Seller Beware: New Commission Triggers Under Queensland’s Updated Disclosure Regime
As part of Queensland’s property law reforms, sellers and agents are now navigating the new Sellers Disclosure Statement (SDS) requirements under the Property Law Act 2023.
While reviewing a recent Form 6 Appointment of Agent, we noticed a quiet but important change to the standard term 5 – the clause that sets out when an agent’s commission becomes payable.
You may already be familiar with the following scenarios which can trigger the need for agent’s commission:
· The Property sale successfully reaching Settlement;
· the Seller defaults and the Contract is terminated by the Buyer;
· When the Contract is not completed and as a result the Buyer forfeits part or all of their deposit; and
· When the Buyer and Seller mutually agree to end the contract.
However, there’s now a new inclusion worth your attention.
What’s New
Under the updated Form 6, an agent’s commission is now payable where a Buyer terminates under section 104 of the Property Law Act 2023 because the Seller’s Disclosure Statement (SDS) was not provided, incomplete, or inaccurate.
In other words, even if the Seller isn’t liable to the Buyer for compensation due to the disclosure error, they may still have to pay the full sales commission to the agent. Importantly, this will leave the Seller liable for the commission without being able to draw on the Deposit to offset that cost.
Why It Matters
This change highlights the increasing weight being placed on accurate and compliant disclosure. A rushed or incomplete SDS could have serious financial consequences, not only by risking the contract, but also by triggering commission payments for a sale that doesn’t proceed.
Not Just a Box to Tick
Sellers should take the SDS/Form 2 process seriously. It really isn’t just a formality to “slap together and send off.” Ensuring the disclosure is complete, correct, and reviewed carefully could save thousands in unnecessary costs.
For legal practitioners, it may also be worth building this new risk into your client advice, so Sellers fully understand the potential consequences of non-compliance before signing off.
Disclaimer: This article is general in nature and does not constitute legal advice. If you require legal advice in relation to your personal circumstances, you must formally engage our firm or another firm to provide legal advice in relation to your matter. Bradley & Bray lawyers take no responsibility for any use of the information provided in this article.
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