How to Write a Testimonial to a Real Estate Agent - PDF

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					                                           A newsletter from the Real Estate and Business Agents Superv i s o ry Board

Issue No 27                                       Website: www                                                 Spring 2001

     Auditors’ independence is vital
     The Board has been reviewing the question of independence with regard to auditors
     of real estate and business agents, appointed pursuant to section 73(2) of the Real
     Estate and Business Agents’ Act to report on agents’ trust accounts.
     Section 72(3) states:                        made pursuant to section 72(3) and the      This directive from the Board extends
     “An auditor shall disclose to the Board      question of the auditors’independence       to preclude partners of auditors or any
     any close relationship by blood or           was raised yet again.                       other personnel of the auditing firm
     marriage he has with an agent whose                                                      from having business relations with the
                                                  The Board is mindful auditors are
     trust accounts he has been appointed                                                     audited agency.
                                                  required to be seen to be independent
     to audit or any business dealings he has
                                                  of the audited entity. To maintain an       BUSINESS          DEALINGS         WITH
     with or through such agent at any time
                                                  acceptable independent status, the          THE AGENT INCLUDES, BUT IS
     during his appointment as auditor, and
                                                  Board   has    issued    the    following   NOT       LIMITED          TO,      ANY
     the Board may, if it thinks fit,disqualify
                                                  directive: AUDITORS ARE              NO     TA X AT I O N / AC C O U N TA N C Y
     that auditor from acting in that
                                                  LONGER PERMITTED TO HAVE                    WORK DONE ON BEHALF OF
     particular case.”
                                                  ANY        OTHER           BUSINESS         THE AGENCY.
     In the course of last year’s review, the     DEALINGS WITH THEIR AGENT
                                                                                              Agents who need to change their
     Board noted there were 36 disclosures        CLIENTS.
                                                                                              auditor to comply with the Board
                                                                                              directive, should apply in writing at
        Full disclosure of commission                                                         least one month before engaging a new

       The Board has noticed some agents are claiming                                         auditor and include:

       commission on sale authorities by referring to a
                                                                                              ◆ reasons for the change;
       Schedule of Fees in the selling agent’s authority.
                                                                                              ◆ agreement from the current
       Section 60(2)(a) (iia) of the Act requires an agent to fully disclose the method
                                                                                                auditor, relinquishing statutory
       of calculating sales commission in the agent’s selling authority.
       Article 14(c) of the Code of Conduct also precludes an agent from                      ◆ an acceptance of responsibility
       demanding or receiving a commission from its principal (Vendor) if the                   from the nominated replacement
       vendor has not signed or initialed the relevant clause in the authority.                  auditor.
                                                                                              Applications should be addressed to:
       To ensure compliance with the Act and Code of Conduct, the original copy
       of the vendor’s selling authority must have attached to it a copy of the               The Registrar
       "Schedule of Fees". The schedule must be signed/initialed by the vendor.               Real Estate and Business

       The vendor should also be provided with a copy of the selling authority and            Agents Supervisory Boar d

       schedule of fees at the time of signing.                                               6th Floor 219 St Geor ge’s Tce
                                                                                              Perth WA 6000
How to correctly claim                                                               Agents need to
                                                                                    check registration
advertising expenses                                                                There is evidence some
There has been an increased incidence of vendors                                    real estate agents are
complaining to the Board regarding agents neglecting                                failing to check the
to follow the correct procedures for claiming                                       registration of their sales
reimbursement of advertising expenses relating to the                               representatives.
sale of a property.                                                                 The       problem     was     recently
                                                                                    highlighted by a case where a sales
Article 15 of the Code of Conduct sets        that the expense had been actually
                                              incurred.This requires an itemised    representative enquiring about his
down the procedure to enable agents
                                              list of expenses,dates and types of   certificate of registration,found it had
to seek reimbursement of certain
                                              advertising, amounts of each          expired in 1999. The representative
                                              advertisement etc to establish the    had been employed by two different
Article 15(1) states:                         expenses have been properly           agencies since his registration had
                                              incurred. General marketing           lapsed.
"If an agent is entitled to seek              expenses incurred by the agent, for
reimbursement from his or her                 instance window display, realnet or   Agents must be aware of the
principal of any expense which the            webpage,are not claimable unless      requirements of Section 54(i) of the
agent has incurred, the agents shall          the expenditure is individually       Real Estate & Business Agents Act ,
promptly supply to the principal all          itemised and costed specific to the   which states:
relevant information and material             vendor’s property;and
                                                                                    "An agent shall not employ as a sales
which the principal may reasonably         ◆ is required to justify and provide
                                                                                    representative,or permit to carry out
require in order to be satisfied as to       proof of the expenses claimed
                                             from the vendor without being          in the business of the agent any of the
the amount of the expense and that
                                             requested to do so by the vendor       functions of a sales representative,
the expense was properly incurred by
                                             ie. before payment is made or          any other person, not being a
the agent."
                                             monies are deducted from the           licensee who is the holder of a
(2) "An agent shall not seek or retain       trsut account,if prepaid.
                                                                                    current triennial certificate, unless
reimbursement of an expense which          The following policy should be
                                                                                    that person is a registered sales
the agent has incurred in respect of       adopted by agents in securing or
advertising, sign       boards, printed    receiving advertising expenses:
material and promotions unless -                                                    "Penalty $3,000"
                                           ◆ where the expenditure has been
(a) the principal has agreed in writing                                             It is recommended agents sight the
                                             incurred and paid for by the agent
to pay the expense;                                                                 current certificate of registration of
                                             and the vendor has agreed to
                                             reimburse the agent for expenses       all sales representatives and property
(b)   the     agreement    specifies   a                                            managers        and   monitor     their
                                             incurred, then payment may be
maximum amount which the agent                                                      continued registration.
                                             received by the agent into the
may seek or retain by way of                 general account;and
reimbursement;and                                                                   Sales representatives and property
                                           ◆ where the vendor has agreed to         managers are reminded they are also
(c) the maximum amount has been              contribute   an amount for             required to advise the Board in
initialled on the agreement by the           advertising expenses and that
                                                                                    writing within 14 days of ceasing or
principal."                                  amount has been pre-paid to the
                                                                                    commencing in the employment of
                                             agent prior to incurring the
In order to comply with Article 15(1)                                               any agent.
                                             expenses, then the amount
an agent:                                    received must be paid into the         Further changes of address must also
                                             agent’s Trust Account and
                                                                                    be advised to ensure receipt of any
◆ must give the vendor adequate              reimbursement must be made to
                                                                                    renewal notice of your certificate of
  information to satisfy the vendor          the vendor of any amount not
  as to the amount of expense and            incurred.

Proactive program a big success
The Board has decided to extend its                                    not simply an easy w ay to in vestigate R/E Agencies in WA.
Proactive Compliance Program based                                     I thought it was a g reat idea and found it very assuring
on its overwhelming success during an                                  that we were on the right track."
initial 12-month trial.                                                "As your records will demonstrate, our of fice was doing
The aim of the program has been to provide education and               quite well. We appreciate the chance to ha ve a check-
advisory services to give real estate agents a greater                 point."
understanding of their duties and obligations,as well as the           "I think there is some 'fear' amongst agents and man          y
role and functions of the Board.                                                               myths! Why don't you let agents
The proactive team has carried out                                                             write testimonial r egar ding the
more than 200 compliance visits.                                                               proactive visits and circulate with
                                              "This was the first time in                      the Newsletter?"
Those agents have since been
                                             17 years that our office has
surveyed to determine the program’s          been visited. Would suggest                       The    responses      to   the   non-
effectiveness, quality and relevance          biannual visits would be                         compulsory sur vey demonstrate the
to the industry. The following is a                 appropriate."                              p ro gram has been a resounding
representative      sample   of     the                                                        success and very well received by
comments received:                                                                             agents.

"This was the first time in 17 years that our of fice has been         As a result of the positive feedback,the Board has resolved
visited. Would suggest biannual visits would be                        to provide extra resources to ensure the continuation of the
appropriate."                                                          program.

"For so long the Board has been seen as the enemy - the                The Board believes the ongoing success of the proactive
person with the Big Stick. This new initiative will be                 compliance program is dependent on it continuing to meet
greeted with some suspicion but people will soon realise               the needs of the real estate industry and welcomes any
that you are really trying to help and that the prog    ram is         feedback.

                Maintaining your trust account
The Board has received                      month.                                           accounts at the end of each month.
reports that a number of                    They must also be kept in a manner
real estate agents are not                                                                   Buf fer Accounts
                                            that allows them to be properly and
treating their variable
                                            conveniently audited annually by the             Agents are also reminded that
outgoings accounts as
                                            agent’s statutory appointed auditor.             additional funds should not be placed
trust accounts.
                                                                                             in the trust account.
The Board is of the view that variable      REBA Bond Trust Accounts
                                                                                             This practice is seen by the Board as
outgoing bank accounts must be
                                            Agents are reminded that if they                 an attempt to avoid detection of errors
treated   as     trust   accounts    and
                                            maintain a REBA Bond trust account,              that would otherwise be identified
accounted for in accordance with the
                                            they are required to ensure such                 through over-drawing of the account.
provisions of the Real Estate and
                                            accounts are maintained according to
Business Agents Act.
                                                                                             Agents should not confuse buffer
                                            the trust accounting provisions of
The proper accounting for variable                                                           accounts with commission holding
                                            the Act.
outgoing accounts includes,but is not                                                        accounts which should be cleared to
limited to, ensuring the accounts are       Many       agents    are    not      correctly   the agents general account down to
correctly balanced at the end of each       balancing their REBA Bond trust                  ‘NIL’ balance at least once per month.

New privacy laws could affect you!
The new Federal privacy laws coming                                      ◆ businesses,including not-for-profit organisations,such as
                                                                           charitable organisations, sport clubs and unions, with a
into force in December could affect Real
                                                                           turnover of more than $3 million;
Estate and Business Agents throughout
Western Australia.                                                       ◆ organisations that carry on a business that collects or
                                                                           discloses personal information for a benefit, service or
The Privac y Amendments (Private Sector) Act 2000             (the         advantage (even if their turnover is less than $3 million);
Act) regulates the way private sector organisations collect,               and
use, keep secure and disclose personal information.
                                                                         ◆ small businesses with a turnover of less than $3 million
Personal information is information or an opinion that can                 that choose to ‘opt in’.

identify a person.                                                       The Act contains a set of National Privacy Principles (NPPs)
                                                                                                   about how organisations should
The Act also has special protection                                                                handle      personal      information.
for personal information that is              The Act contains a set of                            Organisations may have and enforce
sensitive information - information or       National Privacy Principles                           their own codes approved by the
an opinion about matters such as an              (NPPs) about how                                  Privacy Commissioner.
individual’s racial or ethnic origin,       organisations should handle
political   or   religious   opinions          personal information.                               The new provisions apply from 21

or associations, or their criminal                                                                 December 2001. Small businesses,

record.                                                                                            except health services, covered by
                                                                         the new provisions must comply from December 2002.Only
The Act means consumers now have a right to know about                   some of the NPPs will apply to the information organisations
information an organisation holds about them and a right to              already hold when the new provisions start to apply.
correct that information if it is wrong. Consumers can also
make a complaint if they think their information is not being            For further information about the Act,visit the Office of the

handled properly.                                                        Federal       Privacy      Commissioner’s          website     at
                                                               ;or contact the:
Those within the scope of the Act can be individuals,
corporate bodies,partnerships or trusts.These include:                   Privacy Hotline 1300 363 992.

 Be “up front” about account shortfalls
The Registrar of the Real                  Licensees must also inform the Board,                 Inspections       have   revealed    some
Estate     and    Business                 within five days, of the name and                     licensees think they can conceal trust
Agents Supervisory Board                   number        of     the      trust     account,      account deficits and trade their way out
has some advice for                        name and address of the financial                     of any problem.The Board’s experience
licensees who are aware                    institution where the account is                      is that licensees who try to trade their
there may be deficiency                    maintained,the amount overdrawn and                   way out of a problem end up with a
in their trust accounts.                   the reason.                                           bigger deficit.
If you suspect you have a deficiency,
                                                                                 C o n t a c t        d e t a i l s
tell the Board IMMEDIATELY.
                                                                                   6th Floor Forrest Centre
Licensees should be aware that under                                               219 St George’s Tce,
                                            REBA News is a quarterly               Perth WA 6000
current laws, financial institutions are     newsletter produced by                Locked Bag 14,
obliged to advise the Board of agents          the Real Estate and                 Cloisters Square 6850
who have ove rd rawn their trust                Business Agents                    Telephone (08) 9282 0843
account.                                                                           Facsimile (08) 9282 0869
                                               Supervisory Board.


Description: How to Write a Testimonial to a Real Estate Agent document sample