The Property Occupations Act 2014 (Qld) (the Act), which came into effect in December 2014, has significantly reduced licensing requirements for Queensland agents which may come as a relief to the commercial property industry.
Ordinarily, an agent undertaking the buying, selling, leasing or management of a property in Queensland would be required to obtain either a Queensland real estate agent licence or a resident letting agent licence (licence) (depending on the work undertaken). This would include centre management who undertake the role of letting lots and collecting rent on behalf of a shopping centre owner. The Act, however, provides an exemption for agents acting as centre management in certain circumstances.
When does the exemption apply?
Related entities
The first exemption applies where a shopping centre engages a 'related entity' to undertake the centre management role (including the letting of premises and collection of rent). If centre management is acting on behalf of a related entity and the agent is carrying on that business only in relation to the assets of the related entity, then the related entity is not required to be licensed.
A related entity is:
- an entity which owns a majority of the shopping centre, either directly or indirectly (a parent company); or
- an entity which is majority owned by the shopping centre, either directly or indirectly (a subsidiary company); or
- an entity that is majority owned by the same person who owns the majority of the shopping centre, either directly or indirectly.
It is important to note that while the agent is not required to be licensed, it is still required to disclose in writing its relationship to the shopping centre in any advertising or contract relating to the assets of the shopping centre.
Sophisticated parties
The second exemption applies where the non-residential property (the shopping centre) has:
- A total gross floor area of at least 10,000mSUP>2; or
- A total estimated value of at least $10,000,000.
When a shopping centre meets the above requirements, the centre management of the shopping centre is not required to be licensed.
The changes are expected to significantly reduce the red tape in the industry and the costs of annually renewing qualifications/licenses, continuing professional development and operating trust accounts which are associated with holding a real estate agent license or resident letting agent license under the Act. Notably, centre management who are not required to be licensed are not required to operate a trust account, eliminating the costs of establishing and continuously auditing trust accounts.
It is strongly recommended that you seek legal advice before operating as a centre management of a shopping centre without a licence, as strict penalties may apply if you are in breach of the Act.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
