Settlement Agents Act 1981
Settlement Agents Code of Conduct 2016
Western Australia
Settlement Agents Code of Conduct 2016
Contents
Part 1 — Preliminary
1.Citation1
2.Commencement1
3.Terms used1
4.Code applies to all licensees2
Part 2 — General duties
5.Knowledge of relevant law3
6.Acting in best interests of client3
7.Duty of care, diligence and skill3
8.Duty of honesty3
9.Confidential information3
10.Client’s instructions4
11.Client to be fully informed4
12.Misleading or deceptive conduct4
13.Unconscionable conduct4
14.Fiduciary obligations5
Part 3 — Employees
15.Supervision and control of employees6
16.Sufficient supervision of settlement agent business6
Part 4 — Conflict of interest
Division 1 — General
17.Conflict of interest8
18.When licensee may act for more than one party8
19.When business may act for more than one party9
20.Disclosure of interests9
Division 2 — Specific
21.Terms used10
22.Disclosure notice to be given11
Part 5 — Appointment of licensee and payment of fees
23.Costs disclosure13
24.Payment not to exceed service amount unless exception applies14
25.Fees for referrals15
26.Appointment to act16
27.Consumer may request an itemised bill16
27A.Transitional provision for the Settlement Agents Code of Conduct Amendment Rules 202016
Part 6 — Specific duties of licensee
28.Retaining copies of documents17
29.Licensees duties in arranging a settlement17
30.Legal advice17
31.Change of settlement agents18
Part 7 — Money
32.Proper accounts to be kept19
33.Money and documents held on client’s behalf19
Part 8 — Repeal and transitional
34.Settlement Agents’ Code of Conduct 1982 repealed20
35.Transitional20
Schedule 1 — Forms
Notes
Compilation table27
Defined terms
Settlement Agents Act 1981
Settlement Agents Code of Conduct 2016
These rules come into operation as follows —
(a)rules 1 and 2 — on the day on which this code is published in the Gazette;
(b)the rest of the rules — on the day after that day.
(1)In these rules —
Act means the Settlement Agents Act 1981;
appointment to act means an appointment to act as a settlement agent required under section 43 of the Act;
client, in relation to a licensee, includes —
(a)where the context permits, a prospective client; and
(b)a client of an employer, principal or partner of the licensee; and
(c)a client of a person employed in or engaged by the licensee;
disclosure notice means a notice in writing in Form 2;
Form means a form in Schedule 1;
regulations means the Settlement Agents Regulations 1982.
(2)A term has the same meaning in these rules as it has in the Act unless the contrary intention appears in these rules.
4.Code applies to all licensees
(1)Each licensee who is a settlement agent acting, directly or indirectly, for a client must comply with these rules.
(2)Subrule (1) applies to, and in respect of, all licensees including where the licensee is a principal of a business or an employee of another licensee.
A licensee must have a complete knowledge of and comply with —
(a)the Act, the regulations and these rules; and
(b)the duties and obligations imposed on a licensee by the Act, the regulations and these rules.
6.Acting in best interests of client
When acting as a settlement agent for a client a licensee must act in good faith in the best interests of the client.
7.Duty of care, diligence and skill
When acting as a settlement agent for a client a licensee must exercise due care, diligence and skill.
When acting as a settlement agent for a client a licensee must be honest in all dealings with the client, other settlement agents and other persons involved in a transaction.
(1)A licensee must treat as confidential information obtained while acting for a client that has not been made public and that —
(a)is by its nature confidential; or
(b)was specified as confidential by the person who supplied it; or
(c)is known by the licensee to be confidential.
(2)Information to be treated as confidential under subrule (1) must not, directly or indirectly, be disclosed by a licensee to another person, unless —
(a)the disclosure of the information is required by law; or
(b)the client is fully informed of the proposed disclosure and agrees to it in writing.
When acting as a settlement agent for a client a licensee must —
(a)provide each service relating to the client’s instructions within a reasonable time after receiving the instructions; and
(b)act in accordance with the client’s reasonable instructions.
11.Client to be fully informed
When acting as a settlement agent for a client a licensee must communicate regularly, and in a timely manner, with the client and keep the client well informed of matters relevant to the client’s interests.
12.Misleading or deceptive conduct
When acting as a settlement agent for a client a licensee must not engage in conduct that is misleading or deceptive or is likely to mislead or deceive within the meaning of the Australian Consumer Law (WA) Part 2‑1.
When acting as a settlement agent for a client a licensee must not engage in unconscionable conduct within the meaning of the Australian Consumer Law (WA) Part 2‑2.
A licensee must comply with any obligation that may arise as a result of any fiduciary relationship between the licensee and a client.
15.Supervision and control of employees
(1)A licensee who carries on a business as a settlement agent must take all reasonable steps to ensure that every person employed in or engaged by the business whether paid or unpaid complies with —
(a)the provisions of the Act, the regulations and these rules as are applicable to the person; and
(b)any other law applicable to the business and the person.
(2)A licensee who carries on a business as a settlement agent is responsible for the supervision and control of the work of every person employed in or engaged by the business whether paid or unpaid.
16.Sufficient supervision of settlement agent business
(1)In this rule —
business means a business as a settlement agent carried on by a licensee;
professionally conducted, in relation to carrying on a business from a registered office or registered branch office, means that the business is conducted in accordance with the Act, the regulations, these rules and any other law relevant to the business.
(2)If a licensee who carries on a business is an individual the licensee must —
(a)provide sufficient supervision to ensure that the business is professionally conducted; and
(b)ensure that each manager of a registered branch office of the business provides sufficient supervision to ensure that the business carried on from that office is professionally conducted.
(3)If a licensee who carries on a business is a firm or a body corporate —
(a)each partner of the firm, or each director of the body corporate, who is a settlement agent must —
(i)ensure that each person in bona fide control of the business provides sufficient supervision to ensure that the business is professionally conducted; and
(ii)ensure that each manager of a registered branch office of the business provides sufficient supervision to ensure that the business carried on from that office is professionally conducted;
and
(b)each person in bona fide control of the business who is a settlement agent must —
(i)provide sufficient supervision to ensure that the business is professionally conducted; and
(ii)ensure that each manager of a registered branch office of the business provides sufficient supervision to ensure that the business carried on from that office is professionally conducted.
(4)A manager of a registered branch office of a business who is a settlement agent must provide sufficient supervision to ensure that the business carried on from that office is professionally conducted.
A licensee must not act, or continue to act, as a settlement agent for a client if a conflict of interest or potential conflict of interest exists between the interests of the licensee and the interests of the client, unless —
(a)the licensee fully informs the client, in a disclosure notice, of the conflict or potential conflict; and
(b)the client agrees in writing to the licensee acting, or continuing to act, as a settlement agent for the client.
18.When licensee may act for more than one party
(1)If a licensee proposes to act for more than one party (the parties) to a transaction then before each of the parties gives consent in accordance with the requirements set out in section 46(3) or 47(3) of the Act, the licensee must complete a disclosure notice and give it to each party.
(2)Having started to act for more than one party to a transaction in accordance with section 46(3) or 47(3) of the Act, a licensee must not continue to act for any of the parties if —
(a)there is a real possibility that the licensee would be required, in order to comply with the Act, the regulations and these rules, to act contrary to the interests of a party; or
(b)the interests of one party require withholding information or advice from another party.
19.When business may act for more than one party
(1)A licensee who carries on a business as a settlement agent must ensure that a person employed in or engaged by the business (the person) does not act as a settlement agent for a party to a transaction if another person employed in or engaged by the business acts for another party to the transaction.
(2)Subrule (1) does not apply if, before the person is appointed to act as a settlement agent, each party described in that subrule —
(a)acknowledges in writing that the party is aware that another person employed in or engaged by the business acts, or proposes to act, for another party to the transaction; and
(b)gives written consent to the persons employed in or engaged by the business so acting; and
(c)was given a disclosure notice.
(3)However, even if subrule (2) has been complied with, a licensee who carries on a business as a settlement agent must ensure that a person employed in or engaged by the business, does not continue to act for the party if there is a real possibility that the person would be required, in order to comply with the Act, the regulations and these rules, to act contrary to the interests of the party.
(1)A licensee must not act, or continue to act, as a settlement agent for a client if the licensee has an interest in the client’s transaction, including if the licensee is a party to the transaction or may benefit, directly or indirectly, from the transaction, unless —
(a)the licensee fully informs the client, in a disclosure notice, of the interest; and
(b)the client agrees in writing to the licensee acting, or continuing to act, as a settlement agent for the client.
(2)Subrule (1) does not apply in relation to an interest that the licensee has because the licensee is acting as a settlement agent in the client’s transaction.
In this Division —
beneficiary, in relation to a trust, means an individual who is a beneficiary under the trust (whether the beneficiary has a vested share or is contingently entitled or is a potential beneficiary under a discretionary trust);
developer has the meaning given in the Real Estate and Business Agents Act 1978 section 4(1);
listed has the meaning given in the Corporations Act 2001 (Commonwealth) section 9;
prescribed financial market has the meaning given in the Corporations Act 2001 (Commonwealth) section 9;
principal, of a licensee, means —
(a)if the licensee is a firm, a person who is a partner in the firm;
(b)if the licensee is a body corporate, a security holder or director of the body corporate;
(c)if a business is conducted by the licensee as trustee for a trust, any unit holder or beneficiary of that trust;
real estate or business agent means an agent as defined in the Real Estate and Business Agents Act 1978 section 4(1);
real estate or business sales representative means a sales representative as defined in the Real Estate and Business Agents Act 1978 section 4(1);
security holder, of a body corporate, does not include a security holder of a body corporate that is —
(a)listed on a prescribed financial market; or
(b)a bank authorised under any law of the Commonwealth or the State to carry on banking business; or
(c)a building society authorised to act under any law of the State; or
(d)authorised by the law of another State, of a Territory or of the Commonwealth to apply for and obtain, in its own name, a grant of probate or of letters of administration of the estate of a deceased person;
substantial holder, in relation to a financial institution that is a body corporate or listed registered managed investment scheme, means a person who has a substantial holding, as defined in Corporations Act 2001 (Commonwealth) section 9, in the body corporate or listed registered managed investment scheme, as if the percentage in paragraph (a) of that definition were 20% rather than 5%.
22.Disclosure notice to be given
(1)A licensee must not act, or continue to act, as a settlement agent for a client in a related transaction, unless —
(a)the licensee fully informs the client, in a disclosure notice, of the nature of the related transaction; and
(b)the client agrees in writing to the licensee acting, or continuing to act, as a settlement agent for the client.
(2)In subrule (1), a related transaction is a transaction in which a licensee is acting as a settlement agent and that —
(a)has been negotiated by a real estate or business agent or developer in which the licensee or a principal of the licensee has a financial interest; or
(b)has been negotiated by any of the following who have a financial interest in the licensee —
(i)a real estate or business agent;
(ii)a developer;
(iii)a real estate or business sales representative;
or
(c)has been negotiated by a real estate or business sales representative employed in or engaged by any of the following who have a financial interest in the licensee —
(i)a real estate or business agent;
(ii)a developer;
or
(d)in relation to which finance has been provided or is proposed to be provided by any of the following financial institutions —
(i)a financial institution that is the same legal entity as the licensee;
(ii)a financial institution in which the licensee is a partner, director or substantial holder or has an interest as a beneficiary or unit holder of a trust;
(iii)a financial institution that is a partner, director or substantial holder of the licensee or has an interest in the licensee as a beneficiary or unit holder of a trust.
Part 5 — Appointment of licensee and payment of fees
(1)Before being appointed to act as a settlement agent in relation to a transaction by a client as required under section 43 of the Act, a licensee must give a costs disclosure in writing to the client.
(2)The costs disclosure must disclose the amount (service amount) that the client will be charged by the licensee to provide the services that the licensee has agreed to provide to the client in relation to the transaction.
(3)Without limiting subrule (2), the service amount must include all amounts —
(a)that are listed, or that reflect amounts that are listed, in subrule (4); and
(b)that the client will be charged by the licensee.
(4)The amounts are as follows —
(a)professional fees;
(b)commissions;
(c)general office disbursements;
(d)search or enquiry fees or charges;
(e)electronic conveyancing service fees or charges;
(f)any other types of fees or charges;
(g)taxes, duties or levies.
(5)However, the service amount must not include any amount that is, or reflects, an amount that is imposed on the client (as opposed to the licensee) under a written law or otherwise by a third party, for example —
(a)duty imposed on the client under the Duties Act 2008;
(b)commissions imposed on the client by —
(i)an agent as defined in the Real Estate and Business Agents Act 1978 section 4(1); or
(ii)a developer as defined in the Real Estate and Business Agents Act 1978 section 4(1); or
(iii)any other third party.
(6)An amount that is imposed on the client as referred to in subrule (5) may be set out, or estimated, in the costs disclosure separately from the service amount.
[Rule 23 amended: SL 2020/221 r. 4.]
24.Payment not to exceed service amount unless exception applies
(1)A licensee is not entitled to receive payment for services that exceeds the service amount for those services disclosed in the costs disclosure given under rule 23(1) unless subrule (2) or (3) applies.
(2)The licensee may receive payment of an amount (the additional amount) in addition to the service amount if —
(a)an amount of work (the additional work), in addition to the work that was provided for in the calculation of the service amount, is required to provide the services; and
(b)the licensee could not reasonably have foreseen the requirement for the additional work when the costs disclosure was given; and
(c)the licensee informs the client in writing of the additional work; and
(d)the client agrees to the licensee continuing to provide the services; and
(e)the additional amount is reasonable having regard to the type and scope of the additional work.
(3)The licensee may receive payment of an amount (the additional amount) in addition to the service amount if —
(a)the service amount includes an amount that reflects a tax, duty, fee, levy or charge imposed on the licensee under a written law in relation to the services; and
(b)after the costs disclosure is given —
(i)a written law comes into operation or a power under a written law is exercised; and
(ii)as a result, there is an increase in the amount of the tax, duty, fee, levy or charge that is imposed on the licensee as referred to in paragraph (a);
and
(c)the increase, or a part of the increase, was not provided for in the calculation of the service amount; and
(d)as soon as practicable, the licensee informs the client in writing of the amount of the increase that was not provided for in the calculation of the service amount; and
(e)the additional amount is reasonable having regard to the amount of the increase that was not provided for in the calculation of the service amount.
[Rule 24 inserted: SL 2020/221 r. 5.]
If a licensee reasonably believes that the licensee or a person nominated by the licensee will receive a fee or any other benefit as a result of the licensee referring a client to a person who provides another service, then the licensee must disclose in writing to the client the fee or benefit to be received at the time the referral is made.
(1)An appointment to act (whether contained in a separate appointment document, an offer to purchase or a contract for sale) is to be in Form 1, or contain the information in Form 1.
(2)A licensee who is unable to accept an appointment to act must notify the person who sought to make the appointment as soon as practicable.
(3)Any change made to the appointment to act must be in writing and may be made by way of amendment to the original document that appointed the settlement agent.
27.Consumer may request an itemised bill
A licensee must comply with the Australian Consumer Law (WA) section 101.
27A.Transitional provision for the Settlement Agents Code of Conduct Amendment Rules 2020
(1)In this rule —
commencement day means the day on which the Settlement Agents Code of Conduct Amendment Rules 2020 rule 3 comes into operation.
(2)Rules 23 and 24 of these rules as in force immediately before commencement day continue to apply to cases in which a costs disclosure is given to a client before commencement day.
[Rule 27A inserted: SL 2020/221 r. 6.]
Part 6 — Specific duties of licensee
28.Retaining copies of documents
A licensee who has acted as a settlement agent for a client must take all reasonable steps to ensure that a copy of each disclosure notice and Form 1 given to the client is retained by the licensee or on behalf of the licensee for a period of 6 years beginning on the day the document is given to the client.
29.Licensees duties in arranging a settlement
(1)A licensee must, when acting for a client in arranging a settlement, as soon as practicable after receiving instructions to act for the client, ensure that —
(a)all necessary searches and inquiries are made at the relevant offices and authorities; and
(b)a settlement statement is forwarded to the client to arrange the settlement.
(2)The licensee must also ensure that amended settlement statements are forwarded to the client as may be necessary.
(3)Without limiting subrule (1), a licensee must, as soon as practicable after receiving instructions to act in arranging a settlement and before the settlement takes place, take all reasonable steps to ensure that the following are verified —
(a)the identity of each person who claims to be, or to act for, a person disposing of real estate in the real estate transaction being completed at the settlement;
(b)each person’s authority to dispose of the real estate, or to act for the person disposing of it.
(1)When acting as a settlement agent for a client a licensee must, if it is necessary or prudent, recommend to the client that the client seek the advice of a lawyer in respect of a transaction or part of a transaction.
(2)When acting as a settlement agent for a client a licensee must not, directly or indirectly, discourage, attempt to discourage or impede the client from seeking legal advice or representation.
31.Change of settlement agents
(1)A client is entitled to change the client’s settlement agent or instruct a lawyer to act for the client at any time without giving a licensee a reason.
(2)When acting as a settlement agent for a client a licensee must facilitate the client’s change of settlement agent or instruction of a lawyer in a professional and helpful manner.
(1)When acting as a settlement agent for a client a licensee must take all reasonable steps to ensure that proper accounts are kept evidencing the licensee’s dealings with the client’s money.
(2)When acting as a settlement agent for a client a licensee must make the accounts available for inspection —
(a)by the client, at the reasonable request of the client; and
(b)as required in accordance with the Act.
33.Money and documents held on client’s behalf
(1)When acting as a settlement agent for a client a licensee must ensure that the client is promptly notified if the licensee receives money, documents of title or securities on behalf of the client.
(2)When acting as a settlement agent for a client a licensee must ensure that the following directions, if given by the client or another settlement agent or a lawyer instructed by the client, are complied with promptly —
(a)a direction to provide for the payment of money held by the licensee on the client’s behalf;
(b)a direction to deliver documents of title, securities or other documents held by the licensee on the client’s behalf.
Part 8 — Repeal and transitional
34.Settlement Agents’ Code of Conduct 1982 repealed
The Settlement Agents’ Code of Conduct 1982 is repealed.
(1)In this rule —
transitional period means the period of 2 months beginning on the day on which the Settlement Agents Code of Conduct 2016 (other than rules 1 and 2) comes into operation.
(2)For the purposes of sections 34(1) and 84(2)(c)(iii) of the Act, a licensee to whom this rule applies is taken not to have acted in breach of this code.
(3)This rule applies to a licensee who during the transitional period —
(a)fails to comply with a provision of this code; but
(b)complies with the provisions of the Settlement Agents’ Code of Conduct 1982.
