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

Discussion in 'Property Law Forum' started by Asterius, 14 December 2015.

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  1. Asterius

    Asterius Member

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    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?
     
  2. Tim W

    Tim W Lawyer

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    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.
     
  3. Asterius

    Asterius Member

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    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....
     
  4. Tim W

    Tim W Lawyer

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    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.
     
  5. Asterius

    Asterius Member

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    Option to buy land and property: simple; assignable
     
  6. Tim W

    Tim W Lawyer

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    Selling off the plan then?
     
  7. Asterius

    Asterius Member

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    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.
     
  8. Tim W

    Tim W Lawyer

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    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.
     

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