24 December 2019

A Bill was passed by the Parliament in September 2019 which amends parts of the Real Estate and Business Agents Act 1978 (the REBA Act) from 1 January 2020. This bulletin provides a brief overview of the changes.

Changes to the Real Estate and Business Agents (General) Regulations 1979 are currently being drafted in line with the changes to the Act.  Further information about the changes to the Regulations will be provided as the information becomes available.

Option to surrender triennial certificate at any time

Currently, licensees who wish to retain their licence can only surrender their triennial certificate when it expires.  The amendments introduce the ability for licensees to surrender their triennial certificate at any time and simply pay the holding fee to hold on to their licence.

Licensees can then apply to renew their triennial certificate when they wish to return to the industry.

This amendment eliminates the need for licensees to hold onto their triennial certificate when they are not using it for long periods - such as during extended leave from the industry, and having to wait for months or years to put their licence on hold when their triennial certificate expires. 

Requirement to surrender a firm or body corporate licence and triennial certificate if licensee becomes unqualified

Section 30(3) of the current REBA Act requires that a licensee must surrender the licence and triennial certificate if they cease to have the qualifications for holding the licence.

From 1 January 2020 the licence and triennial certificate must be surrendered within 5 days after the licensee ceased to have the required number of licensed directors or have a licensed person in bona fide control of the business.

The amendments clarify that a firm or body corporate becomes unqualified if they cease to have the requisite number of licensed partners/directors and/or a licensed person in bona fide control.  If the firm or body corporate ceases to be qualified by reason of death or withdrawal, they can operate in accordance with clause 6 of Schedule 1 of the REBA Act for up to 3 months, after which they must surrender their licence and triennial certificate if they remain unqualified.

The amendments clarify that if a licensee becomes unqualified and is required to surrender their licence and triennial certificate, they will be considered to have surrendered them five days after becoming unqualified and will become unlicensed, even if they have not they complied with the requirement to surrender.

Licensee's triennial certificate

late renewal up to 12 months 

Amendments to section 32 clarify the requirements for an application for the late renewal of a triennial certificate and expand the section to apply to applications to renew surrendered certificates.  The amendments also clarify the timeframe in which the renewal will take effect.  This may be the day after the day on which the certificate expired or was surrendered – or the day the renewal is granted, the determination will be made by the Commissioner.

late renewal after 12 months

Section 33 of the REBA Act has been expanded to apply to licenses which have been surrendered for over a year along with expired licences.  If a renewal is granted it will take effect on the day the renewal is granted.

Adding and removing conditions on licences or triennial certificates at any time.

The amendments allow the Commissioner to impose or remove conditions on licences, triennial certificates and certificates of registration at any time, rather than only at the time of granting or renewing.

This means that agents can now request to have completed conditions (for example, CPD catch-up requirements) removed from their certificates.

If the Commissioner is considering imposing a condition, the licensee must be notified in writing, and be offered the opportunity to make submissions in relation to the proposed condition.  If a condition is ultimately imposed that the licensee is aggrieved by, the decision is reviewable by the State Administrative Tribunal (SAT).

Adding and removing special conditions on certificates of registration at any time

The new arrangements for imposing and removing conditions on licences and triennial certificates also apply to conditions on certificates of registration.

New penalties for breaches of provisions for Trust Accounts

The amendments introduce a penalty of 2 years’ imprisonment for serious breaches of the trust account provisions.  Where a deficiency in a trust account is the result of circumstances, such as an administrative error or a failure to detect an unauthorised withdrawal by a member of staff, any disciplinary action taken in respect of the agent will continue to be commenced in the SAT under section 103 of the REBA Act.  The penalties under that section would be available to the SAT.

Prosecution under section 84 in the Magistrates Court will only be commenced for the most serious offences, where an individual is personally responsible for a defalcation, or has actively assisted in or permitted its commission.  The amendments allow the Magistrate to consider a range of sentencing options after a person has been convicted of an offence, including imposition of a fine, non-custodial sentences, community service or a custodial sentence after consideration of all the circumstances.

Discipline of agents and sales representatives

There are new provisions in the REBA Act, which provide that despite a licence holder having surrendered a licence or triennial certificate or ceasing to be licensed or hold a triennial certificate an allegation in respect of that agent may be made to the SAT not later than 12 months after the day on which the licence or certificate was surrendered or the licensee ceased to be licensed or ceased holding a certificate.  The SAT may then impose a fine.

Fidelity Guarantee Account

Section 116 of the REBA Act has been amended to include the application to reimburse a person for their pecuniary or property loss to the extent of the defalcation of a person who ceased to be licensed or hold a triennial certificate, with the approval of the Chief Executive Officer, if the defalcation occurred during the 6 months immediately following the day on which the person ceased to be licensed or the holder of the triennial certificate.

Increased Penalties 

In addition to the increased penalties for breaches of section 26(1), the penalties for a number of other breaches have been increased.  These are:

• transfer and permitting others to use your licence and triennial certificate.  The penalty has increased from $20,000 to $100,000;
• the requirement for real estate and business sales representatives to be registered.  The penalty has increased from $3,000 to $25,000;
• the requirement for partners and directors of licensees to be registered in certain cases.  The penalty has increased from $2,000 to $20,000.

If you would like to view all of the amendments in detail, a tracked version of the REBA Act, incorporating the changes can be found under the Consumer Protection Legislation Amendment Bill 2018 page on the Parliament of Western Australia website.

The updated REBA Act, incorporating the proclaimed amendments, should be available on the WA Legislation website in January 2020 – agents should review the amended Act and familiarise themselves with the changes.