HG Alert: PAMDA Legislation to be Restructured - 30 Nov 2010

The mere suggestion of further amendments to the Property Agents and Motor Dealers Act 2000 (PAMDA) is enough to send property agents and developers into a head spin. This legislation has been the subject of four substantial pieces of amending legislation, as well as numerous other minor amendments, since coming into effect.

On 24 November 2010, the Queensland Government introduced four bills into Parliament, with the objective of splitting PAMDA into four separate pieces of legislation to regulate the different areas relevant to agency practice and procedures.

The proposed new legislation comprises:

  • the Property Agents Bill, which deals with the functions of real estate agents, auctioneers of real property and resident letting agents;
  • the Motor Dealers and Chattel Auctioneers Bill, which, as its name suggests, provides for the licensing of motor dealers and chattel auctioneers;
  • the Commercial Agents Bill, which regulates the activities of agents involved in debt collection, process serving or chattel repossession; and
  • the Agents Financial Administration Bill, which provides for the administration of trust accounts held by agents.
  • The new laws will come into effect on a day fixed by proclamation, and are expected to commence in the middle of 2011. We will monitor the progress of the bills through the Queensland Parliament and will keep you updated on their progress.

Why have these bills been introduced?

The Service Delivery and Performance Commission was a short-lived public service body established to review and identify possible cost savings and efficiencies in Queensland Government departments. Before it ceased to function in 2008, the Commission recommended separating PAMDA as a way of reducing costs. According to the Fair Trading Minister, who introduced the package of legislation into Parliament, the new legislation will also enhance industry understanding of agency legislation and the way the legislation regulates their interests.

In time, splitting PAMDA will also facilitate the implementation of the National Occupational Licensing System, agreed by the Council of Australian Governments in 2008, which will apply to property agents and a number of other occupations. Property agents' licensing arrangements will eventually fall under the national system, while the other categories of licence will be retained under Queensland laws.

New features of the legislation

Aside from this restructuring, there is little that is new in the package of legislation. However, some new features of the legislation include the following:

  • The position regarding the use of independent contractors by property agents will be clarified by the Property Agents Bill. If a person is engaged as an independent contractor by a property agent, that person will be deemed to be employed for the purposes of the Act. A property agent must not employ a person as a property agent or property agent salesperson unless that person holds a relevant licence.
  • Under the Motor Dealers and Chattel Auctioneers Bill, a new licence category of 'chattel auctioneer' has been created. A chattel auctioneer may sell, or offer for sale or resale, any goods by way of auction.
  • Livestock sales, other than by auction, will no longer be regulated by a licensing regime. The sale of livestock by auction will be treated as a sale of chattels, to be conducted by a chattel auctioneer.
  • The Agents Financial Administration Bill provides for a reduction in some of the maximum penalties that currently apply for offences under PAMDA. This will mean that an infringement notice can be issued for a minor trust account breach, which is seen as a more efficient way to deal with such a breach. Many of the offences under PAMDA must be treated as indictable offences, for which an infringement notice cannot be issued, as they carry a maximum penalty of three years imprisonment.

Residential property sales

In recent times, the most contentious parts of PAMDA have been those associated with residential property sales. As originally conceived, those provisions were designed to deal with certain land marketeering practices prevalent in Queensland in the 1990s, where unsolicited invitations to attend property information sessions resulted in property sales. Eventually, the scope of these provisions was expanded so that consumer protection measures, such as the cooling-off period and the requirement for statutory warning statements, came to apply to all contracts for the sale of residential land in Queensland (other than those resulting from an auction), whether or not an agent was involved in the sale.

The complexity of the residential land sales provisions meant that buyers could avoid contracts by relying on minor and technical breaches in connection with the delivery of documents. Under pressure from the property industry, the Government acted earlier this year to address some of the overly complicated features of PAMDA, and to simplify the process of entering into a residential property sales contract.

It may be a relief to those involved in the property industry to learn that the new package of legislation - at least in the form in which it has been introduced into Parliament - does not change any of the existing consumer protection provisions of PAMDA relating to residential property sales. The existing provisions are replicated (with minor drafting changes) in the Property Agents Bill.

For more information about the new package of legislation, please contact HopgoodGanim's Commercial Property team.