Extending Sales Agency Agreements in Tasmania

Tasmanian legislation does not provide a way to extend a sales agency agreement beyond 120 days. Section 44(10) of the Property Agents and Land Transactions Act 2016 provides:

Sometimes complications arise between appointing an agent and getting the property on the market. Other times the market is just slow and agents need more than 120 days to market, contract a buyer and complete the sale. This can be especially true of rural and remote properties.

So what can you do if the property is still on the market after 120 days?

• If you have already entered into an agency agreement without any renewal mechanism then you will have to execute a new agency agreement.
• If you have not yet entered into an agency agreement, you can include a clause with an option to renew the agency agreement in the event that the 120 days runs out. It is important that this clause is expressed in terms of creating a new agreement as opposed to extending the current agreement which will become invalid irrespective of any purported extension of its term by the parties.

The option to renew clause might read something like this:

The parties acknowledge that the effect of legislation is that this agreement will become invalid 120 days after signing and agree that upon the expiration of the aforementioned 120 days, unless this agreement has otherwise ended, the Principal may at the Principal’s option re-appoint the Agent on the same terms as this agreement (‘New Agreement’) , except that the New Agreement will commence on the day after this agreement expires, and the Principal will have been deemed to have exercised the option without the requirement for any notice to the Agent unless the Principal notifies the Agent in writing that it will not exercise the option.