Description

This document explains the General Conditions of the standard Contract of Sale of Real Estate prescribed by the Estate Agents (Contracts) Regulations 2008 their purpose, and how they affect you as a purchaser.

Get a good understanding of the General Conditions of the Standard Form Contract of Sale of Real Estate used by lawyers, licensed conveyancers and estate agents in Melbourne and throughout the state of Victoria.

Is it compulsory for everyone to use the standard Contract of Sale of Real Estate?

No.  The Estate Agents (Contracts) Regulations 2008 impose this requirement on estate agents only.  A lawyer or conveyancer is entitled to draft a contract of sale for their vendor client in any form they determine is appropriate to the needs of the transaction, and to require the estate agent to use it as directed.

However, the standard Contract of Sale of Real Estate was designed with the intention that it should become the standard form of real estate contract so that consumers, estate agents, lawyers and conveyancers can have confidence that the document being used to effect the sale or purchase of real estate is uniform and understood by all parties.

What can an estate agent do with a contract?

Ordinarily, an estate agent who fills in the blanks of any contract for the sale of real estate commits an offence under Section 2.2.2(1) the Legal Profession Act 2004 by engaging in legal practice when not qualified to do so.

However, the Estate Agents Act 1980 provides an exemption in very specific circumstances.

According to Section 53A of the Estate Agents Act 1980:

"An agent or agent's representative is not guilty of an offence against
section 2.2.2(1) of the Legal Profession Act 2004 only because he or she fills
up-

   (a)  a standard form of contract permitted by the regulations or approved
        by the Legal Services Board or a professional association (within the
        meaning of the Legal Profession Act 2004); or

   (b)  a contract prepared by an Australian legal practitioner (within the
        meaning of the Legal Profession Act 2004)."

The estate agent is exempted only if the estate agent "fills up" a contract document.  In other words, the estate agent can do no more than to fill in the blanks of a contract document prepared by the vendor's lawyer or conveyancer.

This document explains the strict limitations on estate agents' handling of real estate contracts.

Can the estate agent choose to replace a lawyer-prepared contract with the standard Contract of Sale of Real Estate?

No.  If the vendor's lawyer  has prepared a contract, the estate agent MUST present this document to the purchaser or the purchaser's legal representative.  An estate agent who deliberately replaces a contract prepared by the vendor's lawyer or conveyancer with a standard form Contract of Sale of Real Estate may be guilty of a criminal offence.

However, it is open to any purchaser to replace a contract provided by the estate agent or the vendor's legal representative with a contract of the purchaser's choice.  The purchaser is entitled to make their offer in any form they choose, and the vendor can accept, reject or amend the contract document as part of the sale negotiation process.

The standard form Contract of Sale of Real Estate is always the best starting point, allowing all parties to commence the negotiation process with a document everyone knows and trusts.