Disclose your interests in property transactions
By law, you must disclose if you will receive (or expect to receive) any benefits from a sale.
Meaning of beneficial interest
As a licensee, you are regarded as having a beneficial interest in the purchase of the property (including an option to purchase the property) if the buyer:
- is yourself
- is an associate of yours, such as a family member
- is someone acting for either you or your associate
- is a member of a corporation of which you or your associate is also a member
- is a person carrying on a business for profit or gain, and you or your associate have a direct or indirect right to the income or profits of the buyer’s business or the purchase of the property.
If the purchase is made for (or the option to purchase property is held by) a corporation, you are regarded as having a beneficial interest in the purchase if:
- the corporation has 100 members or less and you or your associate is a member of the corporation
- you or your associate is an executive officer of the corporation.
If the purchase is made for (or the option to purchase property is held by) a corporation that is a licensee it is regarded as having a beneficial interest in the purchase if the purchase is made for an executive officer or their associate.
Property can include goods. Goods are personal property that is tangible property. This can include livestock and used motor vehicles.
As a property agent or salesperson, you can enter into a beneficial interest sale, as long as:
- you do not obtain an option to purchase the property from the client
- you do not obtain an option to purchase the property
- before the contract for the sale is entered into, you and the client complete the beneficial interest notice form advising the client of your interest and confirming they consent to you obtaining that interest
- act fairly and honestly in relation to the sale
- the client is no worse off than they would be if the property were sold at fair market value.
If you are unsure whether you have a beneficial interest in a purchase, you should seek independent legal advice.
You must disclose to a buyer if you pay any benefits to a third party. This includes fees, commissions or other benefits (money or otherwise). You must use the approved form to make this type of disclosure.
This form applies to:
- licensed property agents
- property developers (who do not need a licence).
If you sell house and land packages, this will apply to both:
- the building contract
- the land sale contract.
You will need to tell the buyer:
- the full name of the third party
- their relationship with you
- the benefit they will get from you.
Third party agencies might be:
- mortgage brokers
- building or pest inspectors
- marketing agencies
- other real estate agents.
If you’re a property developer, you must also disclose if you have at least a 15% interest in the property.
If a court finds that you committed an offence relating to beneficial interest you may:
- have to repay the client the amount of commission
- be convicted of an offence
- receive a fine or go to jail.