Land agents will be exempt from requirements under the Land Agents Act 1994 when acting on behalf of:
- a large commercial property owner or
- an affiliated entity.
The exemptions apply whether the land agent is performing duties relating to buying, selling or managing property on behalf of the entity.
The exemptions are exclusive to commercial real estate. They do not include residential or rural land – eg agricultural or horticultural.
Commercial real estate definitions
A large commercial property owner owns any property that has:
- an aggregate market value of $10 million or more or
- an aggregate gross floor area of 10,000 square metres or more.
An affiliated entity in relation to a person means:
- an entity that is controlled by the person – ie the person can determine financial and operating policies of the second entity or
- a related entity to a body corporate, such as a director, another body corporate with the same directors or a beneficiary under a trust.
Who exemptions apply to
For the exemptions to apply, the land agent must be performing work on behalf of a large commercial property owner or an affiliated entity of the land agent.
If they do not perform work exclusively on behalf of these entities, they must still hold a registration.
When exemptions commenced
The exemptions, through the Land Agents (Simplify No 2) Variation Regulations 2017 commenced on 1 November 2017.
Some transactions relating to purchasing, selling or managing land or business fall outside the original intent of the Act. For example, a large shopping centre managing and leasing its own stores or a private sale, such as a once-off sale of a residential home or office building.
The development of more complex organisational corporate structures have led to increased regulatory burden. The commercial property sector exemptions removing the regulation of affiliated entities that do not require protection from themselves and large commercial property owners that do not require protections that are surpassed by more complex legal and contractual arrangements.
Examples of exemptions
A large international conglomerate is seeking to invest and undertake development in the central business district, which involves the sale and purchase of certain land and business. The entity contracts a third party with which it has long standing and reputable dealings with internationally. Under these exemptions, the third party will not be required to be a registered land agent to perform real estate work on behalf of the entity, as it meets the threshold of a large commercial property owner.
A commercial shopping centre engages a third party to manage the retailers’ commercial leases. If the shopping centre performed this work, they would not require registration. However, the owner has engaged a third party – a subsidiary of the owner – to manage the leases. The third party is not required to be registered as it is an affiliated entity of the owner. The shopping centre may also be large enough to be deemed a large commercial property owner.
What is needed from 1 November 2017
You are exempt from the requirements under the Act, including registration, only when performing real estate work on behalf of affiliated entities or large commercial property owners.
If you exclusively perform real estate work on behalf of such entities, you may wish to consider whether or not you retain your land agent’s registration. If you surrender your registration and then wish to undertake work for an entity that does not meet the thresholds, you will need to reapply and satisfy the registration criteria.