Real estate agencies at risk – long term.
Here are a couple of clauses that should be in salespeoples "employment" Contracts. They could save heartache and dollars years down the track.
The issue relates particularly to the Real Estate Agents Authority (REAA).
When they receive a complaint, the REAA, in many or possibly most cases, seeks a response from salespeople licensees without initially advising or even contacting their agency.
Many agents think that this is not a problem because salespeople are required, within ten days, to communicate to the agency any matter regarding complaints involving the REAA. Rule 10.4, Real Estate Agents Act, (Professional Conduct and Care) Rules 2009.
In addition to this, and after approaches by the Real Estate Institute, as of December 2010 the REAA has decided that they will advise the Agency ten working days after notfying the Licensee salesperson. Even if they notify the Agency more promptly, there are still problems.
The first is obvious in that the salesperson may have responded before the Agency becomes aware of the complaint.
Some Agencies have a clause in their “employment” contract with the salesperson requiring them to notify the agency immediately the salesperson becomes aware of a complaint and particularly a request from the REAA for a response.
The wiser ones even stipulate that the salesperson’s response shall be drafted in co-operation with the agency.
So far, so good.
The bigger problem however is, what happens after the salesperson has left the agency?
Firstly, there is no requirement under Rule 10.4 for them to refer the matter to the agency. They only need advise the agency while “employed or engaged’ by the agency.
Secondly the contractual obligation to advise the agency often ceases once the salesperson leaves the agency.
And that is where the problem really begins, especially if the parting was less than friendly, or worse.
The salesperson’s response could potentially be very harmful to the agency, and therefore result in the agency being involved in the complaint, after the salesperson has given the REAA information and/or opinion about the issue.
To those people who have read this far, I don’t believe it requires me to further explain the implications of this eventuality.
So how to minimize the risk?
While I do not know the extent to which the following would protect the agency in the event of a worst case situation, I believe that something along the lines of the following clause should be part of every salespersons “employment” contract.
In the event that the Contractor becomes aware of a complaint against them by any complainant, including those to the Real Estate Agents Authority (REAA), or any other entity with appropriate jurisdiction, or the possibility of such a complaint, either during the term of this agreement or, if the issue relates to their conduct during the term of this agreement, at any time after the termination of this contract, the Contractor shall immediately advise the Company. In particular they shall notify the Company prior to responding to the REAA or any other entity. The Contractor shall co-operate fully with the Company in such ways as are required by the agency, in particular with regard to any response to the complainant, REAA or other entity. In the event that the Contractor fails to notify and co-operate with the Company, the agency shall be entitled to recover from the Contractor, any fines, costs and damages imposed on them as a result of the complaint. The Company shall at all times act reasonably, professionally and ethically towards the complainant, the Contractor and any relevant authority and any investigation.
Another area of concern is that a salesperson, without the knowledge of their Agency, could lodge a complaint with the REAA about another Agency and/or their salesperson. It is important to ensure that if a salesperson does this, they cannot purport to represent the Agency without prior permission.
The following should help to avoid this situation.
In the event that the Contractor lodges a complaint with the REAA during the term of this agreement, the Contractor shall do so on their own account as a private individual and shall not purport to represent the Company nor use Company stationary or, without prior written permission from the Company, documents that are the property of the Company.
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Note: As with all of the clauses, letters etc on this site, they are changed from time to time as needed. It is therefore recommended that users check that they always use the latest version.
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