PRDRE25A/POD63A/ABH 501 & 502 (Phase 1)

Real-estate Laws

Book introduction to sales & property management page 8 & 9

For question 1 under page 3 PRDRE25A/POD63A/ABH 501 & 502 (Phase 1) January 2003

Agents have a duty of care, a code of conduct, best market price

Agents can be a deterrent to potential burglars and physical threats.
Agents have advantages with bulk advertisings, signs, window, internet, etc
Agents are in a strong position to find finance on behalf of customers
Agents are trained to negotiate and reduce conflict “third go between”
Agents do not get paid commission unless property has been sold.
Sell your property under a sole agency with us still giving you private sale option.

An agent has a duty of care to the (seller client) of a property. The most important duty is to provide the
client the best possible price for their property.

The agent does this by informing their client to what is the current market place or trend.
The agent has powerful tools at their finger tips, such as sales strategies types of advising campaigns,
newspaper advertising and the laws governed by advertising, internet advertising, signage advertising, on
shop window advertising and conjunctions with other agents and leaflets advertising in mail drops or flyers
handed out to potential buyers to help achieve the best possible price for the seller. The agent generally has
cheaper rates when it comes to advertising because of bulk advertising. Advise on marketing the property in
a why of showing sellers by upgrading their property such as cleaning the home maintaining gardens etc.
The agent is always updating on a continuous basis with laws, code of ethics the latest in technologies in
title searches and zonings and keeping up with what is taking place in the council strategies or state and
federal government strategies in the planning of council areas like new roads, updating on industrial areas,
new bylaws, new subdivisions Etc. This is also covered in when the agent has a duty of care to the
(customer or buyer) when looking to buy property, because the seller may over price their property. This
can also be achieved by the agent for the seller and buyer by doing title searches within the area and by
contacting the governor generals dept for the latest price risers or arrange banks to come out to give a bank
valuation etc.

Agents must inform the clients about an agent’s code of ethics and that an agent must abide by these laws
within the code of ethics. An agent is liable and has a legal recourse through the panel tribunal for
compensation.
Agents should be covered by insurance in the event of litigation.
Agents who recommend trades people should always supply three different business under that particular
trade and must make sure that the trades person has a qualification under their trade. No unqualified
trade’s person is allowed to be recommended by an agent,

There are not many services that provide or offers advise for services before a property is for sale even
when a property does not sell the seller had obtain free advise

Sellers or clients can raise the price of their property at any time before a contract has been signed while
under an agents listing even at last minute of a sure transaction.

Property management
Rent roll is a term used to describe the number of properties that an agent has under rental management.
Because the properties are returning a guarantee rental income to the agent, the rent roll is the most
valuable asset in the real-estate business. One of the principle roles of a property manager is to build a large,
stable rent roll to guarantee income to the business.

Book introduction to sales & property management rent roll page 35

For Question 1 & 2 page 9 PRDRE25A/POD63A/ABH 501 & 502 (Phase 1) January 2003
A rent roll is a number of tenanted properties that a property management business has in its rental listing.
A Property management business depends upon its survival from tenanted properties it takes care of and the
rent roll is the most valuable asset it has. The bigger the tenancy the bigger the rent roll “Money” the more
“Good will” the property management has as an “Asset”. If Both Property management and real-estate sales
are combined this would dramatically increase the advertising “Bulk advertising” at cheaper rates more staff
employed allowing more hands on doing multi task operations in the office allowing more time for sales and
the principal more time to do other tasks. This would ultimately be attracting more clientele to the business.
People who rent their properties with an agency who taken good care of their property renal wise will
generally sell their properties through that agency which would inturn create more good will to the business

Vacancy rate is a term used to describe the ratio of let to unlet properties on the agent’s rental books.
For instance, if only two properties are unlet out of a total pf 100 properties on the agent’s books, then
vacancy rate is 2%

The Residential Tenancies Authority the RTA

Property managers or agency when handling tenants bond monies must lodge to the bond money within 10
days after a receipt has been issued to the tenant to the RTA,
Bond money cannot be released to the tenant until the RTA has received written notification from the lessor
or agent and that the lessors on the prescribed form those monies are to be released and apportioned as per
the instructions on the form.

Rental monies can be refunded to the lessee at any post office.

Advice can be sorted about the act under the RTA through a telephones service or by the internet on
www.rta.qld.gov.au

If Disputes cannot be resolved between the lessor and lessee by the RTA it would be a matter for the small
claims tribunal to resolve.

The RTA has the power to prosecute parties for non-compliance with the RTA act through a magistrate’s
court.
The small claims tribunal will not hear claims against an agent who is considered a professional and
therefore must be represented through either a magistrate’s court or PAMD tribunal. Most matters are
heard at a PAMD tribunal as most complains relating to an agent will be PAMD legislation or a breach of
the code of conduct.
All tenancy agreements must be agreed in writing which can only be approved by statutory documents.
The Tenancy agreement will specify the term of the tenancy, which gives the tenant the right to sole and
exclusive possession of the property for a specific period of time

The lessor must give the tenant “quite enjoyment” of the property for a period of their occupancy. These
requirements impact not only on the property managers but also on sales people.
Two types of residential tenancy fixed term & periodic.

A fixed term tenancy has a beginning a start date and an end date both parties the lessor and lessee are both
contractually bound. If either party ends the tenancy agreement they are in breach and penalties will apply.
If either party wish to end the tenancy at the expiry dates (the end date) they must give at least 14 days
notice. Notice to leave by lessor is on RTA form 13 notice of intention to leave. Agent or lesser is giving
notice: RTA form 12 notice to leave. At the end of a lease neither party has to give reasons why they want
to end tenancy vacates or ends the lease at the end of the lease by the leaser.

A periodic tenancy there is no formal agreement for a set period of time for occupation.
A periodic lease generally takes over a fixed term lease where the fix term lease has not been renewed. If
the fixed term expires and neither party the lessor nor agent gives notification to the lesser to terminate the
tenancy, then the fixed term agreement automatically reverts to a periodic tenancy on expiry.
If either party wishes to end the periodic tenancy the lessee must give 14 days notice RTA form 13 notice
of intention to leave.
If the agreement is being terminated by the lessor “without ground” then the lessor or their agent must give
two months notice RTA form 12 notice to leave
If the property has sold the lessor can give notice to leave which is a 4 week period 28 days notice
The RTA Act impacts on agents for them to notify lessees when a property if being placed on the market.
Clause 37 in the code of conduct states
When an Agent accepts an appointment to sell a property which is tenanted, the agent must give a written
notice of the appointment to the managing agent. It will then be the managing agent to notify the tenant
of the selling agent’s appointment.
The lessee must be issued with a RTA form 10 Notice of intention to sell.
No Agent can enter or contact the tenants until the managing agent has issued RTA Form 10.
The managing agent of the tenanted property may ask the selling agent for a copy of the form 22a
Appointment to act as a real-estate agent before issuing this RTA form 10
The act acknowledges that agents other than managing agents may require entry to the tenanted property
these agents are known as secondary agents. The secondary agent is required to issue their own notices and
to provide the managing agent with a copy.
The agent must give the lessee at least 24 hour notice in writing RTA form 9 Entry notice before
conducting an inspection with a prospective buyer. This notice must be issued for every inspection

Real-estate is land and its fixed improvements such as buildings, landscaping, fences, pools, dams,
vegetation whatever is attached to the land by nature or man made. An improvement by man must be
actually improve or enhance the value of the land Such as these types attached to the land mentioned
above.
Any fixtures that are attached to the land are that fixtures. Fixtures are things such as houses, sheds
attached to concrete sometimes large statues television aerials, satellite dishes in ground pools and irrigation
pool filters, pool pumps & pool motors, including pool hoses are consider fixtures. Disputes can arise when
portable cleaning equipment, like Creepy crawlies and brushes etc are kept by the seller.

Some real-estate comes with inherited rights that are associated with the land. These can be tenancies,
council approvals, encumbrances, any matters that effect how people can use the land. These are generally
known as encumbrances.

A chattel is an article that rests on the ground by its own weight which is not permanently fixed or
attached to the building. A chattel means it’s not fixed. Like carpets curtains, lights, Statues, pot plants,
swings, some barbeques, etc. Always check with seller what is staying and what is not so you can write it
down on the contract.
Torrens title, all registered titles freehold ownership in Australia is based on the Torrens system.
Traditionally there were two titles issued over the land. One title remains with the owner and the other
remained at the state registry office. All transactions over the property had to be registered on both copies
of the titles. The land title act regulates the Torrens title system of the land ownership in QLD.
Two Predominant forms of land ownership are freehold & leasehold.

Freehold property (fee simple) Property owner has full rights of ownership. A property owner can sell,
will it, transfer it, or be in heritable. The crown reserves some rights to freehold land. The crown can
grant prospecting & mining licences over any form of land holding.

Estate for life can be granted to a tenant for the term of life. Usually created by a will, the holder for life
estate holds it for the duration of their life. They can rent the property or profit of the land. On their
death, the life estate ends and reverts to the person entitled to it. This usually is the beneficiary under a
will who would make application to have the land transferred back into their names in (simple fee).
The life tenant is obligated to maintain the land, not to commit acts of waste, which can diminish its value.

A lease is an agreement in writing granting exclusive permission to use property in return for the payment
of rent.
A lessee (tenant) is persons or entity whom has been granting exclusive permission to use property in return
for the payment of rent.
A lessor (landlord) is the person or entity that grants a lessee exclusive permission to use property in return
for the payment of rent.
Freehold can be still sold subject to existing tenancies.
Crown leasehold where the crown is the lessor and the lease becomes crown leasehold. Most pastoral
leases in QLD are Crown leases. A statue governs the condition of such a lease. Crown leasehold may be
of a limited duration or it may be perpetual. A perpetual lease does not en less the lessee nominates to end
the arrangement.

A title deed registers; buyers have to nominate how they wish to own the land.
(1 Sole entity 1x person) (2 Corporation) (3 Partnership 20 x people or less) (4 Syndicate) (5 Joint tenants
Married or multiple) (6 Tenants in common) or Trust (Family trust, Unit trust, Superannuation trust,
Property trust)

Joint tenancy when two or more own undivided interest in a single estate and the interest of the co-tenants
are equal in the eyes of the law and subject to the right of survivorship. If one owner dies the remaining
owner assumes ownership. This is conveyed through transmission of title by death. An owner under joint
tenancy can only be left by will to heirs or become part of a deceased estate when the last surviving owner
has died.
Joint tenants have equal rights of procession and the use of the jointly owned property.
When a joint tenancy established “four unities” are required to exist. There must be 1 unity of interest, 2
unity of title 3 unity of time and 4 unity of possession. This means the parties to the joint tenancy must
enter the agreement at the same time under the same title with equal property interests and equal rights
of possession.

Tenants in common if the way a property is to be held is not specified at the time of transfer it is assumed
it is held as tenants in common. The “four entities“do not exist, so different titles can be created for
different shares of the property. Co owners can hold different percentages of shares in the property. Each
person or entity can dispose the proportion to which they own whenever they want to whomever they want.
Usually there will be heads of agreement signed to give the other co-owners first rights to refusal.
There is no right to survivorship when under tenants in common, only property share can be willed, sold
or gifted by its owner. Tenants in common sort after by business partnerships, re-marriage, and de-facto
relationships as it preserves the interests of each partner in the property.

1 Title an original certificate of title included

2 The volume (book) and folio (page) number.
3 The real property description (commonly called PRD) eg, Lot 477, on registered plan no.166115, this is a
more definitive identification of the land than the street address.
4 A reference to the original deed of grant which preserves rights and interests of the Crown.
5 The date when the title was issued.
6 A location plan which identifies the land in relation to the street and the compass direction.
7 Any registered easements and other encumbrances over the title.
8 If the property is mortgaged, the name of the mortgagee.

Transaction notification certificate: Certificate of title is now being phased out and is now replaced with
computerised documents known as transactions notification certificate.

Encumbrances are any restrictive or registered dealing over the title. It is an interest or right that
someone has over the land that reduces the value, but does not necessarily prevent the conveyance of the
land by the owner. If the encumbrance is to be inherited by the new buyer, then it must be declared on the
contract of sale. An encumbrance can be a covenant, easement or a caveat, or tenancy.

Covenant is a promise or an agreement given under a seal whereby one party promises to do or not do
certain things, like not too build high so as to block views, two build uniformity with existing neighbouring
houses, too control to some extent the use of adjoining or neighbouring land, (council bylaws) the keeping
of cats etc.
Covenants could be looked at as a type of encumbrance; Covenants can be enforced by the QLD
parliament 2001. Agents must be sure to declare any restrictive covenants on contracts, full discloser.

Easement is where a person’s right to use certain land belonging to another person on their land.
Easements are an encumbrance to a property. Easements can materially disadvantage or devalue a property.
The buy may terminate the contract in these circumstances and require a full refund.
Easements running through a property are regarded as a defect on the title of the property.
It is essential for an agent to ask property owner at the point of listing are there any easements they are
aware of. Non disclosure could jeopardize the sale of their property. Common easements are sewerage,
drainage and powerlines. Unusual easements are rights of way, easements for light, easements for the flow
of water, and access through some else land. It is now common in new subdivisions for the council to hold
easement rights over the property it can give authorisation to other entities like Energex or Telsra to use the
easement.
It is recognised that creating that the granting of an easement creates interest in the land. The property with
the easement on it is known as the servient tenement and the property that benefits from the easement is
known as the dominant tenement. The owner of the dominant tenement can lode a caveat over the servient
tenement to protect their interests.
One of the remedies for a breach of or disturbance of an easement is known as abatement, which is self
help remedy. Example a person builds a wall across a path way over which you have right of way. You
may lawfully remove the obstruction. If any loss or damage occurs to the person who wrongfully placed
the wall there, they have no right to complain since their own wrongful act justified your action in removing
it.
Caveat means literally “beware” warns people that another person may have an interest registered in the
land. No further transactions can be registered until the matter has been dealt with first. A person claiming
interests may lodge a caveat forbidding the registration of any dealing affecting the land. The register is
frozen under a caveat until caveat is removed either by agreement or court action.
To lodge a caveat, the caveator (a person who enters a caveat) must have a recognized interest in the
land. Some examples are
1 The interest of a purchaser after signing a valid and binding contract of sale. This could be particularly
applicable if it is a long term contract such as commercial or industrial sales.
2 Interests of an equitable mortgagee is a person who advances money on the security of an unregistered
mortgage.
3 Interest of a grantee of an easement prior to the registration of the easement.
4 interest of instalment contract. In this situation, the buyer cannot have clear title to the property until they
have paid the equivalent of one third of the price of the property. To protect their interest, they will lodge a
caveat to prevent the owner from mortgaging the property or selling to some one else.
5 Interests in an ownership dispute especially relating to divorce, partnership dissolutions or dispute
amongst beneficiaries of a deceased estate.

Caveats are lodge through a legal process. If the owner of the property disputes the caveat, the matter will
be heard and entered through the magistrate’s court. If a caveat is removed after being lodge without
reasonable cause, then the person who was adversely affected or who may have suffered any losses
because of the caveat can claim compensation for damages.

People who are owned money cannot place a caveat over property such as commission’s, bills, and
contractors unless agreed upon. People who are owed monies have a right of action for damages, not an
interest in the land.

Mortgages is a legal document pledging of things removable or immovable as goods or land as security for
payment of money (Trimboli)

Originally, a mortgage involved the transfer of the legal estate in the land by the mortgagor (owner) to the
mortgagee (lender) in order to secure the repayment of a dept owed by the owner to the lender.

A modern mortgage constitutes not only a charge over the real property of the mortgager but is, in
effect, a contract between those parties. The relevant terms of the mortgage are referred to as personal
covenants and they can be enforced as such.
Under a mortgage the land itself remains in the name of the owner and the interest of the mortgagee is
noted on the certificate of title. A mortgage is not considered as an encumbrance. The mortgagor can pay
out the mortgage over the title at the same time settle.

Mortgage insurance is a policy to protect the borrower the lender against loss, mostly financial
institutions.
Mortgage insurance is normally required for borrowers who have less than 25% deposit to invest in the
transaction. The mortgage insurer will reimburse the lender for the total amount of the loss, which may
occur, also Include costs of selling the property, repairs and maintenance costs, unpaid rates and body
corporate fees etc.
Mortgages in possession: to protect their interests in the case of default by the borrower, the lender will
obtain a court order to take possession of the property. The mortgagee is bound by law to act in the best
interests of the borrower under these circumstances, if the borrower dispossesses the property, the
mortgagee must attempt to secure a true market price in a subsequent sale. Auction is usually the
preferred method of disposal.
Deposits: Generally it is preferred method that a 10% deposit of the purchase price (part payment of the
property) be place on the property for sale, is where a buyer shows goodwill or genuine intent to the seller to
purchase the property. However a contract can be completed without a deposit. For instance, bank
guarantees are a popular form of deposit in the commercial and industrial sector. In many real-estate
transactions, deposits are underwritten by insurers who guarantee the risk on behalf of the buyer.
Accepting more than 10% deposit can have the affect of creating a “terms contract” which may require
the issuing of Notices to remedy default before a seller can terminate a contract should the buyer default.
These are commonly called instalment contracts.

Default: Is where a party to a contract has failed to meet their contractual obligations. This may be a
buyer or a seller, in the case of a contract for sale of real property. When a default has occurred, the
common law has remedies for the breach of contract. These depend on the individual circumstances
involved in the case. These remedies include:
Sue for specific performance (a court order to enforce the completion of the sale)
Sue for damages (if a loss has been sustained).
Rescind the contract (this returns the transaction to its beginning as if a contract never existed).

Date; before putting a Date on a contract always make sure that both parties the seller and buyer are
content with all agreements and that the buyer has the ability to obtain a mortgage or has sufficient funds
before placing a deposit down. Once a date is down on the contract and both parties have obtain a copy of
the contract the contract obligations begin from that date.

Settlement is when both parties fulfil the obligations of their contract. Most residential sales is when the
buyer pays the remainder of the balance to the seller, inturn the seller hands over the title of deed.
There is a provision in the contract of sale for completion (settlement) date to be stated. This can
sometimes be a negotiation point when putting a contract together.

Commission is usually not payable until settlement has been completed. Money cannot be released from
the trust account without the authority of the person who is entitled to it-in this case it is normally the seller.
Once this authority has been received in writing, the agent must (account to all parties) who have a claim
on the money in their trust account before they pay themselves commission.

Settlement in QLD is normally 30 to 60 days from the date of contract. In preparing the contract
document agents should ensure an actual date is inserted. This ensures certainty in the contract terms. Care
should be taken to avoid putting the date on the weekend Sat or Sun or public holidays. If the date is
inserted then section 61 of the property law act automatically extends the contract to the next day of
business unless the contract stipulates to the contrary.
Settlement will take place normally where the title is located. In the case of a property subjected to a
mortgage, settlement will normally take place where the mortgagee specifies (e.g. bank chambers or
solicitors’ office).

Trust account” an agent required under the property agents & motor dealers act to maintain two bank
accounts, these are 1
The general account Monies that have

The trust account; an agent is required to bank all monies in a trust account such as
1 Sales and rental deposits, 2 Bonds and rental monies, 3 advertising monies received in advance, 4 monies
received in advance for searches and other costs to be incurred at a later date by the client.
Any monies received by an agent must be banked no later 5pm on that working day or if weekend or
public holiday the next working day to bank monies received. The exception is a country town where the
agent has 5pm on the next working day to bank monies received. Trust account monies cannot be released
without written notification from all parties to the transaction.

No party has exclusive or legal right of trust account monies; the agent cannot use the monies to earn
interest. However, if the contract of sale is more than 60 days, the PAMD act does provide for trust
account monies, with written instructions from all parties to a transaction, to be invested in a special
trust account that can earn interest on behalf of the parties to the transaction.
Trust account receipts are where an agent must issue a trust account receipt if they receive any monies
that must be place into a trust account. A receipt can only be in the approved form and must have a
heading that states, “Property Agents and Motor Dealers Act Trust Account Receipt”

Vendor terms involved a contract where the property owner finances the buyer for either all or part of
the purchase price. This would usually be in exchange for holding a mortgage over the property just as
any other financier would. The terms of the contract are agreed to privately between the seller & the buyer.
A contract will be negotiated providing payment of the purchase price and interest over a period of time.
For instance, it is common for the repayment to be made by an initial deposit (remember this can be 10%)
and residue of purchase monies plus interest paid by weekly, monthly or quarterly instalments over a period
of years.
These are sometimes referred to as instalment contracts; Agents find these arrangements very popular
during a credit squeeze. They are also popular in commercial tenancies where a tenant negotiates to buy the
freehold from the landlord. Vendor terms are also common for the sale of rural properties, where the buyer
can take possession, work the land, and finance the repayments through income earned from the land.

Unit 4; Responding to an enquiry & taking instructions.

Record business enquires and directs it to the appropriate person for assistance.
Understand the legal requirement for taking instructions
Under take a search to con firm the ownership, and ascertain information required for a valid property
listing.
Book introduction to sales & property management page 40, 41, 42
Written question page last page about receiving a enquiry over the phone.
Under question 3 page 10 of PRDRE25A/POD63A/ABH 501 & 502 (Phase 1) January 2003

When any enquiry first comes to the office I would (1) respond with politeness and courtesy, (2) ask how I
may be of assistance to you. If it is important then I would (3) maintain a listing post until the other person’s
has explained why they have contacted us and what there needs are if any and (4) respond as quickly as
possible.
While talking to a customer or client I would be either (5) taking notes on either an enquiry slip or (6)
register on the computer system depending on the polices of the business, office procedures and the nature
of the enquiry (7) depending on whom the call is direct for or what classification the call needed to be
directed to. If the call pointed at different personnel in the department such as property management,
principal, business broker, other fellow salespersons within the business, or (8) Direct the call to clients who
maybe expecting outside calls then I would direct it to them. If those personnel where not in the office I
would either (9) pass on information by a way of instruction notes left on the desk by other co workers for
people expected to call and directed the caller from there by a way of telephone number for them to ring of
address to meet at the same time take (10) name of person and (11) phone number and (12) what the enquire
was about. If the enquiry was a property enquiry such as a listing, appraisal, advice or a buyer I would
record the enquiry ask their name, (13) address, and phone or email if any and take all notes on what
property they are interested (14) record all notes and assist from there. Once enquiry was completed say
thankyou for contacting our agency