The stoush began when an agent from Ray White St Albans who had not been paid $385,000 commission on the $8.8 million sale of a Keysborough industrial site attempted to sue the owners. In August 2017 the agent failed when the County Court ruled that a shorter version of the sale contract included an amended statement on commissions and rebates that did not comply with the Estate Agents Act. The disgruntled agent challenged the decision in the Court of Appeal, but was again unsuccessful, which provided a legal basis for property sellers to claw back commissions, even when agents acted in good faith and sold properties above their reserve price. The ruling has sent tremors throughout Victoria's property industry, with agents seeking legal advice to safeguard their commissions. Many are blaming CAV and the REIV, amid calls for the Andrews government to introduce retrospective legislation. Industry sources told The Age that since the court decision only a small number of vendors have come forward to challenge the fees they were charged.

But property law expert Robert Hay, QC, warned there is no legal defence for those agents who are challenged over commissions. "As it stands, there's not much they can do. There could be lots of innocent agents, who could be dis-gorged of their commissions,'' he said. Loading Barry Plant, founder and director of Barry Plant Real Estate, said the issue was clearly a mistake that could easily be fixed by the state government. "It could become a big deal only if it is allowed to become a big deal. One would hope common sense will prevail and the state government will step in."

Mr Plant said that in the event of any lawsuits, his agency would look at suing the REIV, which had distributed the "authorised" forms to the industry. Melbourne firm SLF Lawyers, which has issued writs to CAV and the REIV, received a memorandum of advice that claimed both parties had breached their legal obligations to agents and vendors. "The duty was breached, because the statement was clearly wrong, and found to be so by a County Court judge, and again on appeal. "To put the allegation at its simplest, whomever approved the form on behalf of the director (CAV) did not properly read the Estate Agent Act. Further, whomever at the REIV had responsibility for preparing the pro forma, did not properly read the Estate Agent Act either," the memorandum of advice stated. SLF Lawyers partner John Gdanski said he expected "opportunistic vendors" to exploit the recent court decision.

"We've had a number of queries from concerned agents and franchisees over the past week or so. Without urgent legislative change there's going to be a flood of legal action," Mr Gdanski said. An REIV spokesman said he was unable to comment "as legal proceedings are now in train." A Consumer Affairs Victoria spokesman said he was unaware of any court action taken by SLF Lawyers. The CAV spokesman declined to answer questions from The Age, but said the County Court decision last year had "affirmed the responsibilities of agents to comply with all requirements of section 49A of the Estate Agents Act 1980 (the Act) in order to claim commission in respect of a property sale". "Consumer Affairs Victoria proactively highlighted the outcome of this case to real estate agents in Victoria, and reminded them to include all the requirements of section 49A of the Act," the CAV spokesman said.