Definition
An Agency Agreement (NSW) is a legally required written agreement between a property owner and a licensed real estate agent that authorises the agent to act on the owner’s behalf in relation to a property transaction. It outlines the fees, services provided, commission structure, and the length of the agent’s appointment, and must comply with the Property and Stock Agents Act 2002 (NSW).
In New South Wales, this agreement establishes the formal working relationship between the client (principal) and the agent, clearly defining what the agent is authorised to do and the conditions under which they will be compensated. The agreement must be in writing and signed before the agent begins providing services, such as marketing, negotiating, selling, leasing, or managing a property.
Where Agency Agreements Apply
Agency agreements are primarily used in the real estate industry across New South Wales. Common situations include:
Property Sales
When a property owner wants to sell a residential, commercial, or investment property, they must appoint a licensed agent through an agency agreement before the agent can market or negotiate the sale.
Property Management
Landlords appoint property managers through an agency agreement to manage rental properties, including tenant selection, rent collection, inspections, and maintenance coordination.
Buyer’s Agent Representation
A property buyer may enter into an agency agreement with a buyer’s agent to represent their interests when searching for and negotiating the purchase of property.
Business or Commercial Asset Sales
Business brokers and commercial agents may also use agency agreements when appointed to sell businesses or commercial properties.
Legal Requirements in NSW
In New South Wales, real estate agency agreements must comply with the and associated regulations.