Deep North Agents “Re-licensed” to Practise Real Estate Law

[Author – Tim ODwyer]

From July 1st last year the role of Queensland real estate agents in preparing contracts was severely limited by law. Sit back, dear readers, as I now blow the whistle on an extraordinary government back-flip.

Remember when the Beattie government back-stabbed real estate consumers who had been ripped-off by over-priced property marketeers?Beattie & Shine

In December 2002 amendments to the Property Agents and Motor Dealers Act (PAMDA) retrospectively prevented marketeering victims claiming compensation from a government fund. This fund, having already paid some victims’ claims, had inadequate reserves to meet those already filed apart from an avalanche to come.

Five years later, almost to the day, history repeated itself when the Bligh government retrospectively shafted all real estate consumers – buyers, sellers, landlords and tenants. How? With a regulation (backdated to 1st July 2007) intended principally to permit legally unqualified agents to continue to prepare legally binding contracts.

Clearly to protect agents (and other PAMDA licensees and their employees) the Bligh government on 14th December 2007 promulgated the Legal Profession (Transitional) Amendment Regulation (No. 1). This emasculates until 1st July 2008 a small part of the Legal Profession Act 2007 – Section 24(2)(e).

Last year the Beattie government described this sub-section as “tightening the reservation of legal work exemption for property agents” insofar as Section 24, in reserving legal work – such as contract preparation – for lawyers provides, with some exceptions, that only qualified legal practitioners may “engage in legal practice”.

Last October I revealed in The Courier Mail that Section 24(2)(e) had since 1st July 2007 severely limited agents’ role in contract preparation. Agents and salespeople would not breach Section 24 (and face maximum fines of $22,500.00 or 2 years imprisonment) if they only filled in details in pre-printed contracts or other documents, and did not give advice about the contracts, documents or details filled-in. This meant, in my view, that agents could no longer lawfully add clauses, conditions or annexures to contracts and the like. An enlightened government had curtailed for the benefit of consumers what had previously been green-lighted for the benefit of agents. Most conveyancing solicitors applauded this long-overdue reform of legally problematic real estate practices.

The Real Estate Institute of Queensland soon informed its members that it had sought early clarification from Attorney-General and Fair Trading Minister Kerry Shine while explaining to him how “the long-standing system of agents’ involvement in document preparation” had assisted in maintaining an “efficient contracting process”. According to the REIQ, the Attorney-General’s office advised this was “a minor amendment” with no significant changes from former legislation. Consequently the REIQ gave this assurance: “There is no ban on agents amending contracts and agents can still draft forms for everyday business use.”

No doubt Mr Shine has since received “please explain” communications from the Queensland Law Society and the Legal Services Commissioner. Neither was consulted about his extraordinary decision to give the foxes back their key to the chickenhouse by way of a regulation partly resuscitating Section 24 of the repealed Legal Profession Act 2004. This had provided simply that you could engage in legal practice if you were “a person preparing or assisting in the preparation of a contract if … prepared by a real estate agent.” What smooth-talking Sir Humphrey persuaded former practising solicitor Shine to sign off on this licence to practise real estate law? Perhaps the Attorney remembered what fellow former solicitor Peter Beattie, as a back-bencher, said in 1992: “Retrospective legislation should be enacted only when a benefit is passed on to someone.”

At the time this unexplained back-flip occurred the Law Society was already investigating for the Legal Services Commissioner a test complaint against an REIQ agent who had added a deceitful clause to a sale contract in alleged breach of Section 24. The Commissioner may be well advised to let the investigation continue and, if warranted, to prosecute the agent concerned – notwithstanding that the regulation may be raised in defence. A definitive court ruling is needed, not only on the less-than-clear drafting of Section 24 of the 2007 Act, but also on the validity and certainty of this transitional but over-riding regulation.

Meanwhile many lawyers support the Gold Coast District Law Association’s call for agents to be prohibited from any part in contract preparation. While Queensland Law Society president Megan Mahon agrees that real estate consumers “should be guided by professional legal advice at every stage”, Gold Coast president Ted Skuse cites “recurring problems with agent-prepared documents” especially where agents’ additions have eroded buyers’ rights. Even where agents have only filled in details, as permitted by Section 24(2)(e), Mr Skuse points to frequently unrealistic time frames which present serious risks for contracting parties and their conveyancing solicitors.

For my part, I sent Attorney-General Shine details of two recent examples of agent-caused (but now reprehensibly excused) contractual mischief: One where a condition had to be satisfied by time “31st February 2008” (!), and the other where an added clause outrageously gave the agent the right to lodge a caveat over the title to the property sold to secure his commission.

Real estate consumers desperately need to be properly protected from agents’ incompetence, recklessness and cunning. But don’t hold your breath waiting for any responsible Queensland government to provide this protection. And don’t expect the REIQ to call the Bligh government’s retrospective regulation “discriminating and unfair” as it did the Beattie government’s backdating exercise.

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