CPPREP4001 - Prepare for professional practice in real estate (Release 1)

Work in the Real Estate Industry Report

Work in the Real Estate Industry Report

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What you need to do:

For this assessment task you will undertake research and report on various aspects of
working in the real estate industry. A template has been provided to you to use to
structure your report to cover all the required information.

You are required to answer all questions correctly. If correct, you will see ‘Satisfactory’ or if
incorrect you will see ‘Not Satisfactory’ in your grades section of your learner portal next to
the assessment name. The assessor will provide feedback and a Record of Results in the
assessment task once graded. You will be required to resubmit your work for any ‘Not
Satisfactory’ assessment tasks.

What you will need:

You will need to research information about real estate agencies to assist with your
responses for this task.

Use the learner material provided in your online student portal as well as research
materials such as books, internet, magazines, workplace documentation etc. to assist you
in gaining the knowledge required to answer the questions. Remember that the
assessment is completely self-paced and open book, so you can use whatever resources
you have to answer the questions.

What you need to submit:

Your completed report.

How to Submit your Assessment:

Upload your completed document into the “CPPREP4001 – Work in the Real Estate
Industry Report” Online Assessment in your learner portal. You can drag and drop the file
into the window or use the add file icon in the top left of the submission window and select
the file your wish to upload by using the browse/choose file option.

Click on finish attempt to submit it for grading.

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1. Real estate agency structure and personnel

You must address legislative liabilities and responsibilities (refer to appropriate sections of
the relevant Act for your state or territory) to answer the following;

1.1 Identify the various business ownership options

The most common business structures are as a sole trader to operate your business
alone. Partnership involves 2 or more people operating as a business as co-owners and
they will share the income as well as the expenses. Company is a distinct legal entity
separate from its shareholders or officers, can be Pty Ltd or Public.

1.2 Identify the services offered by real estate agencies

Real estate agencies provide different services. The two main ones are sales and
property management however there are other services real estate agencies can
provide. One of these are holiday letting which is common to agencies in a high tourism
traffic area. Commercial and Industrial leasing and sales is dealing with warehouses,
office spaces and retail premises. Home unit or land project marketing, these are like off
the plan sales which means the building hasn’t been built yet. Buyers agents which is a
service a lot of investors use especially if the investor is interstate or overseas. Rural
sales include selling of equipment and land which is commonly in rural areas.

1.3 Provide an outline of a typical organisational structure for a real estate agency.

There are various business models that agents may elect to work under including
Franchise Group, Independent and Membership. The main advantage of working under
a franchise group is the brand recognition. Advantages of independent agencies is that
you can run your business the way you want too. Membership groups are a medium
balance of the two.

1.4 Provide an overview of agency staff roles and responsibilities including administration,
agents and agent’s representatives and management.

There are many different roles within a real estate agency. The licensee in Charge is
responsible for supervising staff, trust accounting, business operating costs,
performance reviews etc. The salespeople will be responsible for selling, marketing,
inspections, negotiating with buyers on behalf of their sellers, overseeing contracts and
settlement processes etc. Property Managers are responsible in collecting rent, routine
inspections, leasing property and doing inspections, terminations, vacates, represent
owner at tribunal and arranging and overseeing maintenance etc. Support staff in an
office will be responsible for the completion of documentation, preparation of advertising,
uploading properties to websites, taking calls and enquiries, and anything else
salespeople and property managers need help with in the agency.

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1.5 Identify and explain the agency-principal relationship.

The principal is your client not the principal of your agency. The principal is whoever you
have the written agreement with. The real estate agent who is appointment by the client
must comply with the laws when conducting their duties, act honestly, fairly and
professionally, act within the conduct of a real estate agency practice, exercise
reasonable skill, care and diligence, act in the client’s best interests and protect client’s
assets and money.

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);

a)  Once both sides have negotiated the deal through, a contract of sale is signed by the
vendor and the purchaser. A legally binding document agreement between the parties,
the contract of sale is negotiated through solicitors or conveyancers.

b)  A tenancy agreement is a legally binding, written agreement between a tenant and a

property manager or owner.

c)  An agency agreement is a relationship between a principal and an agent, where the
principal authorises the agent to engage in third parties in legal relationships. Each party
in the agreement will have certain obligations.

1.7 Explain the agency’s obligations in relationship to sharing their commissions/licence

lending as outlined in the legislation for your state/territory.

The 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 licence with anyone that does not hold a real estate license.
Sharing of commission between two sperate agencies where the seller pays the listing
agent commission for the service of selling their property and the listing agent will share
that commission with another agency that acts for the buyer (but not as a buyer’s agent).
Where an agent works as a “buyer’s agent” the buyer would pay the agent the
commission for the service of finding them a property. In this case a conjunctional
agreement with the listing agency would not be an option as this would be a conflict of
interest.

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1.8 What are the repercussions for agents/agencies performing real estate activities whilst
being unlicensed? Refer to the relevant section(s) of the legislation in your answer.

Acting as an unlicensed real estate agent can attract a penalty of up to $28,750- or 2-

years imprisonment.

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2. Key Agencies and Industry Bodies.

Provide a detailed overview of the following agencies (refer to your own state or territory
where required), including any legislative powers they have.

2.1 Consumer Affairs (VIC)/Fair trading (QLD & NSW)/Consumer Protection (WA)
The OFT aims to deliver and fair and safe market place by monitoring traders for
compliance and targeting high-risk areas to deter non-compliance, licensing traders to
operate in certain regulated industries, conciliating disputes to obtain redress for
consumers, investigating possible breaches of legislation including taking enforcement
options as appropriate and educating traders and consumers on their rights and
obligations. An OFT inspector has legislative powers to carry out our role. They can in
certain circumstances compel agents to provide information and records such as bank
statements, or they can make application to a magistrate for a search warrant. In certain
circumstances they can freeze trust accounts or appoint a receiver over the trust
property. The legislation allows them to recover a receiver cost which is typically
anywhere between $30,000 and $160,000. Inspectors from the OFT can conduct
unannounced trust account compliance checks.

2.2 Civil and Administrative Tribunal (VIC, NSW & QLD / State Administrative Tribunal
(WA)
The QLD Civil and Administrative Tribunal (QCAT) is established under the Queensland
Civil and Administrative Tribunal Act 2009. Civil and Administrative Tribunal deals with a
broad and diverse range of matters, from tenancy issues and building works, to
decisions on guardianship and administrative review of government decisions. It is a
single point of access for specialist tribunal services providing services that are prompt,
accessible, economical, and effective.

2.3 Estate agent’s council/property board/Industry Body

The Real Estate Institute in each state is the peak industry body for real estate agents
and property professionals. The largest and most influential association of its kind, the
industry body represents thousands of agents across the state. With a track record and
reputation for delivering valued products and services, it promotes and responds to the
changing needs of members and boasts over 100 years of experience.

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2.4 Residential tenancies bond authority/board

The RTA is the Queensland Government statutory authority that administers the
Residential Tenancies and Rooming Accommodation Act 2008. The RTA is responsible
to the Minister for Communities and Housing, Minister for Digital Economy and Minister
for the Arts. The QLD government is providing the RTA with a grant to fund our
operations. Rather than being invested to earn interest, bond monies received from
customers are now held in an operating bank system that is not subject to fluctuations in
global financial markets. They work with all sector groups including tenants, property
managers and owners, community and industry stakeholder groups and the QLD
government.

2.5 Real Estate Institute of Australia (REIA).

The Real Estate Institute of Australia is the peak body and national association for
Australia’s real estate profession. REIA is a politically non-aligned organisation that
provides research and well-informed advice to the Federal Government, Opposition,
members of the real estate profession, media and the public on a range of issues
affecting the property market.

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3. Legislative requirements
3.1 Identify the legislation that regulates the real estate industry, including property sales
and management.

  Property Occupations Act 2014 and Property Occupation Regulation 2014

  Agents Financial Administration Act 2014 and Agents Financial Administration
Regulation 2014
 Queensland Civil and Administration Tribunal Act 2009
 Residential and Rooming Act 2008

3.2 What are legislative licensing and eligibility requirements for a) administration staff, b)
principal agents, c) salespeople and d) property managers?

In order to legally perform the duties for administration staff, principle agents,
salespeople, and property managers, individuals must meet the fair-trading real estate
requirements and hold a registration certificate or real estate license. This involves
completing the required training and meeting certain eligibility and suitability
requirements stipulated by the Office of Fair Trading.

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.

It is unlawful to discriminate on the basis of a number of protected attributes including

age, disability, race, sex, intersex status, gender identity and sexual orientation in certain
areas of public life including education and employment. Australia’s federal anti-
discrimination laws are contained in the following legislation:

 Age discrimination Act 2004

 Disability Discrimination Act 1992
 Racial Discrimination Act 1975
 Sex Discrimination Act 1984

These apply to day to day real estate activities to ensure that an agent must not
discriminate against anyone, or harass them because of their age, gender, race,
etc.

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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.

Students should demonstrate knowledge of the standards relevant to their state or

territory.

Property Agents and Motor Dealers (Real Estate Agency Practise Code of Conduct)
Regulation 2001.

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 objective of this code is to increase the accountability of real estate agents for their
actions in carrying on the business of a real estate agent. The objective is achieved by
setting conduct standards for real estate agents, establishing principals for fair trading in
real estate agency practice, and providing for a system of complaint resolution for
complaints about real estate agency practice.

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 all
agents, the obligation 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 client’s best interests
6. Agent is act in accordance with client’s instructions
7. Agent to keep client informed of developments
8. Agent to ensure employees comply with Act of 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

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4.4 Research and examine the foundation for ethical practice applicable to real estate and
explain its relationship to ethical behaviour.

Ethics are moral principles that assist one to determine right against wrong. ethical
behaviours rely not only complying with rules, but by using values and virtue to guide us
through decision making. This sets out minimum standards, occupational ideal,
principles and virtues which must not be compromised by real estate professionals. The
prestige of any professional body depends to a very great extent upon the ethical
standards observed by its individual members, both in their association with one another
and in their relationships with the community in general and therefore all members have
a duty to conduct their business in a manner which will effectively uphold and enhance
the reputation of the Real Estate Agency profession.

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5. Employment Agreements
5.1 Name and explain the types of employment arrangements that are commonly applied
in the real estate industry.

Enterprise agreements and modern awards contain minimum entitlements for wages
and conditions for employment for anyone working in the real-estate industry. The
National Employment Standards are minimum standards that cannot be overridden by
the terms of enterprise agreements or awards.

If you are not covered by an agreement, your minimum wages and conditions are likely
to be set by a modern award. The modern award will deal with minimum wage rates,
annual leave and annual leave loading, other types of leave, hours of work, penalty
rates, overtime and casual rates, allowances, consultation, and any other minimum
requirements.

5.2 What is the purpose of the National Employment Standards in reference to employers
and employee rights and responsibilities.

The National Employment Standards are the minimum terms and conditions for
employees in the national workplace. They are a set of 11 minimum entitlements which
must be provided to all national workplace system employees in Australia. The national
minimum wage and the NES make up the minimum agreement or other registered
agreement can’t provide for conditions that are less than the national minimum wage or
the NES. They can’t exclude the NES. Employers have to give every new employee a
copy of the Fair Work Information Statement when they start their new job. Employers
also have to give every casual employee a document copy of the Casual Employment
Information Statement as the same time.

5.3 What are the employers’ responsibilities regarding employment arrangements in real
estate?

The employers responsibilities regarding employment arrangement means the employer

must understand employment related legislation and your obligations towards the people
who work for them. Employers must observe all legal requirements for giving employees
safe and healthy work. It is also a requirement to investigate work hazard reports and
take corrective actions. Under the Work Healthy and Safety Act 2011, you must assess
risks and implement and review control measures to prevent or minimise exposure to
the risks. Every Queensland employer must have workers’ compensation insurance.
Employers must comply with legislation, issues such as tax and pay, annual leave and
time off, and the rights of parents are all covered by employment legislation and must be
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paid fairly to employees across your business. Employers must know and comply with
their employee tax obligations including withholding an amount from payments made to
them, to cover their income tax, any Higher Education Loan Programme repayments,
and the Medicare levy. Under the PAYG withholding system, the employer must report
and send all amounts withheld to the ATO. The employer must pay their employees
correctly, ensure the employee receives everything they are entitled to as an employee
under the law in accordance with Modern Awards, Written Agreements and Commission
only employment. The employer must ensure employees are receiving the correct leave
entitlements. An employer must make superannuation contributions for each eligible
employee under the law. An employer is legally obliged to make sure staff are trained to
do their jobs safely, employers should keep a record of any training completed by staff.
Employee records must also be kept private and confidential for 7 years.

5.4 What are the employee responsibilities regarding employment arrangements in real
estate?

Employees have responsibilities including 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/confidentiality of personal information
held by the agency and to comply with codes and standards for ethical conduct and
professionalism.

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6. Communication Strategies
6.1 Identify and detail (3) communication strategies/skills that are required for professional
practice in real estate to build client relationships.

Communication strategies can be verbal, nonverbal, or visual. Integrating all the

strategies together will allow you to see the most success. This allows a business to
meet employee needs and increase workplace knowledge. Verbal communication
strategies can be broken down into written and oral communication. Written strategies
consist of avenues such as email, text, and chat. Examples that fall into the oral
category are phone calls, video chats and face to face conversations. Nonverbal
communication strategies consist of mostly visual cues, such as body language, facial
expressions, physical distance between communicators, or tone of voice. These cues
are typically intended however, it is important to realise the message you are sending.
Visual communication strategies can be seen through signs, webpages, and
illustrations. These strategies are used in the workplace to draw attention and provide
documentation. Human resources are required to post certain visuals throughout the
workplace to comply with safety laws.

6.2 Identify and explain communication strategies which can be used to address client
complaints.

When addressing client complaints there are communication strategies to be used to

help this. Firstly you want to listen and understand exactly what the problem is and let
the client know they have your full attention. Acknowledge the problem and being
sympathetic and calm will help alleviate the customer’s stress. Address the client’s
needs and telling them you want to help improve the situation and asking how they
would like to proceed will help the overall situation. By communicating honestly with
clients, you can decide what can be done to fix the problem. Lastly following up with the
client within an agreed time frame to will ensure the problem has been resolved with the
client.

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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 licence and certificate of registration

holders to undertake Continuing Professional Development (CPD. Outside of mandatory
continued professional development it is important to improve your knowledge and
understanding of the business and real estate practices, as legislation and guidelines
regularly change. Continuing professional development is typically a stipulated
membership requirement with industry bodies such as, REIQ.

7.2 Identify and record 3 opportunities and priorities for continuing professional
development.

Continuing professional development is crucial for example, in NSW, all individuals who
hold a class 1 license, class 2 license or a certificate of registration must complete the
CPD specified for their license or registration category each year. Failure to comply with
your CPD requirements may result in the suspension or cancellation of your license or
certificate. So by not keeping up to date, you may risk having your license suspended or
cancelled. Another opportunity for continuing professional development is to refresh
unused skills and keep updated with changes. Another opportunity and priority for
continuing professional development is to change ways of thinking. Professional
development opportunities expose you and your team to new voices, fresh approaches,
and new perspectives. Relevant CPD can be the thing to bring new ideas and practises
to your organisation and can improve performance.

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