Estate Agents Act 1980

https://www.legislation.vic.gov.au/in-force/acts/estate-agents-act-1980/128

The Act features provisions which prohibit false or misleading representations concerning the price given by estate agents whether in writing, orally or through advertising material.

To promote appropriate standards of conduct and competency persons in the real estate sector
To protect the interests of persons using real estate services
To ensure that effective procedures exist for the resolution of disputes between persons specified above

Key points:

If an agent (or employee or relative) wants to purchase a property or business the agent has been engaged to sell, they must sign a form prepared by Consumer Affairs Victoria (CAV).
LPLC recommends practitioners refer their vendor client to a valuer for independent valuation advice to ensure the sale is for a 'fair market value’.
Practitioners should explain sections 55 and 55A to their vendor client and recommend they obtain financial advice from their accountant.

Section 55

Section 55 of the Estate Agents Act 1980 (Vic) (the Act) makes it a criminal offence for an agent (or their employees, family members or other related people) to buy a property or business listed or commissioned for sale with their agency. The penalty includes 240 penalty units, imprisonment for two years or both.

The only exception to the prohibition is found in sub-section 55(4) of the Act which reads as follows (note - an example of a ‘principal’ in this section is a vendor selling land):

‘55 (4) A person does not contravene subsection (1) or (2) if-

(a) the person-

(i) before a contract for the sale of the real estate or business is entered into, obtains the principal's written acknowledgment in the form approved by the Director that the principal-

(A) is aware that the person is interested in obtaining a beneficial interest in the real estate or business; and

(B) consents to the person obtaining the interest; and

(ii) acts honestly and reasonably in relation to the transaction; and

(b) no commission or other reward is payable in relation to the transaction; and

(c) the principal is in substantially as good a position as the principal would be if the real estate or business were sold at fair market value.’

This version of section 55 and section 55A came into operation on 23 August 2011