In this blog we explain the new FORM 6 changes coming on 01 May 2024 for QLD Real Estate Agents...
This video/blog is great for QLD real estate agents. This is a MAJOR UPDATE to the law around QLD Property Appointment forms - with the Form 6 having a complete overhaul. LISTEN UP - IT COULD COST YOU YOUR COMMISSION!
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Hi everybody - George Sourris, Empire Legal.
Today's topic: New Form 6 Appointment Form updates - coming 01 of May 2024 for QLD Real Estate Agents.
If you're reading this blog or wathing this YouTube video at its release date (11 April 2024), you have less than three weeks before this new law comes in.
Let's unpack what you need to know.
The REIQ released a webinar on 25 March 2024 about Property Occupations Appointment Forms. There are two new appointment Form 6's which MUST be used from the 01 May 2024. This is all governed by the Property Occupation Act Property Occupation Act 2014 QLD. There is also a new Form 6A which is for commercial sales and commercial management - but for the purposes of this blog we are focusing on the Form 6 only and not the Form 6A.
Transitionary Period. What form do I use?
A FULLY EXECUTED Form 6 PRIOR to the 1st of May 2024 is OK. These agreements will be valid and will be enforceable until the expiry or termination of that appointment. So, if everything's all signed up by all parties before 01 May 2024 you're all good - no action required.
For a PARTIALLY EXECUTED - now that is NOT OK. The Form 6 will need to be fully signed on the old Form 6 document PRIOR to 01 May 2024. Otherwise if it is partially executed, it will have to be redone with the new Form 6 documentation, from 01 May 2024. So, if it's partially signed, throw that one in the bin, start a brand new one on 01 May 2024.
Note - any Form 6 that expires and needs to be renewed MUST be prepared with the reappointment on a new Form 6. As outlined by REIQ, if you use the wrong form, there is a risk that your appointment will not be valid. Now, this is important guys, without a valid appointment, then arguably the client will not be required to pay a commission for your services.
Now let's quickly look at these new Form 6 changes page by page -
Page 1
Page 1 of the new Form 6 (this is parts 1 & 2) which is the Client Details and the Licensee Details section.
There's no major updates.
It now includes language to include "buyer's agents" and there's a new heading "residential sales and purchases, leasing and property management".
Remember to check client ID - that it matches the title search exactly, and that the person is authorised to deal with the property. So, for example - power of attorney, company director - make sure you're getting the trustee, doing an ASIC search, and getting a copy of a power of attorney, etc.
Effectively - identifying the client and making sure they have a right to sign the documentation on the Form 6.
Page 2
You've got parts 3 & 4, which is the Property Details and Appointment Details.
No major changes.
This section addressed the property details & the type of appointment. The agent must verify the client details and property ownership. This includes service term, price, and instructions.
Page 3
This is parts 5 & 6, which is the Termination and Property Sales.
There's, again, no major changes.
You'll see termination of appointment - 90 days for real estate sales only, and you can select whether the appointment is exclusive, open, or sole.
Page 4
This is part 7 - Commission.
There's a minor change here, the wording is including GST, has been bolded.
As per the Property Occupations Act, commission needs to be expressed in a GST inclusive manner. But again, residential agents, you already know this, this is the norm, this is what already happens. You need to stipulate commission payable and when it is payable.
Page 5
This is part 8 - Authorisation to Incur Fees, Charges & Expenses.
Section 2 is expanded for property managers. The value for emergency repairs is stated to be four weeks rent in accordance with Section 219A of the Residential Tenancies and Rooming Accommodation Act 2008 (QLD).
Page 6
This is part 9 - Signature and Reappointment.
No changes.
Remember, the first six pages of the Form 6 are prescribed and MUST be used. This is of course, governed by the Office of Fair Trading.
REIQ Schedules and Essential Terms & Conditions.
In Realworks, there are additional Schedules and Terms & Conditions. A reminder regarding any reference any schedules and annexures that you're attaching, i. e. marketing schedules, etc - they must be listed.
REIQ has also updated the 7 REIQ Schedules to match the new Form 6 updates.
The Schedules are going to be available to REIQ members through the "resources" section. Completed examples of each version of the REIQ Schedules will be available on the REIQ portal from 01 May 2024.
Okay, so, how do we update these forms?
Well, good news, the information in the old Form 6's will automatically populate in the new forms. This is through Realworks. Just a note, we're not experts in Realworks. In fact, we've never actually used it. But, you should have a Realworks expert / guru in your real estate office - so I'd have a chat with them!
At the time of writing of this content, the go-live for these updates are less than 3 weeks away. It's important that real estate offices have a plan in place to make sure they are ready for the changes.
When all these changes are live, Realworks users will be prompted to update all Property Occupation Form 6's that are in draft and or template stages.
New provision for agents relying on property information provided by the client.
Listen up guys, this part is important.
The client gives a warranty about the information provided in the relevant annexures and indemnifies the agent against a breach of warranty.
So this is in preparation for the upcoming Seller's Disclosure Regime, which you would have seen getting a bit of media time last year.
It's due to come in hopefully later this year, but we're not sure of a date. As always, once we know more, we will update everybody.
So this is a major advantage to use REIQ Schedules and Terms & Conditions. It is important that you have this contractual protection.
In preparation for the Seller's Disclosure Regime rollout, REIQ suggests best practice is to use both annexures in Item I for EVERY appointment.
Again, we can't stress enough, this ensures you have the information you need in writing about the property and the preparation for the contract. This will help set habits for what will be required once this information is mandated under the Seller's Disclosure Regime.
We suggest everybody log in all REIQ members and watch the Form 6 webinar - it's excellent. It explains everything here in detail.
All right, to wrap up guys, there is an REIQ Best Practices Toolkit for Property Occupation Form 6's - including residential sales schedules. This is being rolled out and coming on the 1st of May 2024.
There are other notes and commentary in the REIQ webinar, specifically disclosing how the new Form 6 will affect buyers agents, auctions, property managers, and of course that Form 6A, which deals with commercial transactions.
If you want to know more about these topics, jump on and watch the webinar.
Thank you everybody for listening.
A bit content heavy, but this stuff is critical.
Keep in mind less than 3 weeks till this goes live, so please do something about it so you're not stuck on the 1st of May with these half filled out Form 6's that may be invalid and could cost you your commission.
What are your thoughts guys?
Please comment below, or leave your thoughts on the YouTube video in the comments section!
If someone you know is a Queensland real estate agent or in the industry, please share this video.
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George Sourris. Empire Legal.
If you have any questions, you can email me: george@empirelegal.com.au.
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Thanks for reading everybody. See you on the next one.
Ladies and gentlemen, please keep in mind that all advice is general in nature and does not constitute legal advice. This is authorised by George Sourris, Empire Legal, Gold Coast, Queensland, Australia.
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Note: all information is general in nature and as each matter is unique please contact our office for tailored advices: the above does not constitute legal advice.