Commission is an inherently unfair method of remuneration, completely unrelated to the time, effort and skills associated with real estate sales. This is why carefully worded contract is needed to create an “entitlement” to the windfall that is commission. It will be interesting to see how this debacle plays out, and whether it will change the way salespersons in this industry are paid for what they do.
Melbourne firm SLF Lawyers, which has issued writs to CAV and the REIV, received a memorandum of advice that claimed both parties had breached their legal obligations to agents and vendors. “The duty was breached, because the statement was clearly wrong, and found to be so by a County Court judge, and again on appeal. “To put the allegation at its simplest, whomever approved the form on behalf of the director (CAV) did not properly read the Estate Agent Act. Further, whomever at the REIV had responsibility for preparing the pro forma, did not properly read the Estate Agent Act either,” the memorandum of advice stated. SLF Lawyers partner John Gdanski said he expected “opportunistic vendors” to exploit the recent court decision.
Peter Mericka B.A., LL.B – Australian Legal Practitioner, Consumer Advocate and Principal of Lawyers Real Estate Pty Ltd and Lawyers Conveyancing – Melbourne – Victoria.