Canberra agency agreements: what ACT rules require on commission

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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A seller in Canberra who signs with a real estate agent signs an agency agreement, and almost everything about the agent's fee flows from that one document: what the fee is, what event earns it, when it falls due, what costs come on top and how long the seller is tied to the agent. In the Australian Capital Territory the document is not left to the parties alone. The Agents Act 2003 and the Agents Regulation 2003 set what it must say, add duties of disclosure around it, and, in the sections read for this guide, list situations in which a commission cannot be recovered at all.

This guide works through those two texts as they stand on the ACT Legislation Register: the Act in its republication R45, effective 6 December 2025, and the Regulation in its republication No 23, effective 13 September 2024. The Regulation was read in full. The Act was read only up to section 89: section 100 and everything after it, where the Act deals with the agency agreement itself, was not read and is not described here. Within that limit, the guide covers the required contents of an agreement, the way remuneration has to be written down, the exclusive agency warning, the 90-day rule for fixed terms on residential sales, the papers an agent prepares around the agreement, the disclosure of rebates and benefits, the cases where the fee is lost, and the maximum penalties. A final section names the questions these provisions do not settle.

Agents Regulation 2003 (ACT), schedule 4, section 4.3, for residential sale agreements; Agents Act 2003 (ACT), section 84.

Two texts, one document

The rules sit on two levels. The Agents Act 2003 is the statute: it says who is an agent, creates the offences and sets their maximum penalties. Under section 8 of the Act, a person carries on business as a real estate agent by providing, or offering to provide, a real estate agent service for a principal for reward. The principal is the person the agent works for, and the reward is what the trade calls commission or a fee. The services themselves are listed in section 8(2).

The Agents Regulation 2003 is the detail. Its section 15 says that an agency agreement must comply with schedules 3 to 7 of the Regulation and must not contain anything inconsistent with Part 5. Schedule 3 holds the requirements read here as common to agency agreements. The later schedules add requirements by type of work: schedule 4 for residential sales, schedule 5 for a buyer's agent, schedule 6 for rural land and schedule 7 for the sale of a business. Schedule 8 is a different kind of text: it holds the rules of conduct, which bind the agent in the way the work is done.

The term "agency agreement" itself is defined in the Act: section 75A points to section 100(1)(a) for its meaning. The same section 75A decides who may put a name to the document on the agency's side. A registered assistant property agent must not sign an agency agreement, and the maximum penalty for doing so is 100 penalty units. For a seller, the practical meaning is that the signature on the agency's side is not that of a registered assistant.

What every agreement has to state

Schedule 3 of the Regulation reads as a checklist. Each item answers a question that a seller or a buyer would otherwise have to ask, and each one is a term the document must carry, not a matter left to a conversation.

Three of these rows deserve a word. The licence number lets the principal see that the person engaged holds a licence, which matters because of the rule on unlicensed work described further on. The warranty of authority is the principal's own statement of having the right to give the instruction, for instance to offer the property for sale. And the terms on the extent of the licensee's authority fix what the agent may do in the principal's name, which is a separate question from what the agent is paid.

The buyer's agent exception in the first row follows from the work itself: an agent engaged to find a property cannot name it on the day of signing. For that kind of agreement, the rules of conduct ask for something else. Under section 8.26 of schedule 8, a buyer's agent prepares a statement of property details, and schedule 5 requires that statement to be copied into the agreement.

How the commission has to be written down

Section 3.9 of schedule 3 is the commission clause. The agreement must state the circumstances in which the licensee is entitled to remuneration, whether commission or otherwise, the amount of the remuneration or how it is calculated, and when it is payable. These are three separate points, and a document that gives a rate without saying what event earns it, or when the money falls due, leaves one of them out.

The Regulation then adds a requirement for residential work. Where the remuneration for a residential sale or purchase is paid as a percentage, the agreement must also state the remuneration on a stated estimated price. In other words, the percentage has to be turned into dollars once, in the document, on a price the document names.

A worked example shows the effect. Assume an agreement for the sale of a house that sets remuneration at 2 per cent of the sale price and states an estimated price of A$900,000; both figures are illustrative and neither is a market rate. Two per cent of A$900,000 is A$18,000, so the agreement would show A$18,000 as the remuneration on that estimated price. If the house later sold for A$950,000 under the same clause, 2 per cent would be A$19,000. The dollar figure in the document is a calculation on an estimate, written so that the seller sees an amount and not only a rate; the amount finally payable depends on the price reached and on the wording of the clause. The provisions read for this guide do not say how tax on the fee is to be shown, and the example leaves it aside.

The provisions read for this guide, which stop at section 89 of the Act, fix no rate or scale of commission. On those provisions, the figure that appears in the remuneration clause is the one the parties write into it.

Expenses are treated separately from remuneration, in section 3.8. If the licensee is entitled to be reimbursed for expenses or charges, the agreement must state that entitlement, describe the services for which the expenses are incurred, and state the amount and when it is payable. It must also say that changes require the principal's written agreement. The effect is that an advertising or marketing budget, where one is charged to the seller, is a stated sum for described services, and a larger sum needs the seller's consent in writing.

Exclusive agency and its warning line

The Regulation defines an exclusive agency agreement by its effect on the fee. Under section 4.1(3) of schedule 4, it is an agreement that entitles the agent to commission whether or not the agent or the client, or both, is the effective cause of the event that earns it. The same definition appears in schedule 6 for rural land and in schedule 7 for the sale of a business.

"Effective cause" is the key phrase. Under an exclusive agreement as the Regulation defines it, the question of who actually brought about the sale does not decide whether commission is owed. A seller who finds the buyer without the agent's help is, on that definition, still within the clause.

Because of that reach, the Regulation requires a warning in fixed words. An exclusive agreement for a residential sale must carry the statement "IMPORTANT: This is an exclusive agency agreement.", placed right after the remuneration term. Schedules 6 and 7 require the same statement for rural land and for the sale of a business. The position is part of the rule: the warning sits directly under the clause it changes, so that a principal reading the fee reads the exclusivity with it.

The 90-day rule on fixed terms

Schedule 3 leaves the length of an agreement to the document: it must state its duration, or state that it continues until terminated. For residential sales, schedule 4 then limits how long a fixed term can hold a seller who wants to leave.

Under section 4.3 of schedule 4, an agreement with a fixed term longer than 90 days must allow the principal to end it, without penalty, by giving 30 days' written notice at any time after the first 90 days. The rule does not cap the term. An agreement may be written for longer than 90 days; what it must contain is the seller's right to give notice once the first 90 days have passed.

A worked example makes the arithmetic visible. Assume a residential sale agreement with a fixed term of 180 days, and a seller who gives written notice on day 91. Counting 30 days from day 91 gives day 121, so on these assumptions the agreement would end 59 days before its stated term of 180 days. Now assume a fixed term of 120 days and the same notice on day 91: the 30 days again run to day 121, one day after the term would have expired in any case. The right therefore matters most for long terms. How the days are counted in a given case depends on the wording of the agreement and of the Regulation, and the example is an illustration only.

Three limits on the rule are stated in the Regulation or follow from its text. The notice must be written. The right belongs to the principal; section 4.3 is about the seller's exit, and the agent's own right to end the agreement is whatever the termination clause required by schedule 3 provides. And the rule does not apply to a contract involving the construction of a dwelling. The schedules for rural land and for the sale of a business, as read for this guide, contain no equivalent notice provision.

Papers the agent prepares around the agreement

The rules of conduct in schedule 8 add documents to the agreement and set standards for how it is presented.

For a residential sale, section 8.21 requires a sales inspection report, prepared after the agent's preliminary inspection of the property, and section 4.5 of schedule 4 requires the report to be copied into the agreement. The agreement therefore records what the agent saw at the start of the engagement as well as the terms of the engagement.

Section 8.17 requires material particulars to be inserted before a document is given for signature. A principal should not, under that rule, be handed a form in which the terms that matter are still blank. Section 8.18(2) prohibits an agent from falsely representing that a particular form of agency agreement, or a particular term, is required by the Act. The distinction is useful: the Regulation prescribes what an agreement must contain, and the rule of conduct stops anything beyond that from being presented as compulsory when it is not. Section 8.19 closes the circle by prohibiting an agent from entering into an agency agreement that does not comply with the Regulation.

Two further rules concern how the engagement is won. Under section 8.15 an agent must not offer gifts, favours or benefits to induce someone to engage the agent, and under section 8.16 an agent must not solicit clients through advertising or communications the agent knows, or should know, are false or misleading. Once engaged, the agent is bound by the general duties in schedule 8 to act honestly and in the client's best interests, and by section 8.12 not to act where doing so would place the agent's interests in conflict with the client's.

Schedule 8 also deals with money taken from a prospective buyer before any contract exists. Where an expression of interest deposit is taken, sections 8.23 and 8.30 require written information that the vendor has no obligation to sell and that the deposit is refundable if no contract is entered.

Referrals, rebates and benefits

The fee in the agency agreement is not the only money an agent could receive around a sale. The ACT texts deal with the others in three places.

The first is the Act's rule on pre-contract information. Section 81 defines that information as covering the agent's relationships with service providers to whom the agent refers a client, and the benefits received from them. Section 80 gives "benefit" a wide meaning: a financial or other benefit. Under section 84, an agent acting for a buyer or a seller must disclose the pre-contract information before the contract is entered. The maximum penalty is 200 penalty units for each of the two offences in the section, and section 85 places the same duty, with the same maximum, on an assistant property agent. A written acknowledgment of the disclosure is evidence that it was made, according to the same sections.

The second is the conduct rule on independence. Under section 8.13 of schedule 8, an agent who refers a principal or a buyer to a service provider must not falsely say that the provider is independent. The Regulation defines the word narrowly: a provider is independent only if the agent receives no rebate, discount, commission or benefit for the referral and has no personal or commercial relationship with the provider. Family, business and fiduciary relationships are among the examples the Regulation gives. Where the provider is not independent, the agent must disclose the relationship and the nature and value of any rebate, discount, commission or benefit. "Nature and value" means the disclosure states what the benefit is and how much it is worth.

The third is a set of flat prohibitions. Sections 8.25, 8.31, 8.46 and 8.62 of schedule 8 each provide, for a different kind of agency work, that an agent must not demand or accept a fee or other valuable consideration for a referral. Separately, section 14 of the Regulation covers financial or investment advice about buying or selling land: the advice must carry general-advice and conflict-of-interest warnings, and section 14(2)(c) requires disclosure of any conflict of interest, such as an entitlement to commission or referral fees.

When a commission cannot be recovered

The sections of the Act read for this guide, up to section 89, tie the fee to compliance in five defined situations. In the first three the Act says the fee cannot be recovered; in the fourth the sharing agreement is unenforceable; in the fifth the commission depends on the seller's written agreement. The list is limited to those sections: section 100 onward, where the Act deals with the agency agreement, was not read and may add others.

1. Work done without a licence. Under section 23, an unlicensed agent cannot sue to recover a commission, fee or reward for a service provided while unlicensed.
2. An assistant outside the registration rules. Under section 48, an assistant property agent who contravenes the registration requirements in sections 45 to 47 cannot sue to recover salary, commission or fees.
3. Commission shared with an unlicensed person. Section 72 prohibits a licensed property agent from sharing commission with an unlicensed person, with a maximum penalty of 50 penalty units. The arrangement is void to that extent, a clause that tries to exclude the section is void, and under section 72(5) a person cannot recover commission for a service if providing it contravened the prohibition.
4. An undocumented split between agents. Under section 73, an agreement between licensed agents to share commission is unenforceable unless it is in writing, signed by each agent and contains the prescribed terms. Entering into an unenforceable agreement carries a maximum penalty of 50 penalty units.
5. An agent with an interest in the property. Section 86 prohibits an agent acting for a seller from intentionally obtaining a beneficial interest in the land, or being involved in another person obtaining one. The exception in section 86(2) requires full disclosure and the seller's written agreement, and then either that no commission is taken or that the seller agrees in writing to the commission.

The fifth case links the fee to consent in a precise way. "Beneficial interest" is defined broadly in section 82: it includes leases, options and general powers of appointment, and it extends to interests obtained by family members, related corporations and others. An agent who wishes to buy a property the agency is selling therefore needs the seller's written agreement to the purchase and, separately, the seller's written agreement to any commission on it.

One related rule concerns whom an agent may act for. Under section 77(1), a licensed real estate agent or stock and station agent must not act for both the buyer and the seller of the same land at the same time; the maximum penalty is 100 penalty units.

The penalties, in units and in dollars

The Act expresses penalties in penalty units, and the dollar value of a unit is set under the Legislation Act 2001. The republication of the Regulation effective 13 September 2024 prints the values then in force: A$160 for an individual and A$810 for a corporation. The table below converts the maximums at those values as a worked example; the value of a unit can change, so the dollar figures belong to that date.

The beneficial interest offence carries more than a fine. For an agent, obtaining a beneficial interest outside the exception has a maximum of 200 penalty units, two years' imprisonment, or both. For an assistant property agent the maximum under section 87 is 100 penalty units, one year's imprisonment, or both.

The offence in section 88 bears on the estimate that sits beside the commission clause. An agent acting for a seller must not make a dishonest representation about the estimated selling price to the seller, to a buyer or in an advertisement. A representation is dishonest, under section 88(3), if it is dishonest by ordinary standards and the person making it knows that it is. Section 80 adds that "estimate" includes an opinion and a belief, and that "selling price" includes a price range. Under section 89 the commissioner may require an agent to provide the evidence relied on for a selling price estimate. Since the Regulation asks for the remuneration to be shown on a stated estimated price, the estimate written into the agreement is a figure the agent may be asked to support.

The rules of conduct in schedule 8 are stated as obligations. The Regulation as read for this guide applies chapter 2 of the Criminal Code to offences against it and does not attach a specific penalty amount to each rule.

What these provisions leave open

Several questions a seller might bring to the table are not answered by the provisions described above, and this guide does not answer them either. The main reason is the limit stated at the start: the Act was read only up to section 89, so its own rules on the agency agreement, from section 100 onward, are outside this guide.

The first is a cooling-off period on the agency agreement itself. The schedules of the Regulation read for this guide set no period during which a principal may withdraw after signing. Whether another provision supplies one is a question for the part of the Act that was not read, starting with section 100, where the agency agreement is defined.

The second is whether the document must tell the principal that commission is open to negotiation. Schedule 3 requires the amount or the method of calculation to be stated; the requirements read here include no prescribed statement about negotiability. What they do show is that no rate is fixed by them.

The third is what follows when an agreement fails one of the schedule 3 requirements. The rules of conduct prohibit an agent from entering into a non-complying agreement, but the effect of non-compliance on the fee in a particular case is a matter for the part of the Act that was not read and, in a dispute, for the body that decides it.

The last is time. The Act was read in the republication effective 6 December 2025 and the Regulation in the republication effective 13 September 2024. Both carry their dates on their cover pages, and a later republication replaces them.

In the ACT the fee is a clause with three parts: what earns it, how much it is and when it is due. A rate alone is not enough.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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