Change text size:  Increase font size  Reduce font size  |  Print page:  Print this page
  |  Contact us   
 
property_agents_and_managers
English

Sale of business 

Agency agreement terms

1. Identification of property 

The agreement must specify the address of the property to which the agreement applies or must contain a description of the property sufficient to clearly identify it. 

Top of page

2. Names of parties to agreement 

The agreement must specify the names of each of the parties to the agreement, including the licensee. 

Top of page

3. Information identifying the parties 

The agreement must specify the address of the person on behalf of whom the agent is acting, the licensee’s licence number and any business name under which the licensee conducts business.

Top of page

4. Authority of the person on behalf of whom the agent will act to enter into agreement 

The agreement must contain a statement to the effect that the person on behalf of whom the agent is acting warrants that the person has authority to enter into the agreement.

Top of page

5. Authorisation for licensee to act on behalf of person 

The agreement must include a term containing particulars of the extent of the licensee’s authority to act as agent on behalf of the person they are providing services to under the agreement.

Top of page

6. Period of duration of the agreement 

The agreement must contain a term indicating the period for which the agreement remains in force or indicating that the agreement remains in force until terminated. 

Top of page

7. Termination of the agreement 

If the agreement provides for its termination by a party to the agreement, the agreement must indicate how and when it can be terminated.

Top of page

8. Reimbursement of licensee 

If the licensee is to be entitled to any sum or reimbursement for expenses or charges incurred by the licensee in connection with services provided under the agency agreement, the agreement must include a term that:

  • states that the licensee is so entitled
  • describes those services
  • specifies the amount that the licensee is so entitled to and when it is payable
  • states that those services and amounts cannot be varied except with the agreement in writing of the person on behalf of whom the agent is acting. 

Top of page

9. Remuneration 

 The agreement must include a term specifying:

  • the circumstances in which the licensee is entitled to remuneration (by way of commission or otherwise) for services performed under the agreement, and
  • the amount of the remuneration or the way in which it is to be calculated, and
  • when the remuneration is payable. 

If the agreement provides for the payment of commission calculated as a percentage of the sale price, the term must also specify the amount of remuneration to which the licensee will be entitled calculated on the basis of a specified estimated sale price.

Top of page

10. Exclusive agency and sole agency agreements 

If the agency agreement is an exclusive agency agreement the agreement must include the following statement:

IMPORTANT: This is an exclusive agency agreement. This means you may have to pay the agent commission even if another agent (or you) sell the property or introduce a buyer who later buys the property. 

If the agency agreement is a sole agency agreement the agreement must include the following statement:

IMPORTANT: This is a sole agency agreement. This means you may have to pay the agent commission even if another agent sells the property or introduces a buyer who later buys the property. 

An agency agreement is an exclusive agency agreement if the agreement provides for the agent to be entitled to commission on the happening of an event whether or not the agent is the effective cause of the happening of the event and whether or not the client is the effective cause of the happening of the event.

An agency agreement is a sole agency agreement if the agreement provides for the agent to be entitled to commission on the happening of an event (whether or not the agent is the effective cause of the happening of the event) unless the client is the effective cause of the happening of the event.

A statement required to be included in an agency agreement by this clause must be included in the agreement immediately following the term about remuneration and must be no less prominent than that term. 

Top of page

11. Warning about other agency agreements 

The agency agreement must include the following statement:

WARNING: Have you signed an agency agreement for the sale of this property with another agent? If you have you may have to pay two commissions (if this agreement or the other agreement you have signed is a sole or exclusive agency agreement).

A statement that this clause requires the agency agreement to include must be about remuneration or immediately following the statement about exclusive and sole agency and must be no less prominent than that term or statement. 

Top of page

12. Warning if agreement includes a term that a commission is payable 

From 1 March 2015 inclusive, if the agency agreement includes a term that a commission is payable even if the sale of the property is not completed, the agency agreement must include the following statement (immediately after that term) and the statement must be no less prominent than that term:

WARNING: The term immediately above provides that a commission is payable under this agreement even if the sale of the property is not completed.

Top of page

13. Transfer of liability for the leasing or hire purchase of inclusions 

The agreement must include any written confirmation prepared for the purposes of clause 3 of the rules of conduct for business agents of any specific instructions given to the agent by the person on behalf of whom the agent is acting before the agreement is entered into about arrangements for the transfer to the purchaser of any liability for the leasing or hire purchase of goodwill, plant, fittings or stock in inventory included in the sale.

Top of page

14. Specific instructions about marketing and inspections 

The agreement must include any written confirmation prepared for the purposes of clause 3 of the rules of conduct for business agents of any specific instructions given to the agent by the person on behalf of whom the agent is acting before the agreement is entered into about any of the following:

  • the marketing of the business
  • the entitlement of prospective purchasers to inspect the premises of the business and the circumstances under which such an inspection can be made
  • the entitlement of prospective purchasers to inspect records, books of account and other documents concerning the business and the circumstances under which such an inspection can be made.

Top of page

15. Sales inspection report to form part of the agreement 

The agreement must include a copy of any sales inspection report prepared by the agent and given to the person on behalf of whom the agent is acting, as required by the rules of conduct for business agents.

Top of page