WA Property Law - Get Referral Fee from Developer or from Buyer?

Australia's #1 for Law
Join 150,000 Australians every month. Ask a question, respond to a question and better understand the law today!
FREE - Join Now

Asterius

Member
14 December 2015
4
0
1
In Australia, besides securing the property under option contract, is it legal under property law to get a referral fee from a developer or prospective buyer as supposed to a seller commission?
 

Tim W

Lawyer
LawConnect (LawTap) Verified
28 April 2014
4,913
820
2,894
Sydney
In this context, no matter the games of language
I do not see any meaningful difference at law
between a "referral fee" and a sales commission.

In this context, even if all you do is introduce buyer and seller (or their respective agents),
and the result of that is a payment to you (by either party), then you are involved in the transaction.
I suggest that this is especially the case if you do it repeatedly and in an organised way.

And I suggest that that brings you within the scope of Part III of the Real Estate and Business Agents Act 1978 (WA),
and the requirements it contains for licensing.
 

Asterius

Member
14 December 2015
4
0
1
If the fee was a flat rate for marketing and the service was lead generation or simply the act of advertising, would that still constitute a real estate agent? I fear you are right though even though I know a lot of people who get commissions from developers as finders fees. Well, an options contract seems to be the only way around this then....
 

Tim W

Lawyer
LawConnect (LawTap) Verified
28 April 2014
4,913
820
2,894
Sydney
  1. I am wondering what you mean by "options contract" in this context?

  2. The act is quite clear, really.

  3. Lead generation is simply a form of advertising.
    This doesn't necessarily make you a de facto agent or sales representative
    any more than standing on a street corner handing out pamphlets does.

    The difference is that advertising/ marketing gets paid for,
    no matter if it produces sales or not.
    That's not what you're doing, and is not what your question is about.

  4. The presence of repeated, organised activity (no matter how infrequent),
    and that payment is conditional upon the making successful deals,
    are what point to it being activity within the scope of the act.

  5. If petty word games were a way around legislation of this kind,
    then it would make a mockery of regulation of the industry.
    In any event, an allegation of working without the licence and the certificate
    is pretty well indefensible.
 

Tim W

Lawyer
LawConnect (LawTap) Verified
28 April 2014
4,913
820
2,894
Sydney
Selling off the plan then?
 

Asterius

Member
14 December 2015
4
0
1
No, you don't need to be selling off the plan to use an options contract. Simply assigning it on any deal is flipping, which would be the case in question.
 

Tim W

Lawyer
LawConnect (LawTap) Verified
28 April 2014
4,913
820
2,894
Sydney
No, you don't need to be selling off the plan to use an options contract.
As it happens, I am familiar with them.
People often use the term incorrectly, especially in relation to OTP sales, which is why I ask.
I am something of a consumer advocate when it comes to off the plan sales, because that part of the industry is full of shonks.