By John Punch
Chameleons are very unusual creatures. I was recently watching a David Attenborough show on television where he produced this lizard like animal which changed its colour and form before your very eyes, to suit its surroundings. This reminded me very much of how the Property Occupations Act 2014 treats a Form 20a Letting Agent Appointment.
Whilst the Property Agents and Motor Dealers Act has been completely replaced by the Property Occupations Act with completely new Forms, under the POA the new form of appointment for any agent for any activity is covered as a Form 6. Therefore, a Form 6 now must be utilised for new letting appointments.
However, section 249 of the POA gives a Form 20a under the PAMD the characteristics of a chameleon! It does this by stating that an appointment to act as a resident letting agent under PAMDA (a Form 20a) continues in force after the commencement of the POA as an appointment under the POA (a Form 6).
In other words a Form 20a changes in nature to be a Form 6 as for the purposes of the POA. Section 249 of the POA goes on to state that the existing appointment, continued in force under the section, ends on the day it ends according to “its terms”. It also says that an appointment, continued in force under the section, shall continue, subject to the section, according to its terms, with necessary changes.
Effectively, the section makes a Form 20a into a Form 6, continuing in force until it comes to an end according to its terms!
This change in nature of a Form 20a to be a Form 6 then becomes interesting when its terms conflict with other provisions of the POA.
Section 114 of the POA states that an appointment of a resident letting agent may be revoked by either party giving the other party at least 30 days written notice of revocation.
When the terms of the Form 20a state that it is capable of being terminated by either party on 90 days’ notice, and the POA section 249 says that, as a Form 6, it continues until the date ends according to its terms, how is this taken when section 114 of the POA is read? Does an appointment in a Form 20a only end according to its terms (normally on 90 days’ notice) or does it end as a Form 6 by revocation on 30 days’ notice?
This question is not answered by the POA. However, taking the conservative approach is best. That is, expect that a revocation given on 30 days’ notice is likely to be effective.
Considering that the net difference between 30 and 90 days’ notice is only a loss of commission for 60 days, not a great deal financially rides on it for the letting agent.
Of course, even if there is a cancellation of a Form 20a or a Form 6 by an owner, whatever tenancy an agent has arranged must be honoured by the lot owner as ongoing and binding on the owner. It is only the letting agent that terminates.
The other question for the chameleon Form 20a converting to a Form 6 is – what happens if the Form does not have the assignment section ticked? As a Form 20a it is not automatically assigned but as a Form 6, under the POA it is automatically assignable by the agent.
Section 113 of the POA allows assignments of the appointments made under section 102, (which states compliance requirements for appointment as applying to appointments made directly to the agent or assigned to the agent). The section states that assignments may occur either according to the terms of the appointment or under section 113.
The confusion between applying these two sections could mean that a Form 20a, in becoming a Form 6, is automatically assignable if its terms on assignment are not otherwise expressed i.e. if the assignment provision in a Form 20a is not ticked.
We are unlikely to see litigation or the point with a Court interpretation and therefore, without some clarifying change to the POA, there is uncertainty in applying the automatic assignment provision of the POA Form 6 to the old PAMDA Form 20a.
I guess, we can only go so far in applying the wording of the Law when it comes to chameleon like Forms! The safest path is to plan to replace all Forms 20a with the new Form 6, signed by the Lot owner, based on the above, it can be seen that there is a safety net in place in the meantime.