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No Need to Send a Hound to Collect Your Commission

As most residential real estate agents will be aware, it is preferable for a Buyer to pay a substantial deposit which covers the Agent’s commission and advertising expenses, and leave a buffer for the Seller (keeping in mind that the deposit should not go over 10% for established dwellings and 20% for off the plan contracts). However, in tight negotiations, it may not always be possible to secure a Deposit to cover these costs.

It is now commonplace to see special conditions in Contracts of Sale where the Buyer is authorised to pay the balance of the Agent’s commission and advertising expenses owed to the Agent from the balance purchase price on settlement. It is however critical that such a special condition is carefully drafted so that it complies with section 55 of the Property Law Act 1974 – otherwise, you run the risk that the special condition is unenforceable, and you have to end up chasing your commission from the seller post settlement.

Our recommended wording is set out below:

“In the event that the Deposit held by the Deposit Holder is not sufficient to pay the Seller’s Agent its commission (plus GST and advertising expenses) as agreed between the Seller and the Seller’s Agent, then the Buyer and Seller agree that the Buyer is hereby irrevocably authorised and directed to pay the balance commission (plus GST and advertising expenses) on behalf of the Seller to the Seller’s Agent from the Balance Purchase Price on the Settlement Date.

This Special Condition is expressed to be for the benefit of the Agent pursuant to section 55 of the Property Law Act 1974 (Qld). The Seller, by executing this contract, accepts the benefit of this Special Condition on the Agent’s behalf.”

If you have any queries about utilising this special condition, please do not hesitate to contact one of our team at MAP Lawyers who would be happy to assist.

Need More Advice on Property Contracts?

Looking for help with understanding property contracts? Reach out to an experienced conveyancing lawyer at MAP Lawyers today. We can work with you to ensure you are aware of all our options and obligations. Contact us online or call 1300 680 584 today.


Updated: 21/01/2023

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