The new Property, Stock and Business Agents Amendment
(Property Reports and Exemption) Regulation 2016 (NSW) will
commence on 15 August 2016. The Regulation will introduce several
changes, including current definitions of commercial property
agency work, affiliate, entity and related entity.
Deregulation of Commercial Property Agents
The most significant change will exempt commercial property
agents from needing to comply with requirements under the
Property Stock and Business Agents Act 2002 (NSW) if they
sell or manage property for:
an affiliate; or
a large commercial property owner.
An affiliate is any entity that 'controls' the agent eg
by being able to make decisions about the agent's financial and
operating policies, or is a related body corporate of an agent if
it holds a corporation licence.
The second limb exempts commercial property agents carrying on
agency work on behalf of any entity who, alone or with affiliated
entities, owns property with an aggregate market value of $40
million or more, or an aggregate gross floor area of 20,000 square
metres or more. Residential property and rural land are excluded
from this calculation.
To fall under the exemption, an agent will need to be solely
dedicated to leasing, selling or managing property for its
affiliate or for large commercial property owners. In practice, an
exemption means an entity that currently needs a real estate agents
licence will no longer need to hold the licence, or comply with
requirements to keep professional indemnity insurance or undertake
the frequent professional development training required under the
This will be welcome news for many property companies. As an
example, a property management company who manages retail leasing
activities for a shopping Centre landlord, will not need to hold a
real estate agent's licence to manage any of the properties
owned by that landlord or its affiliates, as long as the landlord
owner is affiliated with the agent or the properties the landlord
and its affiliates own meet the size and value thresholds (in
In relation to residential properties, the Regulation will also
require real estate agents to obtain and provide pre-purchase
property reports to prospective buyers and continue to include the
offer price in agency agreements.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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