

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Jan 9, 2024

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1.1 Identify the various business ownership options There are a number of business structures as summarised below: Sole Trader - An individual trading on their own. Partnership - As association of people or entities running a business. Company business structure – A legal entity separate from its shareholders Trust business structure – A relationship where a trustee carries on the business 1.2 Identify the services offered by real estate agencies Within the real estate industry a wide range of services are offered which include; Residential sales – the sale of land, property, homes, apartments, units and townhouses Commercial sales – The sale of land and property zoned for commercial or business purposes Industrial sales – The sale of land got industrial/factories/warehouse type business Business Sales – The sale of an actual business or income producing enterprise Residential property managements – The leasing and management of residential property Project Management – The sale or leasing of multiple properties on behalf of a developer Commercial, Industrial and Retail Management – The leasing and management of property used for retail, business, commercial, and industrial purposes Strata Management and Community Management – The management of developments on behalf of an owners corporation or neighbourhood association with common property Stock station and Agency – The sale, leasing and management of rural land as well as livestock Buyers Agency – Locating and securing property for buyers On-site residential property management – The leasing and management of property within a specific development where office is also located Holiday lettings – Leasing and management for short term periods to casual occupants Valuations – The sworn valuation of land and property. 1.3 Provide and outline of a typical organisational structure for a real estate agency. There are multiple structures for a Real Estate Agency. A typical structure would be a Franchise. A franchise is an agreement or license between two parties. The first party is the franchisee, who is given the rights to market a product or service using the trademark of the other party, the franchisor. An example of this is Ray White. Each Ray White Agency has to operate within standards and rules that are set out by the franchisor and a percentage of commission is paid to that party in return (a franchise payment). The benefits of this type if structure include brand name and reputation, group purchasing power and the level of support that comes around marketing, Operational

setup and Training. On the flip side there can be significant costs involved, they do come with restrictions and there can be limited growth potential. 1.4 Provide an overview of agency staff roles and responsibilities including administration, agents and agent’s representatives and management Agency staff roles include; Administration Agents - Responsible for the management of paperwork while complying with legal paperwork procedures, scheduling appointments with clients for final walkthroughs, and acting as a liaison for all involved stakeholders to provide excellent customer service Real Estate Agents – Responsible for facilitating transactions, inducing negotiations, presenting properties and accompanying prospective buyers during property inspections. Writing vendor reports, appraising properties, preparing contracts and documents, and facilitating settlements. Agents representative and management – Acting for a licensed estate agent, and with written authority, can perform any of the legal functions of that estate agent. For example, an agent's representative can act as a salesperson or property manager, but cannot operate an estate agency business. Business Agent – Selling, buying or otherwise dealing with or disposing of a business as week as dealing with the shares or interests in the business. Strata Managing Agent – Exercises any functions of an owners corporation within the meaning of the Strata Schemes Management Act 1996. This will include coordinating AGM’s, preparing budgets, and using levies to owners. Community Managing Agent – Engaged to exercise the functions of an association constituted for a scheme under the Community Land Development Act 1989. This will include preparing and distributing meeting notices, agendas and minutes, advising on expert matters and keeping financial accounts. On site Residential Property Manager – An Agent who is responsible for giving possession of a residential promise under lease, license or contract and collects all related fees. Buyers Agent – Acting on behalf of a buyer to find a suitable property for purchase. Prohibited from acting on behalf of both buyer and seller. 1.5 Identify and explain the agency-principal relationship In this relationship, the clients who are the owners of the property are referred to as principals. A real estate Agent (the agency) has many obligations, including; -Acting honestly, fairly and professionally - Acting with the conduct of a real estate agency practice - Exercise reasonable skill, care, and diligence - Act in the clients best interests - Protect the clients assets and money - Comply with their fiduciary (implied by common law) and contractual (as outlined in the contract/agency agreement) duties

In addition to the above, an Agent/Agency must also comply with all relevant legislation, as well as their clients instructions – unless it is unlawful or unreasonable to do so. 1.6 Identify parties to the following real estate transactions. a) Contract for sale of House and Land b) General tenancy Agreement c) Agency agreement (appointment of Agent) Contract for sale of House and Land The parties involved will be the buyer (the person or business purchasing the land title) and the seller (person or business selling the title). There will also be lawyers or conveyancers for both the buyer and seller involved in the transaction. b) General tenancy Agreement The parties to this arrangement will include the lessor, the tenant, and the Landlord or Property Manager c) Agency agreement (appointment of Agent) The parties will include a principal and an agent. 1.7 Explain the agency’s obligation in relationship to sharing their commissions/license lending as outlined in the legislation for your state/territory. An agency can share the commission they earn from the sale of property with any person that holds the necessary registration certificate of license. They cannot share commission or lend their license with anyone that does not hold a real estate license. Division 3 s116 of the Property Agents and Motor Dealers Act 2000 (QLD) 1.8 What are the repercussions for agents/agencies performing real estate activities whilst being unlicensed? Refer to the relevant sections of the legislation in your answer It is crucial that anyone who carries out real estate activities holds a current license at all times. Failure to do so can lead to prosecution by the OFT, as well as an inability to claim a fee or commission. (REIQ article_The implications of not holding an appropriate license). Section 12 of the Property Occupations Act 2014 (Qld) states that the objects of the Act are twofold: firstly, to provide a system for licensing and regulating property agents or residential letting agents and for registering and regulating real estate salespersons. The second stated aim is to provide a way of protecting consumers against undesirable practices associated with the promotion of residential property. Section 89 of the Act provides that a person is not entitled to sue for, recover or keep a reward or expense for the performance of an activity as a property agent unless, at the time the activity was performed, the person held a property agent license. Retaining or suing for commission when not properly entitled to do so can attract a maximum penalty of 200 penalty units or $26,690. Acting as an unlicensed real estate agent can also attract a penalty of up to $26,690.

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2. Key Agencies and Industry Bodies. Provide a detailed overview of the following agencies, including any legislative powers they have. 2.1 Fair Trading (QLD and NSW) The Office of Fair Trading is the Queensland Government agency responsible for regulating the real estate industry. The OFT uses a range of activities and powers to promote and enforce the law which include;  educating businesses and consumers about the law  working with industry groups to promote good practices  licensing or registering participants of some industries and not-for-profit sectors  taking court action for serious or repeated breaches of the laws we administer  addressing less serious matters with less severe solutions. The range of enforcement options and remedies include;  official warnings  infringement notices (fines)  civil penalty notices  enforceable undertakings  administrative actions (show causing, conditioning, suspending or cancelling a licence or registration)  public warnings or naming  court orders and injunctions court or tribunal action (prosecution). The OFT has a range of enforcement options and remedies, many of which can be actioned without a court order. They can also apply to a court to make certain orders and the court then decide whether to issue an order ort a fine based on the strength of the complaint or application from the OFT. They can also prosecute or commence tribunal action if;  the alleged breach is in the most serious categories of offending  a business repeatedly reoffends or breaks an enforceable undertaking  the business elects to take the matter to court  it would be in the public interest. Breaches of Fair Trading Laws generally lead to a prosecution in a court rather than action in a Tribunal. 2.2 Civil and Administrative Tribunal

The Queensland Civil and Administrative Tribunal (QCAT) is an independent, accessible tribunal that efficiently resolves disputes on a range of matters. In particular focus to the real estate industry they can assist with disputes between tenants, landlords, lessors or agents. The QCAT Act sets out a legislative framework and provisions to enable QCAT to fulfill its statutory functions. At the end of a proceeding the tribunal makes a final decision, or an agreement is reached by the parties. Decisions made by the tribunal must be followed and are enforceable as if they were made by a court. 2.3 Estate Agents council/property board/industry board The Real Estate Institute of QLD (REIQ) is QLD’s peak body for the real estate industry, representing the profession for more than 100 years. The REIQ is governed by a Constitution which sets out rules and guiding principles for the organisation. The REIQ's enduring purpose is to ensure real estate professionals stay a step ahead by leading a sustainable industry that continues to make significant contributions to the Queensland economy and to strengthen conditions for those working within the industry. 2.4 Residential tenancies bond authority/board The Residential Tenancies Authority (RTA) looks after the laws which protect the rights and responsibilities of tenants and landlords/agents. The RTA can provide dispute resolution assistance when a notice to remedy breach form is issued by either the tenant or lessor/agent and if the matter remains unsolved they may make a non urgent application to QCAT. 2.5 Real Estate Institute of Australia The Real Estate Institute of Australia (REIA) is the professional body for Australia’s real estate sector. Providing real estate customers and agencies with a credible source of knowledge and considered opinion about residential sales and rental property markets, through sought after business commentary and high-quality research reports. 3. Legislative requirements 3.1 Identify the legislation that regulates the real estate industry, including property sales and management. Property Agents and Motor Dealers Act 2020 Property Occupations Act 2014 (QLD) and Regulation 2014 (QLD) Residential Tenancies and rooming accommodation act (2008) QLD Residential tenancies and rooming accommodation regulation (2009) QLD Director General's Guidelines for Continuing Professional Development 2013 (via OFT website) Fair Trading Act 1987 and Regulation 2007 Agents Financial Administration Act 2014

Queensland Civil and Administration Tribunal Act 2009 Retail Shop Leases Act 1994 3.2 What are the legislative licensing and eligibility requirements for a) Admin staff, b) principal agents, c) salespeople and d) Property Managers Admin Staff – Should be registered due to the contact with the Agency’s clients and customers Principal Agents – Required to hold Real Estate License Salespeople – Certificate of Registration Property Manager – Certificate of Registration 3.3 Name the equal opportunity and anti discrimination principles and laws applicable to real estate and explain how they apply to day to day real estate activities As a real estate agent, you are constantly engaging and interacting with various stakeholders such as colleagues, members of the public, clients, builders, and other professionals. It is imperative to have a thorough understanding of types of discrimination and ensure that they do not factor into any communications or dealings. The applicable legislations that apply to the real estate industry are: The Racial Discrimination Act 1975 (Cth) Sex Discrimination Act 1984 (Cth) Anti Discrimination Act 1977 (NSW) Age Discrimination Act 2004 (Cth) Disability Discrimination Act 1992 (Cth) Australian Human Rights Commission Act 1986 (Cth) 4. Ethical and professional conduct standards (Code of Practice) 4.1 Identify and name the legislation relating to ethics and professional conduct of real estate agents. The applicable legislation relating to ethics and professional conduct is: Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 Other applicable legislation includes: Property Agents and Motor Dealers Act 2000 (QLD) Fair Trading Act 1987 Privacy Act (1998 (Cth) Competition and Consumer Act 2010

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Division 4, s 119 of the Property Agents and Motor dealers Act stipulates that a regulation may prescribe a code of conduct about resident letting agent practice that may include setting standards, establishing principles for fair trading and providing a system of complaint resolution. This is further elaborated in Part 2 of the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 - General rules of Conduct. Overall, a Real Estate Agent has many factors to consider and comply with to ensure that they are acting in an ethical way with all parties, & compliant with all legislation. 4.2 Discuss the objective of the regulations set out the standard of conduct expected of licensees and real estate salespersons in their day to day dealings with clients (sellers and landlords) and consumers (buyers and tenants). The object of the code is to increase the accountability of real estate agents for their actions in carrying on the business of a real estate agent. It protects their clients from conducting any unethical business & stipulates the general rules that they must abide within. Some examples of such practices for clients include; Complying with all fiduciary obligations Acting in their best interests (unless it is unlawful to do so) Not accepting any appointment to act or continue to act if there is an interest in conflict. Some examples of such practices for consumers include; Not engaging in any conduct that is fraudulent or misleading – eg not misrepresenting a property in marketing material or any other communication Not applying high pressure tactics, harassment, or unconscionable conduct – eg taking advantage of a buyer or tenants apparent lack of understanding with paperwork 4.3 What are the obligations contained in this legislation? According to Property Agents and Motor Dealers (Real Estate Agency Practise Code of Conduct) Regulation 2001, under schedule 1 general rules of conduct applying to agents, the obligations contained in this legislation are; 1. Knowledge of Act and code 2. Fiduciary obligations 3. Honesty, fairness and professionalism 4. Skill, care, and diligence 5. Agent to act in clients best interests 6. Agent to act in accordance with clients instructions 7. Agent to keep client informed if developments. 8. Agent to ensure employees comply with Act and Code 9. Representations by employees 10. Fraudulent or misleading conduct 11. High pressure tactics, harassment or unconscionable conduct 12. Claiming membership or endorsement 13. Conflict of duty or interest 14. Soliciting through false or misleading advertisements or communications 4.4 Research and examine the foundation for ethical practice applicable to real estate and explain its relationship to ethical behaviour.

The foundation for ethical practice is making decisions and interacting with the world by not only complying with ‘rules’ and ‘cultural norms’ but by having a deeper value system that guides us in conjunction with these. Ethics are at the base of what people feel to be right and wrong. A Real Estate Agent, by virtue of the type of work that they do, is a role that has a particular focus on ethical behaviour and doing what is right and fair. Furthermore, the reputation of an Agent can be built upon or diminished purely based on decisions made around ethical behaviour. This then has a significant effect on the wider Agency that an Agent is a part of, as the reputation of an Agency will only be as strong as that if its Agents. Therefore, all Employees of an Agency carry this obligation, no t only for themselves, but to strengthen and uphold that of the broader Company. 5 Employment Agreements 5.1 Name and explain the types of employment arrangements that are commonly applied in the real estate industry 1. A Wage - Enterprise Agreements and modern Awards contain the minimum entitlements for wages and conditions of employment for anyone working in this industry. 2. Wages with commission, bonus or incentive payment 3. Commission only 5.2 What is the purpose of the National Employment Standards in reference to employers and employee rights and responsibilities The NES are a set off minimum standards (11 entitlements) that cannot be overridden by the terms of an enterprise agreement or Award. Employers must give every new employee a copy of the Fair Work Statement when they commence, or a copy of the Casual Employment Information Statement for casuals. 5.3 What are the employer’s responsibilities regarding employment arrangements in real estate? Employers must understand employment related legislation and their obligation towards their Employees. The obligations include: Work Health & Safety Legislative compliance Tax obligations Pay and entitlements. Leave entitlements. Superannuation Legal obligations/compliance with training Record keeping 5.4 What are the employee responsibilities regarding employment arrangements in real estate? Employees have responsibilities including but not limited to;

To know and comply with the conditions of their employment To take reasonable care to protect themselves and others that may be affected by their actions, from risks to health and safety while at work To obey lawful orders To comply with requirements for privacy or confidentiality of personal information held by the Agency To comply with codes and standards for ethical conduct and professionals 6. Communication Strategies 6.1 Identify and detail 3 communication strategies that are required for professional practice in real estate to build clients relationships 1 – Establishing rapport is critical to build trust and show the other person that you are genuinely interested in getting to learn more about them. By asking open ended questions and allowing them the space to respond where you actively listen and (mentally) take notes, you will quickly build a good understanding of the other person which in turn allows you to focus your energy on addressing what they need to know in your response, creating a meaningful conversation. 2 - Non verbal communication – This is all about body language and often subconscious cues that will often give the receiver just as clear of a message – if not clearer – than your verbal communication. Mot of the good work of asking an open ended question will be undone if you are not making eye contact, look disinterested, or seem distracted while they are responding. 3 – Visual strategies such as websites, signs and in print marketing. Professional branding and consistency is imperative to impart a professional image. Ensure there are no spelling errors, all advertisements are formatted perfectly and branding/colour etc are always unform. 6.2 Identify and explain communication strategies which can be used to address client complaints Dealing with complaints is a part of many roles and the approach that is taken has a significant impact on the magnitude of the overall problem and the success of the resolution process. A 10 step approach to address conflict is asking questions – analyse expectations – recognise different perspectives – Identify mistakes – watch out for emotional triggers – Focus on precenting escalation – keeping it under control – be committed to a resolution - de escalate the conflict & stay calm. 7 Continuing Professional Development 7.1 Research and explain regulatory requirements for continuing professional development for real estate personnel. It is a mandatory requirement in some States for license and certificate of registration holders to undertake CPD. Failure to comply with CPD requirements my result in the suspension or cancellation of the Agents license or certificate 7.2 Identify and record 3 opportunities and priorities for continuing professional development

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There are numerous opportunities for Agents to up skill including in house training sessions through their Agency, magazine/industry subscriptions, audio/podcasts, or additional formal training on specific areas such as negotiation.

Work in the real estate industry report

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