12 Sep 2014
Words John Mahoney

From PAMDA to POA - slowly

It had been expected that the new Property Occupiers Act would have been in place at about this time but as the government deals with some last minute tweaking of the legislation, its commencement is likely to be delayed until the second half of the year.

From the perspective of resident letting agents, the new Act will streamline and simplify licensing and general activities. Managers and others who attended ARAMA briefings I gave on the new Act throughout Queensland (attended in record numbers) will be familiar some of the more significant changes which include:

• Deregulation of commission – a change the government hopes will lead to a lowering of commission charged by letting agents. It is difficult to see that this will have a marked impact in the case of holiday lettings in particular. I do see the change as opening some opportunities for entrepreneurial managers who through clever structuring of a sliding scale of commission incentivise themselves and their owners in a way that should boost profits.
• Letting appointments assignable – this change corrects an anomaly in the current legislation which failed to deliver on the industry’s request for simplicity in the assignment of letting appointments from one manager to the next. No longer will letting appointments have to be ticked and initialled to be assignable. The quid pro quo though is that all appointments under the new Act will be subject to a maximum 30 day notice of termination. In practical terms I do not expect this to have anything other than a positive impact.

• Residential requirement removed – in recognition that many letting businesses do not require that the appointed letting agent reside onsite, and that a letting agent might be responsible for a number of complexes, it will no longer be a requirement for a letting agent’s licence that the agent reside onsite. Surprisingly the term “resident letting agent” is retained in the new Act. Managers should though be aware that their letting agreement with the body corporate may well impose a requirement for the manager to reside onsite. 

• Body corporate approval not required – aimed at cutting red tape, it will no longer be a requirement that a resident letting agent provide evidence of body corporate approval when applying for a licence. Likewise a licence will no longer apply to a specific building so can relate to a multitude of buildings without the need for the buildings to be contiguous.

• Corporate licensees do not need a licensed director – under PAMDA a company cannot hold a licence unless a director of the company holds a licence. Under the new Act it will be sufficient if a “person in charge” holds the licence. 

One of the less important but interesting changes is the removal of the requirement to have an office in a building unless operating under one or more letting agreements with a body corporate. That means that a letting agent operating without a letting agreement with a body corporate will not need to have an office in any of the complexes in which the agent operates but a letting agent who does have a letting agreement with one or more bodies corporate will be required to have an office in one of the complexes.

Other changes include the ability to appoint an unlicensed person to carry on a letting agent’s activities for up to 12 weeks in any 12 month period (although for no more than 30 consecutive days) and removal of some of the prescriptive information required in the letting appointment.

The transitional provisions of the new Act mean that any PAMDA appointments in place when the new Act commences will continue in accordance with their terms (including when they might end – typically when one party gives 90 days notice to the other) until the appointment ends. Therefore in order to obtain the benefit of the advantages of assignability and deregulated commission, managers will need to enter into new appointments under POA. 

Overall the new Act appears to achieve its goal of simplifying the licensing regime and the general activities of real estate and resident letting agents.