WHEN IS THE AGENT ENTITLED TO CHARGE THEIR COMMISSION IN QUEENSLAND?
A selling agent will be entitled to charge commission and costs in accordance with the Form 6 Appointment and Reappointment of a Property Agent that you sign with them when commencing the sale process. It is important that you carefully review these terms.
IN SHORT, THE SELLING AGENT WILL BE ENTITLED TO CHARGE THEIR COMMISSION IN THE FOLLOWING CIRCUMSTANCES:
1. When the contract of sale settles;
2. If you default under the contract of sale and the contract is terminated by reason of that default;
3. The buyer defaults under the contract of sale and the deposit is liable to be forfeited; or
4. You and the buyer decide to terminate an unconditional contract of sale by mutual agreement.
We recommend ensuring that the total deposit under the sale contract equals or exceeds the commission such that if the buyer defaults and has to forfeit the deposit, the deposit will cover the commission and you are not out of pocket.
It is also important to remember that some costs (e.g. title search) may be payable upfront rather than at settlement.
Further, an agent may be able to charge their commission where the current contract is terminated but a new contract is entered into and settles at a later date and the agent was the ‘effective cause’ of that later contract.
For example, you may enter into a contract with a buyer but they validly terminate under the finance condition. A few months later, the buyer, being in a better financial position, approaches you directly and you enter into a new contract without the agent’s assistance. This contract goes on to settle. The agent may be entitled to charge their commission on settlement as they were the ones to introduce the buyer initially. Whether the agent will be entitled to charge their commission will depend on the particular circumstances (e.g. what actions the agent has taken, the type of appointment, etc.).
