There are restrictions placed on newly licensed salespersons during their first 6 months. Below we outline what they can do, how to supervise them and your supervision obligations under the Real Estate Agents Act 2008.
Under the Act, a salesperson must be properly supervised and managed by an agent or a branch manager when they carry out agency work.
This means that supervisors must exercise enough direction and control to ensure that the salesperson is competent and complies with the requirements of the Act.
Salespersons must be supervised whether they are engaged as an employee or an independent contractor. Agents who engage a salesperson as an independent contractor are liable for the acts and omissions of the salesperson in the same manner and to the same extent as if they were an employee.
Other steps that supervisors should take with a new salesperson include:
- checking before the new salesperson runs open homes to ensure that they are knowledgeable about the property and have information on hand to assist buyers
- having regular one-on-one meetings to go through any questions or problems
- sitting in on phone and face-to-face conversations to observe how they interact with clients and buyers.
When you are satisfied that a new licensee is conducting real estate agency work on your behalf in a competent and legal manner, you can relax your supervision.
The Lawyers and Conveyancers Act 2006 does not allow licensees who hold a salesperson's licence to prepare sale and purchase agreements or give advice about them until they have had at least 6 months' experience as a salesperson.
This means that a newly licensed salesperson can’t prepare sale and purchase agreements or advise clients or customers about legal rights and obligations that are incidental to preparing these agreements. When the new salesperson has had 6 months of real estate agency work experience, this prohibition is lifted.
Note that working as a personal assistant in real estate or as a residential property manager does not count towards real estate experience. Only experience as a salesperson (or higher-level licence class) counts towards real estate agency work experience as a licensee under the Act.
What can a new salesperson do?
Newly licensed salespersons can do other real estate agency work during their first 6 months, including:
- signing up clients on behalf of their agent (obtaining listing agreements)
- marketing activities
- undertaking comparative market analysis and providing appraisals for prospective clients
- conducting open homes and doing follow-up calls
- building a prospects database.
Before allowing a salesperson to carry out real estate agency work, you need to be satisfied that they can carry out this work competently, and you’ll need to ensure that you can properly supervise and manage this work.
Preparing sale and purchase agreements
As the supervisor for a new salesperson, you will need to prepare any agreement for sale and purchase and give any advice about legal rights and obligations to clients and customers.
Having the new salesperson observe your contractual discussions with clients and customers is a good way to demonstrate best practice.
The Act does not require salespersons to be supervised physically. If you can properly supervise and manage them, remote management is possible.
For example, open homes can be conducted by a salesperson without the branch manager or agent being physically present. You should be available to deal with any situations that may arise that the salesperson may not be equipped or experienced to deal with.
Regular in-house staff training should be provided to ensure there are sufficient protocols and guidance to assist salespersons to deal with difficult situations.