New legislation that severely limits real estate agents’ ability to draft contracts will boost consumer protection but lead to increased frustration, a Gold Coast solicitor has warned.

Hickey Lawyers partner David Nematalla said, under recent changes to Queensland law, agents could no longer legally draft real estate contracts or agreements that involved additional clauses, special conditions or annexures.

“The new legislation has implications for buyers, sellers and real estate agents,” he said.

“While agents can still draw up simple contracts, involving little more than filling in the blanks, they will no longer be able to add any additional clauses, which are quite commonplace in real estate contracts.”

Mr Nematalla said the new laws took effect in Queensland in July, with the introduction of section 24 of the Legal Profession Act 2007.  He said under the Act all ‘legal practice’, such as drafting contracts and giving legal advice, must be conducted by a solicitor.

While the maximum penalty for agents caught flouting the law is $22,500 or two years imprisonment, consumers will not be penalised.

“Purchasers and vendors will not be able to use the fact a contract has been drafted by a real estate agent as an excuse to get out of their agreement,” said Mr Nematalla.

“If they do have concerns, however, they should refer the matter to their solicitor.”

Mr Nematalla said the legislation would affect real estate contracts and tenancy and leasing agreements.

“Lawyers will now have to be a lot more involved in areas they have not previously been, for example some residential tenancy agreements that contain special conditions or annexures may now have to be prepared by a solicitor, which is something that has not often occurred in the past,” he said.

“As a result, the new legislation is set to make the process of executing a contract or agreement more time consuming.

“The benefit of this for consumers is that it will reduce some of the pressure of signing a contract and allow them more time to seek advice before making decisions.

“It will also improve the quality of contracts, making them clearer and more certain, since solicitors are specifically trained in this field.

“On the flip side, it could also potentially create a lot more frustration for all parties involved, with the contract process slowed.”

Mr Nematalla said real estate agents are likely to be the most affected by the new legislation, but it would also impact on other fields involving preparation of legal documents, for example finance brokers, body corporate managers, builders and banks.

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For further information, please contact

David Nematalla , Partner
Tel: +617 5574 1000
nematallad@hickeylawyers.com.au