Smart Business Bulletin January 2021

Welcome to the January 2021 edition of the Office of Fair Trading’s (OFT) Smart Business Bulletin, linking Queensland businesses with fair trading information and tips.

Features

Australian Consumer Law - year in review
New training requirements for the real estate industry
Charging fees and commission on rental properties
Fair Trading welcomes new button battery mandatory standards
New laws for Queensland co-ops
Australian Government launches cyber security campaign

Australian Consumer Law - Year in review

The Australian Consumer Law Year in Review 2019-20 report is now available.

The report provides an insight into the work completed by policy officers, educators and regulators to refine and enforce the ACL across the country over the course of the year.

New training requirements for the real estate industry

New training requirements were recently rolled out for people wanting to enter the real estate industry in one of the following registration or licence classes:

auctioneer (property)
chattel auctioneer
limited real estate agent – affordable housing
limited real estate agent – business letting
real estate agent
real estate salesperson and
resident letting agent.

The new training follows an independent review of the national property services training package and consultation with a range of industry bodies such as the Real Estate Institute of Queensland, the Australian Resident Accommodation Managers Association, and the Australian Livestock and Property Agents Association.

The changes ensure qualifications for licence requirements are contemporary and meet industry needs and real estate services customer expectations.

It is important to note the new training requirements only apply to people wishing to apply for a licence or registration. Existing licence holders are not affected by the change.

If you recently completed the old ‘CCP’ training as a precursor to applying for a real estate agent licence or registration, never fear. A transition period is in place until 30 September 2021, so you will not need to redo your training.

Despite the transition period, if you have started the old CCP course but have not yet completed it, we urge you to complete it quickly to avoid obsolete or duplicative units.

Charging fees and commissions on rental properties

There have been several recent instances of residential letting agents and real estate agents failing to appropriately deal with fees and commissions, particularly around cancellations.

The first rule of fees and commissions for agents is that you cannot charge something you don’t have authority to charge, whether in your appointment to act form or another written authorisation.

The second is that agents must account to their clients for everything they receive and disburse. Agents cannot report their rental income as the net amount. They need to show the gross payment received and any deductions, then the net amount.

Accommodation cancellation fees

Booking cancellation fees for accommodation may be applicable in certain circumstances when a guest cancels their booking. All cancellation terms and conditions must be clear and transparent at the time of booking, and they must not:

enable one party (but not the other) to avoid or limit their obligations under the contract
enable one party (but not another) to breach or terminate the contract
penalise one party (but not another) for breaching or terminating the contract.

Who gets the cancellation fee?

When the terms and conditions allow for it, a booking cancellation fee can be kept from deposit money a guest has paid for accommodation. In some cases, usually depending on the way the booking was made, such as via a third party, guests also pay a booking administration fee on top of the accommodation costs.

If a guest cancels their booking and is penalised with a cancellation fee in accordance with the agents booking terms, the fee is generally considered rental income and should be paid to the owner.

Where an appointment to act refers to an agent’s commission expressed in the form of a percentage, this rate of commission must be calculated on the actual amount of rent collected, which in the event of a cancellation, may only be part of a retained deposit.

Agents may also claim any expenses relating to cancellations that are stipulated in the appointment to act. If cancellation expenses are not stipulated in the appointment, the agent cannot claim them, and if a cancellation fee is retained from a guest’s deposit, this must be paid to the owner.

An exception to this rule would be where a booking administration fee has been charged to the guest in excess of the accommodation costs and is not payable to the owner.

At the end of each month, the agent is required to provide an account to their clients that clearly shows each amount the agent has received and exactly how it was paid out. A client should be able to ascertain from this monthly account if a deposit was received from a guest for a booking that was cancelled and how the deposit was distributed. I.e., the amounts returned to the guest, claimed by the agent, and paid to the owner.

For more information on property industry rules or to download a copy of our trust accounts guide, visit our website.

Authorised fees and commissions

Agents must always ensure they deal with trust money appropriately.

Agents engaged to collect rent on behalf of a client, must be appointed with a valid appointment to act form. This form should clearly set out:

the service to be performed
the fees, charges and any commission payable for the service
when any fees, charges and any commission for the service become payable
any expenses the agent is authorised to incur in the performance of each service or category of service, such as advertising and marketing costs
the sources and estimated amount or value of any rebate, discount, commission or benefit you may receive for any expenses you may incur in the performance of the appointed service/s
any condition, limitation or restriction on the performance of the service.

Where an appointment refers to commission expressed in the form of a percentage, this rate of commission must be calculated on the actual amount of rent collected (including a deposit).

Fair Trading welcomes new button battery mandatory standards

New mandatory safety and information standards around the supply of button batteries and consumer goods that contain or are powered by them came into effect on 22 December 2020.

In Australia, approximately one child a month sustains a serious injury from swallowing or inserting button batteries and sadly a Queensland toddler died as a result of ingesting button batteries.

Button batteries are ticking timebombs for children and can be found in a wide variety of products in our homes such as remote controls, torches, calculators, watches, scales, car keys and light up novelties.

Many of these items are cheaply made and the battery compartments are not secure or can break open easily, releasing the batteries.

The new safety and information standards will require manufacturers to:

create secure compartments so children can’t access the batteries
conduct compliance testing to ensure the battery is secure
provide child resistant packaging for button batteries
place warning labels and alerts on products that contain button batteries, including on packaging and instructions.

All businesses that supply button batteries or products containing button batteries must comply with the standards by June 2022, however, the sooner they are adopted the safer our children will be.

We strongly encourage traders to transition to the new standards as quickly as possible to help prevent further injuries.

New laws for Queensland co-ops

As foreshadowed in our last edition, on 1 December 2021, Queensland adopted a nationally consistent approach to regulating cooperatives by replacing the Cooperatives Act 1997 with the Co-operatives National Law Act 2020 (CNL).

Queensland’s 138 co-operatives have around 19,000 members and a collective revenue of $250 million, making them a vital part of Queensland’s economy.

Under the new law, cooperatives will:

no longer need to register and pay a fee in each state and territory they wish to operate in, as the CNL provides mutual recognition without requiring separate state registration
be able to raise funds to finance their operations through the issue of co-operative capital units to members or non-members
if classed as a small cooperative, no longer need to have their financial statements audited and lodge an audit report with the Office of Fair Trading.

For more information on the changes, visit www.qld.gov.au/fairtrading, email Registration.Services@justice.qld.gov.au or call 13 QGOV (13 74 68).

Australian Government's cyber security campaign

The Australian Cyber Security Centre (ACSC) recently launched a year-long campaign against cybercrime.

The campaign warns businesses and consumers that cybercriminals never switch off and urges Australians to ‘act now, stay secure’ by accessing the easy-to-follow cyber security advice at www.cyber.gov.au.

Their first topic, which launched last month, is ransomware, a type of malicious software that makes your computer or its files unusable unless you pay a fee. Anyone can be the victim of a ransomware attack at any time and the ACSC is seeing an increase in ransomware attacks in Australia.

Check out ACSC’s ransomware guides and information on how to secure your business at www.cyber.gov.au/ransomware.

What’s in the news?

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