A recent County Court decision (Cellmore Real Estate Pty Ltd v Funston [2025] VCC 1205) is a sharp reminder for estate agents. If an authority is not completed properly, the agency cannot recover marketing fees.
In Cellmore, the Exclusive Sale Authority listed advertising costs as "TBA." The Court found this failed to comply with the Estate Agents Act 1980 (Vic). As a result, the agency could not recover its marketing spend. The first campaign with another agent had failed. Cellmore was then engaged on an Exclusive Sale Authority with payment of marketing deferred. Buyer interest was limited, the authority expired, and a dispute over marketing costs followed.
Marketing campaigns are expensive, and in a competitive environment many agents agree to fund advertising upfront to win the listing. But the risks are real. In this case the agent ended up with no commission, unrecoverable marketing fees, and tens of thousands in legal costs after a dispute about recovering those fees. A charging clause or caveat provided no protection.
When taking on a second or third hand listing, ask yourself: is the juice worth the squeeze?
There may be a reason why the previous agents have failed to sell the property. If you are expected to fund marketing costs out of your own pocket, the risk is magnified.
The key points for agents:
- Make sure authorities are complete, including marketing costs and do not contain notations such as "TBA".
- Be cautious about funding advertising unless your paperwork is watertight.
- A charging clause and registration of a caveat will not save a defective authority and may expose you to legal costs.
- Think carefully before taking on stale listings where expenses may end up yours to carry.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
