Victoria's estate agent conduct rules: duties, conflicts and complaints

In this article

Written by

Kooky

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

About Kooky and Shaka →

A vendor who signs an authority in Victoria hands an agent a great deal: the marketing of a home, the handling of every offer, and a view of the vendor's finances and motives that no buyer is meant to see. The law answers that trust with a set of conduct rules. They say how an agent must behave towards the person who engaged them, how the agent must treat the people on the other side of the deal, and what the agency must do when somebody is unhappy.

This guide sets out those rules as Consumer Affairs Victoria, the state's regulator, describes them on its guidance pages for the industry. It covers the general duties, the handling of offers and deposits, confidentiality, conflicts of interest, the offence of an agent acquiring a property the agency has been commissioned to sell, the complaint procedure every agency must keep, and the route a complaint takes once it leaves the agency. It closes with the points the pages read for this guide do not settle, so that nothing here is taken for more than it is.

Consumer Affairs Victoria guidance on section 55 of the Estate Agents Act 1980, page dated 12 October 2023.

Where Victoria's conduct rules are written

Consumer Affairs Victoria says the standards of conduct come mainly from the Estate Agents (Professional Conduct) Regulations 2018. The Victorian legislation register lists them as Statutory Rule 49 of 2018, shows version 001 with an effective date of 26 May 2018, and gives their status as a statutory rule in force.

The regulations do not stand alone. The regulator's page on professional conduct names five other laws an agent works under: the Estate Agents Act 1980, the Sale of Land Act 1962, the Residential Tenancies Act 1997, the Retail Leases Act 2003 and the Australian Consumer Law and Fair Trading Act 2012. The conduct regulations set the standard of behaviour; the Acts carry the licensing system, the rules for selling land, the rules for renting and the general consumer law.

The rules reach two groups. Consumer Affairs Victoria states that they apply to estate agents and to agents' representatives, the people who work for an agent. A duty described below therefore binds the person who actually deals with the vendor or the buyer, and not only the licence holder whose name is on the door.

Two words recur on the regulator's pages and are worth fixing at the start. The client is the person who engaged the agent: on its complaint handling page the regulator gives a seller or a landlord as the example. The consumer is the person on the other side: a buyer or a tenant. Most of the duties are owed to the client, and a smaller group protects the consumer.

Knowing the law and acting honestly

The first duty in the regulator's list is knowledge. An agent or representative must know the relevant laws. Read with the six pieces of legislation named above, that is a wide requirement: someone who lists homes for sale and also manages rentals is expected to know the selling rules and the tenancy rules alike.

The second is a standard of character. According to Consumer Affairs Victoria, agents and representatives must act fairly, honestly, in good faith, and to the best of their knowledge and ability at all times. The regulator attaches the words "at all times" to it. It sits beside a specific protection for the other side, covered further down, that forbids misleading a buyer or a renter about the client's instructions.

Three further duties describe how the work is done. The agent must use skill, care and diligence. The agent must finish a client's work as soon as reasonably possible. And the agent must be timely and courteous in all dealings. None of these comes with a number of days on the regulator's page; each is a standard that depends on the job and the circumstances.

There is also a duty to look for facts. An agent must make all reasonable enquiries to find information relevant to a transaction. The regulator's companion page, on acting for a client, puts it as finding out all relevant information about a transaction. The point is that an agent is not meant to rely only on what the client volunteers.

Last in this group is a rule about the trade as a whole. An agent must not engage in conduct that is unprofessional or detrimental to the estate agency industry. The page gives no examples, so what falls inside it depends on the case.

Best interests and the client's instructions

The centre of the rules is the duty to act in the client's best interests. Consumer Affairs Victoria states it with four limits: the duty applies unless acting that way would be unlawful, unreasonable, improper, or against the client's instructions.

Beside it sits the duty to follow the client's lawful instructions, which has its own limit: it applies unless following the instruction would not be good estate agency practice. The two duties check each other. A client's instruction can narrow what "best interests" requires, because the agent is not asked to override what the client has decided. But an instruction does not bind the agent when it is unlawful, or when carrying it out would not be good practice.

The pages read for this guide do not say which of the two wordings matches the regulations in force. Neither page gives a regulation number, so a reader who needs the exact wording has to go to the regulations themselves.

Offers, deposits and keeping people informed

An offer belongs to the client, not to the agent. Consumer Affairs Victoria says an agent must pass all verbal and written offers to the client. A spoken offer counts as much as a written one. The single exception is the client's own instruction, and it has to be given in writing: an agent is released from passing on offers only where the client has instructed otherwise in writing.

The rule has a second half that protects the person making the offer. Where the principal has told the agent not to pass offers on, the agent must tell the offeror that the offer will not go to the principal. A buyer is therefore not left waiting on an answer that can never come.

Consider how this plays out, as an illustration with assumed facts. A vendor tells the agent in writing that no offer is to be brought forward before a set date. A buyer makes a verbal offer a week earlier. Under the rules as the regulator describes them, the agent does not have to take that offer to the vendor, because a written instruction exists; but the agent must tell the buyer that the offer will not be passed on. Without the written instruction, the verbal offer would have to reach the vendor.

Deposits carry the strongest wording in the list. An agent must immediately tell a seller if a contractual deposit has not been received. The other notice duties use "promptly"; this one uses "immediately".

Auctions have a rule of their own. An agent must not convey bids made after a property has been knocked down at a public auction, unless a contract is not signed. Once the hammer has fallen and the contract is signed, a later bid is not to be carried to the vendor.

A buyer's agent, who acts for the purchaser, has a matching duty in the other direction: to keep the purchaser informed at each stage of negotiations.

The same logic runs through property management. According to the regulator, an agent must promptly tell a landlord about a breach of a tenancy agreement, unless the landlord has instructed otherwise in writing. An agent must promptly respond to a renter's request for maintenance or repairs and tell the renter the landlord's response. And an agent must tell the landlord if failing to carry out the maintenance or repairs would breach the agreement or the Residential Tenancies Act 1997.

Confidentiality and what must not be said

An agent learns things in the course of a sale that would weaken the client if they were known: how low the vendor would go, why the home is being sold, how quickly the money is needed. The regulator's rule is that an agent must not use or disclose confidential information obtained while acting for a client. There are two exceptions: the client authorises it, or the law requires it.

Note the two verbs. The ban covers using the information as well as disclosing it, so an agent who keeps a secret but trades on it is still outside the rule.

Silence about confidential matters does not allow a false picture to be painted. An agent must not mislead a renter, a prospective purchaser or a purchaser about a landlord's or a seller's instructions. So the agent keeps the client's confidences, and at the same time does not invent instructions the client never gave.

One more prohibition belongs here: an agent must not induce anyone to breach a contract.

Conflicts of interest and who pays the agent

The rule is short: an agent must not put their own interests in conflict with a client's. Consumer Affairs Victoria's page on acting for a client names three situations that may create a conflict.

On the first, the professional conduct page adds two prohibitions. An agent must not put their own interests in conflict with a client's by acting for another person, and must not accept commission from both a client and a consumer for the same transaction. In a sale, that means the agent paid by the vendor is not also paid by the buyer for the same deal.

On the second, the duty is one of disclosure rather than a ban. An agent must tell the client about any personal or commercial relationship with a supplier they recommend. The page does not forbid the recommendation; it requires the client to know of the tie before relying on it.

A related rule concerns the authority itself. An agent must not induce a client into an agency authority that may lead to commission going to more than one agent, without first giving written advice of the possible consequences. The warning has to be written, and it has to come first.

When an agent wants to buy a listed property

The third situation is the only one the regulator's pages attach a criminal penalty to. Consumer Affairs Victoria says estate agents, their employees and their family members are generally barred from buying any property or business their agency is commissioned to sell. Under section 55 of the Estate Agents Act 1980, an estate agent or agent's representative commits an offence by obtaining a beneficial interest in a property they have been commissioned to sell.

"Beneficial interest" is wider than a purchase in the agent's own name. The regulator says it includes buying a property or obtaining an option to buy one. It then lists the ways such an interest can be held:

• by the agent or representative, or by an associate;
• by a proprietary company of which the agent or an associate is a member;
• by a company the agent controls, alone or with associates;
• by a company in which the agent or an associate is an executive officer;
• where the agent is itself a company, by its executive officer or that officer's associate;
• by the trustee of a discretionary trust of which the agent or an associate is a beneficiary;
• by a firm or partnership of which the agent or an associate is a member;
• by a for-profit business in whose income or profits the agent or an associate can share.

The word "associate" does much of the work. Consumer Affairs Victoria defines it as an employee of an estate agent; a spouse, domestic partner, parent, brother, sister or child of an estate agent; or a child of an estate agent's spouse or domestic partner. A purchase by an agent's brother, or by a company in which an agent's spouse is an executive officer, is therefore inside the section on the regulator's reading.

The maximum penalty the regulator gives is two years' jail and up to 240 penalty units. The page does not state the dollar value of a penalty unit, so no dollar figure is given here.

The four conditions of the section 55 exemption

Section 55 is not an absolute bar. According to Consumer Affairs Victoria, an agent is exempt who can show four things:

1. The agent obtained the vendor's written acknowledgement that the vendor knows about, and agrees to, the possibility that the agent may acquire the interest.
2. The agent acted fairly and honestly in the transaction.
3. No commission or other reward was payable in the transaction.
4. The vendor was left in substantially as good a position as a sale at fair market value would have given.

The four stand together: the regulator's wording is that the agent must be able to show them all. Consent alone is not enough. A vendor may sign the acknowledgement and the exemption still fail if a commission was charged on the sale, or if the vendor ended up materially worse off than a sale at fair market value would have left them.

The first condition has its own document. The acknowledgement is made on a form the regulator calls "Disclosure of conflict of interest to vendor". The form does not have to be lodged with Consumer Affairs Victoria. The regulator's instruction is to keep it with the other documents for the sale, which is where it would be looked for if the purchase were later questioned.

The third condition has a plain consequence for the agency's income: where an agent, an employee or a listed relative acquires the property under the exemption, the sale earns no commission or other reward.

Consent opens the door to an agent's own purchase, but fair dealing, a fair price and a forgone fee are what keep it open.

Complaints inside the agency

Victoria's rules assume that disputes will arise and require an agency to be ready for them. Consumer Affairs Victoria says an agency must have a procedure for resolving consumer complaints and disputes. It leaves the design to the agency: an agency may buy the Australian Standard for complaint handling, AS 4608-2004, from Standards Australia, or develop its own internal system. The regulator also publishes a sample policy.

The procedure must be made known at three moments.

The authority itself carries part of the information. According to the regulator, an agency authority must include details of where a client can lodge a complaint about commission, outgoings or both.

Behind the paperwork is a standard of effort. Agents and representatives must minimise disputes with clients, and must make every effort to minimise and resolve disputes about their performance. The duty to inform runs to both sides of a transaction: the page speaks of telling clients and consumers alike about the agency's procedures.

Taking a complaint to Consumer Affairs Victoria

A complaint that the agency cannot settle may go to the regulator. Consumer Affairs Victoria's complaint page, dated 20 January 2025, describes who can use its form and what happens next.

The form is for a property buyer, a seller or a rental provider complaining about a Victorian estate agent. Renters are directed to the regulator's separate process for renting disputes. Unfair practices such as underquoting are reported through a different channel, which the regulator calls "Report unfair business practices".

The order of steps matters. The regulator says a person must first try to resolve the problem directly with the agent or the agency, and that without this it will not be able to take the complaint further. The regulator gives information and advice on real estate matters, offers dispute resolution services, and also advises agents on their obligations.

The page lists what to have ready: the name and contact number of the agent and the agency, the agency's address, the date the problem occurred, any contracts or agreements, any payments made and a daytime phone number. The online form has three stages, with 20 minutes allowed for each; a stage clears its data after 20 minutes.

Lodging a form does not guarantee action. Consumer Affairs Victoria says each complaint is assessed against its regulatory approach and compliance policy, with priority given to consumers at greatest risk of harm and to issues that could cause widespread harm to Victorians. A person will hear back where the earlier steps were completed and the matter remains unresolved, where the regulator decides it needs to be involved, where there is evidence the agency is not complying with the law, where the issue could have a broader impact, or where the regulator is the most appropriate body.

What the regulator's pages leave open

Several questions a reader may bring to this subject are not answered by the pages read for this guide, and they are named here rather than filled in.

The first is penalties for a breach of the conduct regulations themselves. The professional conduct page gives no section numbers and no penalty amounts; it points to a separate penalties page. The only maximum verified for this guide is the one for section 55.

The second is what happens to a licence. The pages read do not describe the powers of the Business Licensing Authority, and they mention the Victorian Civil and Administrative Tribunal only as a place a person may apply to. What each body can order after a breach is therefore not stated here.

The third is price advertising. The rules on underquoting and on the price statements given to buyers are a separate part of Victorian law and the conduct pages do not set them out; no page on that subject, or on any recent change to it, could be read for this guide. The complaint page says only that underquoting is reported as an unfair business practice.

The fourth is the text of the regulations. Consumer Affairs Victoria summarises the duties without regulation numbers, and one of its pages still names the regulations of 2008. Where the exact wording of a duty decides a dispute, the regulations as published on the Victorian legislation register are the authority, and the regulator's pages are a guide to them.

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.

About Kooky and Shaka →