What a settlement agent does

Two ways to hold the role

The WA Government’s licensing page describes two routes. One is a licence from Consumer Protection, held with a current triennial certificate. The other is to be a “certified legal practitioner” under the Legal Profession Uniform Law Application Act 2022. Consumer Protection’s own page calls the second group conveyancers. The Settlement Agents Act 1981 also allows a narrow exception: a real estate or business agent who is licensed and carrying on business as one, and who holds a current exemption from the Commissioner, may arrange or carry out a settlement, but only of a transaction they acted in as that agent, only if they take no reward for it, and only after first giving each person the settlement is for a notice in the prescribed form warning that the Act will then give them no protection.

The licence applies to businesses as well as to people. A settlement business run as a company or a partnership also needs a body corporate or partnership licence, and at least one person in it has to hold an individual licence.

Consumer Protection sits within the Department of Local Government, Industry Regulation and Safety (LGIRS). The department’s own page says it was previously known as the Department of Energy, Mines, Industry Regulation and Safety, so older documents may carry that name.

What the licence asks of the person

To apply for an individual licence, a person must be at least 18, have a good character and reputation, hold suitable qualifications, have enough assets and financial resources to draw on, and fully understand their duties and obligations under the Settlement Agents Act 1981. To keep a licence, an agent completes continuing professional development each year, and the compulsory topics change from year to year.

The title itself is protected. Under section 26 of the Settlement Agents Act 1981, a person or company must not carry on business as a settlement agent, or hold itself out as one by any means, unless it is licensed and holds a current triennial certificate. The maximum fine is $100,000. For a company the maximum is five times that, $500,000, because section 40(5) of the Sentencing Act 1995 sets that multiple where an offence names no separate fine for a body corporate.

Fees, and what sits outside them

A settlement agent must disclose the service fee in writing before any agreement. The agent cannot charge more than the disclosed amount unless the scope of the work changes significantly, the client is told in writing and agrees to continue, and the extra charge is reasonable.

The disclosed fee does not include statutory and other costs: transfer duty, other taxes and charges such as Landgate title search fees, fees from banks or other lenders, and commissions from real estate agents, developers or other third parties. Consumer Protection describes giving clients the details of these costs as good business practice, though they are not part of the maximum amount.

One side of the line

A settlement agent may act for both buyer and seller only if both agree to it on the appointment form. If a conflict of interest arises that places one party’s interests above the other’s, the agent must withdraw from acting for all parties.

You can pick, or swap, the person handling your settlement whenever you like, though you may have to pay for work already done on your behalf.

The safeguards behind the licence

Settlement agents’ trust accounts must be audited by an approved auditor, with the audit report lodged with Consumer Protection. Consumer Protection also runs a proactive compliance program, set up in 1999 to help agents comply with the law.

Where trust money or trust property is lost through the criminal or fraudulent actions of a licensed settlement agent or their employees in a settlement, the Fidelity Guarantee Account can help reimburse people who meet its criteria. Written notice of a claim has to reach Consumer Protection within three years of the person becoming aware of the loss, which Consumer Protection may extend to six years where it considers that just and reasonable.

Is one required?

Landgate’s answer to “Do I need a settlement agent?” is no, though it strongly recommends one. A buyer or seller can instead lodge the Transfer of Land form with Landgate as a self-represented party. Consumer Protection’s settlement page puts it this way: anyone who is not a suitably qualified lawyer should have a licensed settlement agent or a lawyer act for them.

A self-represented party still has their identity verified. The Registrar of Titles has authorised Australia Post to do this at participating outlets. How to look up a licence is in Checking a settlement agent’s licence; the order of events is in From offer to keys.