Tougher penalties for real estate agents and property managers in WA

5 minute read  25.02.2020 Lee Rossetto, Minal Naran, Connor Taylor

Amendments to the Real Estate and Business Agents Act 1978 (WA) (Act) have come into effect, which have increased the maximum fines that may be imposed (in instances of some of the more serious contraventions) to as much as $100,000. The maximum penalty of two years' imprisonment has also been introduced in relation to certain trust offences.


Key takeouts


Amendments to the Real Estate and Business Agents Act 1978 (WA) have come into effect as part of a suite of tougher consumer protection measures.

It has therefore never been more important for real estate agents in Western Australia to ensure that they have appropriate procedures and trust accounting safeguards in place.

We can assist agencies and developers by conducting a sample audit of their existing sales and property management business practices, and by documenting and supporting the implementation of clear, user friendly internal policies and procedures.

It has never been more important for real estate agents in Western Australia to ensure that they have appropriate procedures and trust accounting safeguards in place.

The changes to the Act are a part of a suite of tougher consumer protection measures, which have been introduced into various legislation pursuant to the Consumer Protection Legislation Amendment Act 2019 (WA). Many of the amendments to the Act are also reflected in corresponding changes to the Settlement Agents Act 1981 (WA). Other amendments have also been made to the Auction Sales Act 1973 (WA) and Residential Tenancies Act 1987 (WA), among others. 

We can assist agencies and developers by conducting a sample audit of their existing sales and property management business practices, and by documenting and supporting the implementation of clear, user friendly internal policies and procedures. Such steps can help to identify any existing issues, and substantially reduce the risk of penalties being incurred in the future.

Summary of key changes to penalties

From 1 January 2020, the maximum fine that can be ordered as a penalty has increased:

  • From $20,000 to $100,000 if:
    • a person operates a business as – or holds themselves out to be – a business or real estate agent without a licence and current triennial certificate; or
    • a licensee permits – or holds themselves out to be willing to permit – another person to use their licence or triennial certificate;
  • From $3,000 to $25,000 (in addition to a new prescribed maximum of two years' imprisonment) if:
    • trust account monies received in respect of a transaction are not withdrawn from a trust account for the purposes of the transaction, or as otherwise authorised by the Act or by the person entitled to the monies; or
    • withdrawn trust account monies are not paid to the person lawfully entitled or authorised to receive them;
  • From $3,000 to $25,000 if:
    • a person carries out the function of – or holds themselves out to be – a sales representative, if they do not have a current registration;
    • a person carries out the function of – or holds themselves out to be – a sales representative, or holds themselves out as being in the employ of a licensee or developer, if they do not act for or on behalf of a licensee who holds a current triennial or a developer;
    • a person breaches the trust account provisions contained in Part VI of the Act, including by:
      • failing to pay to the trust account any trust monies received by the agent, as soon as practical after such money was received;
      • failing to keep full and accurate accounts of all trust monies received or paid by the agent; and
      • failing to enter account particulars in relation to trust monies received or paid by the agent, by the end of the next business day after such money was received or paid; and
  • From $2,000 to $20,000 if a member of a licensee that is a firm, or a director of a licensee that is a body corporate, carries out the functions of a sales representative without holding a licence and triennial, or a sales representative registration.

Other changes to the Real Estate and Business Agents Act 1978 to note

Some of the other changes to the Act include that:

  • A licensee or sales representative's failure to comply with the prescribed educational requirements is now an offence, with a maximum penalty of a fine of up to $5,000; and
  • The Commissioner is now able to impose special conditions on an agent's licence or a sales representatives certificate of registration, at any point in time (rather than just upon its grant or renewal).

Many corresponding amendments, and increased penalties, now also apply to settlement agents under the Settlement Agents Act 1981 (WA).

Things to consider

These amendments have significantly increased the potential liability for trust accounting contraventions. It will be particularly important for agents to ensure that they are:

  • Maintaining proper trust account records;
  • Obtaining clear written authority for any authorised payment or release of trust account money, and maintaining a record of the same; and
  • Ensuring that procedures are in place to record trust receipts on a daily basis.

Licensed directors, agents and sales representatives must, as always, stay up to date with their registrations, renewals and CPD training.
Large property developers and their directors should consider their liability in relation to their sales and leasing operations, to the extent that those operations are conducted in-house. Particularly, developers should review and consider the extent that they maintain oversight over the employees that operate the sales or property management business, and the trust account.

Recommendations for real estate agencies and property managers

While the upper extent of these penalties are likely to be reserved for cases that involve intentionally dishonest or fraudulent conduct, there is also an increased liability that may arise from mismanagement or carelessness.

Agents and property managers have numerous statutory obligations, and without proper policies, procedures and oversight, contraventions of certain provisions may be overlooked, even systematically.

We recommend that agencies, as well as developers that operate their sales functions under a licence:

  • Conduct an audit of their sales and property management business;
  • Review their policies, procedures and risk management strategies; and
  • Carefully consider the safeguards they have in place to prevent trust account offences.

We can assist agencies and developers by conducting a sample audit of their existing sales and property management business practices, and by documenting and supporting the implementation of clear, user friendly internal policies and procedures, which can substantially reduce the risk of such penalties being incurred in the future.

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