Decision ris proposal for national licensing of the property occupations

4.Nominees

National licensing will have agency licences, an employee registration and an auctioneer’s licences. The Occupational Licensing National Law Act 2010 (the National Law) provides that when a body corporate does not hold the relevant technical skills (licence), and applies for an agency licence, they will be required to nominate a nominee. The nominee will be an individual licensed to undertake the relevant regulated work. The nominee will be a director or an employee and agree to hold the responsibility of nominee (as set out in the relevant jurisdictional conduct legislation). A body corporate may choose to have more than one nominee.

The nominees for the property occupations are described in Table 3.8. See discussion later in this chapter.

Table 3.8: Nominees for the applicable licence categories

Agency licence category	Licence held by nominee
Real estate agent	Real estate agent
Business agent	Business agent
Strata managing agent	Strata managing agent

5.Exemptions

The National Law makes it an offence for an individual or business entity to undertake regulated work unless that individual or business entity holds a licence or is exempt.

Under amendments proposed to the National Law a person must not carry out regulated work unless the person:

holds a licence to carry out the regulated work

is exempt under the national law from the requirement to hold a licence to carry out the regulated work

is exempted by the NOLA, in accordance with the national law, from the requirement to hold a licence to carry out the regulated work.

The proposed classes of persons who would be exempt from the requirement to hold a licence to carry out regulated work are described in Table 3.9. See discussion on exemptions, including the exemption for related entities later in this chapter.

Table 3.9: Proposed classes of person exempt from holding a licence

Class of person
The State within the meaning of section 8 (2) of the National Law.^23
A local government or local council.
A public guardian^24.
A public trustee^25.
An executor, administrator, trustee, liquidator, official receiver, trustee or assignee of a bankrupt for the purposes of exercising his or her functions in that capacity.
An Australian legal practitioner for the purpose only of carrying out the ordinary functions of an Australian legal practitioner.
A person is exempt from holding a business agency licence, if the person holds a financial services licence under the Corporations Act 2001 (Cwlth).
An employee of an authorised financial institution but only in carrying out the ordinary functions of an employee of a financial institution. Authorised financial institution means a financial institution that under a prescribed law is approved or otherwise authorised to receive trust funds or keep trust accounts. Financial institution means an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth.
A person who is carrying out regulated work that consists only of leasing residential real property for less than three months. Two or more consecutive lettings of the same residential property to the same person are to be considered to be a single letting for calculating the length of the lease
A person who, in the person’s capacity as an employee or contractor of another person who holds a strata-managing agent’s licence, carries out strata-managing agency work that consists only of— (i) maintaining or repairing property for which an owners corporation is responsible; or (ii) administrative duties such as book-keeping or clerical work
If the person carries out regulated work only in relation to real property owned by a related entity of the person; and the person discloses in writing, in any advertising or contract related to the regulated work, the person’s relationship to the owner of the real property; and a person who, in the person’s capacity as an employee of a person is carrying out regulated work in relation to real property owned by related entity of the person^26

6.Non-skills based eligibility requirements

Regulatory regimes develop criteria to determine an applicant or licensee’s suitability to hold a licence in specific occupations. These criteria are designed to minimise risks associated with matters such as incompetent work and public and personal safety, and risks to property and money held in trust. Risks associated with property work are summarised in Attachment F.

The issuing or renewal of a licence is premised on reducing these risks by requiring the applicant to meet specific eligibility requirements. For example, an applicant or licensee may be assessed against personal or financial probity conditions, age or health and fitness requirements. The National Law provides for non-skill eligibility criteria that include personal and financial probity requirements.

Relevant person

The National Law provides for the identification of a relevant person(s) for a body corporate, or a person who is a member of a partnership, and that they are subject to personal and financial probity checks. This aims to prevent a person from hiding behind a corporate structure, for example, where an individual has been banned from undertaking work in a licensed occupation and endeavours to use a corporate structure as a front to continue operating in the industry. The proposed relevant persons for the applicable to the property licences are described in Table 3.10. See discussion later in this chapter.

Table 3.10: Proposed relevant person(s) for the property occupations

Licence categories

Relevant person(s)

Real estate agent Business agent Strata managing agent

For a body corporate— (i) each director of the body corporate; and (ii) any other individual in effective control of the business of the body corporate; For a member of a partnership, each member of the partnership. A person in effective control of the business of the body corporate includes an individual who— (a) is regularly or usually in charge of the body corporate’s business; or (b) is in a position to control or influence the conduct of the body corporate’s business in a substantial way.

Personal probity eligibility requirements

The National Law makes provision for the personal probity requirements that would apply to licence applicants. The personal probity requirements for the property occupations are shown in Table 3.11. The requirements include offences against the person and drug trafficking for applicants of real estate agent’s licences and agent’s representative’s registrations. See discussion later in this chapter.

Nominees will not be subject to additional probity requirements beyond those necessary for them to obtain a licence.

Table 3.11: Proposed personal probity requirements

Licence category	Subject of probity check	Personal probity requirement
Real estate agent	Individual Relevant person for a body corporate or a partnership	A person’s criminal history in relation to: offences relating to dishonesty offences relating to misleading or deceptive conduct offences relating to drug trafficking offences against the person. Whether, within the previous 5 years, a conviction for an offence under section 9, 10 or 11^27 of the National Law or a provision of a corresponding prior Act that corresponds to section 9, 10 or 11 of the National Law occurred. The following matters relating to business conduct. This means any action taken against a person under the Corporations Act 2001 in relation to the following: failure to exercise powers with care and diligence failure to exercise powers in good faith and for a proper purpose misuse of position to gain advantage or cause detriment to a company misuse of information obtained by virtue of the person’s position to gain advantage or to cause detriment to a company breach of the procedures under that Act when given a financial benefit to a related party of a company failure to comply with financial reporting requirements under that Act breach of the duty not to trade while insolvent.
Business agent	Individual Relevant person for a body corporate or a partnership	A person’s criminal history in relation to : offences relating to dishonesty offences relating to misleading or deceptive conduct offences relating to drug trafficking offences against the person. Whether, within the previous 5 years, a conviction for an offence under section 9, 10 or 11^28 of the National Law or a provision of a corresponding prior Act that corresponds to section 9, 10 or 11 of the National Law occurred. The following matters relating to business conduct. This means any action taken against a person under the Corporations Act 2001 in relation to the following: failure to exercise powers with care and diligence failure to exercise powers in good faith and for a proper purpose misuse of position to gain advantage or cause detriment to a company misuse of information obtained by virtue of the person’s position to gain advantage or to cause detriment to a company breach of the procedures under that Act when given a financial benefit to a related party of a company failure to comply with financial reporting requirements under that Act breach of the duty not to trade while insolvent.
Strata- managing agent	Individual Relevant person for a body corporate or a partnership	A person’s criminal history in relation to : offences relating to dishonesty offences relating to misleading or deceptive conduct offences relating to drug trafficking offences against the person. Whether, within the previous 5 years, a conviction for an offence under section 9, 10 or 11^29 of the National Law or a provision of a corresponding prior Act that corresponds to section 9, 10 or 11 of the National Law occurred. The following matters relating to business conduct. This means any action taken against a person under the Corporations Act 2001 in relation to the following: failure to exercise powers with care and diligence failure to exercise powers in good faith and for a proper purpose misuse of position to gain advantage or cause detriment to a company misuse of information obtained by virtue of the person’s position to gain advantage or to cause detriment to a company breach of the procedures under that Act when given a financial benefit to a related party of a company failure to comply with financial reporting requirements under that Act breach of the duty not to trade while insolvent.
Agent’s representative	Individual	A person’s criminal history in relation to : offences relating to dishonesty offences relating to misleading or deceptive conduct offences relating to drug trafficking offences against the person. Whether, within the previous 5 years, a conviction for an offence under section 9, 10 or 11^30 of the National Law or a provision of a corresponding prior Act that corresponds to section 9, 10 or 11 of the National Law occurred.
Real estate auctioneer	Individual	A person’s criminal history in relation to : offences relating to dishonesty offences relating to misleading or deceptive conduct offences relating to drug trafficking offences against the person. Whether, within the previous 5 years, a conviction for an offence under section 9, 10 or 11^31 of the National Law or a provision of a corresponding prior Act that corresponds to section 9, 10 or 11 of the National Law occurred.

Financial probity requirements

The National Law provides for the financial probity requirements a person must satisfy to be eligible for a licence. Financial probity eligibility requirements aim to determine whether the financial integrity of the applicant is such that the risk for consumers in dealing with the licensed person is minimised. One of the aims of licensing business entities is to protect consumers from those who have been involved in the mismanagement of business.

The proposed financial probity requirements for each type of applicant and licence category are shown in Table 3.12. See discussion later in this chapter.

Table 3.12: Proposed financial probity requirements

Licence Category	Subject of probity check	Financial probity requirement
Real estate agent Business agent Strata managing agent	Individual Relevant person for a body corporate or a member of a partnership	The NOLA must have regard to the following history of an applicant or a licensee: whether the person is bankrupt or insolvent, compounds with creditors, enters into a compromise or scheme of arrangement with creditors or otherwise applies to take the benefit of any law for the relief of bankrupt or insolvent debtors whether the person has within the last five years been a relevant person for another person who, during that five-year period, was bankrupt, insolvent, compounded with creditors or entered into a compromise or scheme of arrangement with creditors or otherwise applied to take the benefit of any law for the relief of bankrupt or insolvent debtors whether the person fails to pay a penalty, fine or other amount ordered by a court or tribunal to be paid or required to be paid under the National Law or a prescribed law. For a body corporate or a partnership; Whether a relevant person for the body corporate or partnership is bankrupt, insolvent, compounds with creditors or otherwise applies to take benefit of any law for the relief of bankruptcy or insolvent debtors.
Agent’s representative Real Estate auctioneer	Individual	Whether a person who is an applicant or a licensee is not eligible for a licence if the person fails to pay a penalty, fine or other amount ordered by a court or tribunal to be paid or required to be paid under the National Law.