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CPD Covers sobering compliance obligation

Continual professional development (CPD) is not just a learning program real estate agents must complete; it also provides a wealth of information on issues affecting the industry as a whole.

The industry now reflects the wider business community with many micro businesses run by commission-based agents with their own employees. When the Federal Government’s Fair Work laws were introduced in July 2009, it changed the way agencies operate. New awards and national employment standards commenced operation on January 1, 2010, and new laws for unfair dismissal were reintroduced through the Fair Work Act.

New award system

Real Estate Employers Federation (REEF) executive director Greg Patterson said this meant changes for small operators, many of whom thought they were exempt from these laws because of the agency size. “As soon as you have one employee you have obligations and responsibilities to that person. In terms of dismissal and terminating an employee who you are dissatisfied with, then there are certain rules and regulations that need to be followed and whether you have one staff or 100 staff, you need to be aware of what those obligations are,” he explained.

For example, an agent with one professional assistant would need to comply with the Fair Dismissal Code if they want to terminate that assistant. “In essence, the code requires that before you terminate an employee on the basis of conduct, performance or behaviour that you must have given that employee at least one warning. Preferably that warning would be in writing because if it is not in writing then there could be a challenge or a contest as to whether it was given or not,” Mr Patterson said, explaining it was better to avoid a text message warning.

During January, REEF received more than 1000 phone calls from real estate agents unsure of their responsibilities. A small real estate agency and its directors on the NSW Central Coast were fined more than $50,000 over a pay dispute with an employee under these laws. “Unfortunately I think that many small operators think that it won’t happen to them because they’re so small that it is not worth worrying about,” Mr Patterson said.

The 10 national employment standards explain minimum terms of employment that all Federal system employers must comply with, such as the maximum hours of work that can be performed per week, the right to request fl exible working arrangements, leave provisions, termination notice, redundancy pay and providing a fair work information statement when employees start with the business.

There are two new modern awards that will apply to real estate offi ces. The Real Estate Industry Award 2010 covers sales people, irrespective of whether they are working on a salary or commission-only basis, and applies to sales associates, sales supervisors, property management and strata management employees. The second award is the Clerical or Clerks Private Sector Award 2010, applying to clerical administrative employees. Copies of these awards must be made available to the employees covered by them.

REEF lobbied the government regarding the award covering commission-only agents, Mr Patterson explained. “They have accepted and adopted our proposal for commission-only arrangements in the real estate industry. I think that employers will fi nd these arrangements extremely fl exible, much more fl exible in my view than we previously had available to us,” he said and added that commission-only and independent contractors are different.

“The independent contractor is just that - independent of the principal business. They work on their own and they have a business structure and they have their own employees. Commission-only agents don’t get paid a salary or allowances, and are paid purely on performance. If you sell nothing, you get nothing.”

Other improvements to the award include commission-only agents being permitted to operate unlicensed and more fl exibility when it comes to including costs, like annual leave and sick leave, in the commission arrangement.

Avoid spam

Moving from workplace laws to privacy, Kaplan Sales Manager Bill Robertson said agents needed to take notice of the Privacy Act when it came to using people’s information. “You have to give the consumer the right to say ‘I don’t want this anymore, please take me off your list’,” Mr Robertson said. “It’s not just database marketing or email; it’s telephone calls with the Do Not Call Register”, blocking out a vehicle number plate so someone can’t fi nd out the car that belongs to the property and how information is stored,” he said.

Fines for not complying with the Privacy Act legislation can be as high as $1.1 million for not offering an opt-out function on permission-based marketing. Unaddressed mail, such as a letterbox drop to a street about a new listing, are not included under these privacy laws.

Monique Durego from RP Data explained the privacy laws further, saying they extended to the National Privacy Principals, The Spam Act and The Do Not Call Register Act. It is important to note if someone opts out of marketing from your business, you cannot proactively market to them, however if they come back asking you to list their property or are interested in a property you have listed, you can communicate with them.

“Someone opting out doesn’t mean that you will never be able to do business with that person. They might say, ‘I like your emails and please continue to send them to me, but I am on the Do Not Call Register so therefore do not proactively ring me’. Your database needs to be sophisticated enough to be able to capture that information and you know you don’t ring that person, but you can certainly send them emails,” Ms Durego said.

When talking about agents complying it can seem very gloomy, but Mr Robertson said, “80 per cent of the compliance things are friendly and they are there for you. You will become a better practitioner; you will get a better reputation. You will kill to keep that reputation, so treat it as a friend not as an enemy”.

As part of Kaplan and Real Estate Academy’s CPD modules they have developed a sales compliance checklist. The list covers issues such as the notice needed to substantiate an agent’s estimate of a property selling price, exclusive sales agency agreements and who can enter a contract. It can be downloaded from www.kaplanprofessional.edu.au.

 

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CPD Covers sobering compliance obligation