Conveyancers petition to get real estate agent kickbacks outlawed 

CONVEYANCERS have launched a petition calling on real estate agent kickbacks to be outlawed. 

More than 400 practitioners – and members of the public – have so far backed the appeal by the Victorian division of the Australian Institute of Conveyancers. 

Lawmakers are being asked to ban the practice as part of an overhaul of the 2006 Conveyancing Act as part of the Change.org petition. 

“We call on the Victorian government to urgently address the growing issue of kickbacks, referral fees, and incentives in the conveyancing industry,” the petition says.  

“These practices not only undermine consumer rights but also contribute to significant conflicts of interest, leading to potential financial harm and reduced quality of service for clients. 

“Many conveyancers are under considerable pressure to pay significant “referral fees” or “kickbacks” to real estate agents, finance brokers and other service providers in exchange for client referrals.  

“These fees, often reaching up to $500 per file, have become an undeclared source of income for the recipients, fuelling an unethical and most often undisclosed financial relationship between parties.  

“In some cases, these payments are made in cash ‘under-the-counter’ with no questions asked, creating a culture of secrecy and bypassing legal, financial and ethical obligations. 

“The impact on consumers is severe.  

“Clients are frequently coerced into using “preferred” conveyancers without full disclosure of the financial arrangements, and in many cases, the fees are not disclosed to the clients at all, turning these payments into “secret commissions.”  

“The secrecy surrounding these transactions not only violates laws but also compromises the independence and quality of legal and financial advice provided to consumers. 

“Additionally, this practice harms fair trade in the industry, with clients being directed away from firms that do not pay for referrals, leaving them unable to compete with businesses that do pay.” 

AIC VIC President Shakila Maclean said that the Committee of Management first brought concerns about kickbacks and race-to-the-bottom fees to the attention of relevant regulators in 2023 and has consistently advocated for a ban on “unethical” backhanders. 

The proposal of a petition was presented to the Committee of Management by a committee member in 2024, highlighting the need for action on a critical issue. After a thorough discussion and following a vote by the Committee of Management, the petition was approved to move forward as a formal step towards addressing the concern, according to Shakila. 

Several surveys of Victoria conveyancers have also been carried out over the past months to find out which practitioners are involved, the President of AIC VIC and owner operator of All Hours Conveyancing added. 

“We’ve had 100s of responses, sharing information about who is involved,” she said. 

“It’s important so we can share data and statistics with the relevant people and key stakeholders. 

“We want to be able to show that this unethical practice is going on and is crippling the industry.” 

While Shakila says she there is a long way to go with the petition, she is happy that members of the public have been backing the appeal as “ultimately, it’s the consumer who is losing out.”  

Shakila – named one of Australian Conveyancer’s Women of Influence in our new special report – added that the AIC had suggested to the Victoria government that they adopt the “great model that South Australia has which has a mandatory clause banning kickbacks.” 

Full details of the Change.org petition can be found here.