The Commission and Disbursement Policy applies to the sale of any residential property valued at $500,000 or less.
The policy is based on the provisions set out in the Legal Notice No.76, Real Estate Agent (Fees, Forms and Appeals) (Amendment) Regulations 2022, that came into force on Thursday, May 26th, 2022.
Commission rates should not exceed two percent (2%) if the sale price for the residential property is $500,000 or less. In addition, agents are allowed to charge disbursements for marketing.
Commission and disbursements charged must be agreed upon in writing and paid upon completion of the service.
REALB’s Registrar Peni Komainavoka says there are a few things agents should be mindful of when dealing with residential properties valued at $500,000 or less.
He said that all disbursements must be related to the marketing and sale of the property and details must be mutually agreed upon by both parties and clearly outlined in the agreement.
“For instance marketing charges incurred during the advertisement of the property must be treated separately from commission, and must be mutually agreed to by both parties and detailed in the listing agreement, ”Mr Komainavoka said.
Agents are required to immediately issue a signed copy of all agreements and documentation to the vendor (registered owner of the property) and maintain a copy of their records for the purpose of compliance checks by the REALB.
Furthermore, copies of real estate agency agreements, documents and correspondence as well as complaints or claims with investigation results and actions taken must be maintained by the agency and produced upon demand.
The Real Estate Agents (Amendment) Act 2022 allows members of the public to register their complaints on the conduct of agents with the Board.
Complaint must be lodged in writing to the Registrar, outlining the grounds for it and submitted with evidence, to substantiate the claims made.
According to Mr Komainavoka, in the first instance, the Board will work on an early resolution mediation based on the evidence presented; if the mediation fails, parties will be able to present their case to the Board in an inquiry under Part 9 of the Act.
He added, “the party aggrieved by the Board decision has the right to appeal to the Minister for Commerce, Trade, Tourism and Transport within 28 days of being notified of the decision.”
A disbursement is defined as an out-of-pocket expense incurred by the real estate agent or an expense or payment that is directly related to the sale of a property. The real estate agent will claim this cost from the property owner as part of their arrangement to sell the property.