How Commission Is Deducted at Settlement in Queensland: The Solicitor’s Role Explained

You’ve signed the contract, the deal has gone unconditional, and settlement day is approaching. The commission is agreed, it’s documented in your Form 6, and the seller knows it’s coming. So why do agents sometimes arrive at settlement only to find a dispute, a delay, or — worst case — a cheque that was never prepared? The answer almost always traces back to one thing: the agent’s relationship with the seller’s solicitor was either not established early enough, or the commission authority wasn’t documented in a way that gave the solicitor clear instruction to act.

Understanding exactly how commission is deducted at settlement in Queensland — and what the solicitor’s role is in that process — is one of the most practically important things a working agent needs to get right. Real estate commission disputes are not uncommon in Queensland, particularly when multiple agents are involved in a sale or when sellers challenge the validity of commission claims. Many of those disputes could be avoided with a clearer grasp of the mechanics.

The Legal Foundation: Your Entitlement Begins with the Form 6

Before anything can happen at settlement, the agent’s right to receive commission must be grounded in a valid appointment. If an agent has been validly appointed to sell a property in accordance with a Property Occupations Form 6 Appointment, the agent is ordinarily entitled to receive commission from their seller client upon completion of the contract of sale pursuant to the terms of the appointment.

That word “ordinarily” carries real weight. The entitlement exists — but it is conditional on the Form 6 being properly executed. Section 104 of the Property Occupations Act 2014 (Qld) sets out the requirements which must be satisfied for an appointment to be valid and enforceable. In terms of commission payable, this section provides that the appointment must include a statement about the fees, charges and any commission payable for the service, and when the fees, charges and any commission for the service become payable.

The appointment is ineffective from the time it is made if the appointment does not comply with section 104 of the Act. This is not a technicality that lawyers can sometimes argue around — it is a hard rule. An appointment that fails to specify when commission is payable gives the solicitor no clear authority to deduct at settlement, and may give a determined seller grounds to refuse payment altogether. The Form 6 is not administrative paperwork; it is the legal instrument that makes commission recoverable.

There is a further statutory constraint worth knowing. Under section 88 of the Property Occupations Act 2014, a property agent who performs a service of selling property must not claim commission worked out on an amount more than the actual sale price of the property. This prevents agents from calculating commission on list price, an inflated figure, or anything other than the actual contracted sale amount. Legislation imposes certain conditions on the recovery of commission or expense by an agent or auctioneer, including that the person is not entitled to sue for, recover or retain a reward or expenses that are more than the reward or expenses stated in the appointment form. The solicitor handling the settlement is the person responsible for ensuring those figures align.

What Actually Happens at Settlement: The Solicitor’s Mechanics

Settlement in Queensland is the point at which ownership transfers, funds change hands, and the net sale proceeds are distributed. Funds are electronically transferred from the buyer’s bank to the seller’s bank (to pay out any existing mortgage) and then the remaining balance to the seller’s nominated account. Agent commission is one of the line items that comes out of those proceeds before the seller sees a net figure.

Common deductions processed at settlement include the real estate agent’s agreed commission fee, which is deducted from the sale proceeds at settlement, along with the seller’s conveyancing fees. In the PEXA electronic conveyancing environment that now governs the majority of Queensland residential settlements, these disbursements are arranged in a settlement schedule prepared by the seller’s solicitor. The seller’s solicitor inputs the payee details — including the agency’s BSB and account number — and the system distributes the funds simultaneously at the point of settlement confirmation.

The critical implication for agents is this: the solicitor does not search out the commission figure independently. It is important that agents send an invoice for their commission to both parties’ conveyancing solicitors well in advance of the settlement date for the contract of sale so that a cheque can be drawn at settlement for the agent’s commission. In a PEXA settlement that instruction is effectively replaced by the solicitor adding the agency as a payee in the workspace — but the underlying principle is identical. If the solicitor has not received the invoice and bank details before the settlement schedule is locked, the commission will not be disbursed on settlement day. The seller receives the gross proceeds, and the agent is left chasing a debt.

With the advent of electronic conveyancing through platforms like PEXA, the transfer of funds is much faster than in the old manual system involving physical cheques. Generally, as a seller, you can expect to receive the net proceeds of the sale — after your mortgage is paid out and adjustments and agent’s commission are accounted for — typically on the same day as settlement. Speed is the advantage of PEXA; the trade-off is that there is no room for last-minute additions or corrections once the workspace is finalised and settlement commences.

The Invoice: What It Must Contain and When to Send It

There is no prescribed statutory form for a commission invoice in Queensland, but the content needs to be sufficient for the solicitor to verify it against the Form 6 and include it in the settlement distribution without ambiguity. A well-prepared commission invoice should include:

• The full legal name and ABN of the agency
• The property address and contract date
• The sale price on which commission is calculated
• The commission rate or fixed amount as stated in the Form 6 (including GST)
• The BSB and account number for payment
• The amount held in the agent’s trust account as deposit (to be reconciled at settlement)

The deposit held in trust matters because the net commission amount payable at settlement is usually the agreed commission less whatever deposit amount is already sitting in the agency trust account. A common arrangement is for the seller to instruct their solicitors to deduct the commission from the settlement money and pay it to the agent less the amount already held in the agent’s trust account. Getting this reconciliation correct in the invoice prevents the solicitor from inadvertently paying out the full commission while the agent is also holding deposit funds — and prevents the agent from being accused of double-dipping.

Timing matters as much as content. Industry practice strongly suggests sending the invoice at least five to seven business days before the scheduled settlement date. In practice, sending it the day after the contract goes unconditional is even better. The solicitor needs time to obtain the seller’s authority, prepare the settlement statement, and input the payee details into PEXA. Agents who wait until a week out from settlement on a 30-day contract often create problems they did not need to create.

The Seller’s Solicitor as Gatekeeper

It is important to understand the position the seller’s solicitor is actually in. They are acting for the seller, not for the agent. Their job is to distribute the settlement proceeds according to their client’s lawful instructions. When they deduct and pay the agent’s commission at settlement, they are acting on the authority contained in the contract of sale (if a commission direction clause is included) or on a written direction from the seller. Without one of those two things, the solicitor is not in a position to simply pay the commission because the agent has invoiced them.

This is where the “commission direction” clause in the standard REIQ/QLS contract of sale becomes important. The standard contract used in Queensland contains a provision allowing the seller to authorise the deposit holder to apply the deposit towards commission. Some agents and their sellers also include additional special conditions that give the seller’s solicitor explicit authority to deduct the agreed commission from settlement proceeds and pay it directly to the agent. Without some form of written authority, the solicitor may require specific written instructions from the seller immediately before settlement — and a seller who has had second thoughts about the commission may use that moment to raise a dispute.

In most transactions, the commission rate is specified in the Form 6 appointment signed by the seller. That signed appointment, combined with the commission clause in the contract, typically constitutes sufficient authority for the solicitor to act. But if the Form 6 is defective, if the commission amount on the invoice does not match what was agreed, or if the seller has directed the solicitor to withhold payment pending some dispute, the solicitor will generally not release the funds until the matter is resolved. The agent then has no choice but to pursue the debt outside the settlement process.

When Commission Is Not Paid at Settlement: The Recovery Options

Despite best practice on the agent’s side, commission disputes do occur. Real estate commission disputes in Queensland can arise from a variety of situations, including competing claims by multiple agents, termination of contracts, and issues with the validity of Form 6. When settlement has occurred but commission has not been paid — whether because the solicitor was not instructed, the seller withheld authority, or a genuine dispute has arisen — the agent’s options follow a predictable escalation path.

If a seller client refuses to pay commission owing, agents should first explore conflict resolution through negotiation and discussion with their client at an early stage, in order to avoid litigation and potentially incurring significant legal costs. However, if the matter cannot be resolved at an early stage, agents may commence a minor debt claim to recover commission through the Queensland Civil and Administrative Tribunal (QCAT), depending on the value of the commission sought.

QCAT can hear minor debt claims up to $25,000. The matter will likely progress to a mediation before being listed for a hearing, if the matter is unable to be resolved. Commission on a mid-range Queensland residential sale will often exceed that threshold, which means the claim moves to the Magistrates Court or District Court depending on value. These are formal proceedings that carry both cost and delay — reinforcing why getting the invoice right and early is the far better approach.

An agent may be prevented from recovering commission if there is an invalidity in the Form 6 appointment. This can happen if the form was improperly completed or if the agent was not appropriately appointed, leading to disputes over the legitimacy of the agent’s commission claim. A QCAT or court proceeding cannot fix a defective Form 6. If the appointment fails the requirements of section 104 of the Property Occupations Act 2014, the commission may simply be unrecoverable — regardless of the work done or the result achieved.

The PEXA Workspace and What Agents Need to Know

Most Queensland residential settlements now occur through PEXA, the national electronic lodgement and settlement platform. With the advent of electronic conveyancing through platforms like PEXA, the transfer of funds is much faster than in the old manual system. For agents, the practical shift from paper to electronic conveyancing has changed the way commission flows through settlement without changing the underlying legal requirements.

In a PEXA workspace, the seller’s solicitor creates a settlement schedule that lists every payment to be made from the proceeds. The seller’s incoming funds (from the buyer’s financial institution) are allocated across the schedule: mortgage discharge first, then the solicitor’s own fees, then any other contracted disbursements including the agent’s commission. Each payee requires a verified BSB and account number. The workspace is reviewed and digitally signed by each participant, and settlement is confirmed once all parties have signed and the financial institution confirms funds.

The practical implication is that the agent’s commission is only as secure as the communication between the agent and the seller’s solicitor. If the solicitor does not have the invoice, the correct bank details, and the seller’s authority when the workspace is being built, the agent’s payment will not be in the schedule. And unlike a cheque that can be issued after the fact, a PEXA workspace cannot be retroactively altered post-settlement. The agent is left as an unsecured creditor of the seller.

Agents should also be aware that in transactions where the buyer’s solicitor has custody of the deposit — which is common in Queensland when the deposit is held in the buyer’s solicitor’s trust account rather than the agent’s trust account — the release of those deposit funds at settlement goes to the seller’s side. The commission is then paid from the combined proceeds. The agent needs to confirm with the seller’s solicitor which deposit arrangements apply so the commission invoice reconciliation is accurate.

Deposit Trust Accounts and the Commission Reconciliation

The requirements for deposits and other part payments to be held in a trust account by a real estate agent, law firm, or the Public Trustee are established under the Property Occupations Act 2014. When the agent holds the deposit in trust, that amount will be applied towards the commission at settlement and the balance paid from the proceeds. This is the most straightforward scenario. The agent transfers the deposit from trust to their general account once the settlement funds clear and the solicitor has confirmed the settlement schedule is complete.

Where the deposit is held by the seller’s solicitor’s trust account or the Public Trustee, the agent does not hold any funds and the full commission must be disbursed from settlement proceeds. The invoice needs to clearly reflect this so the solicitor schedules the full commission amount — not a net-of-deposit figure.

A further complication arises in transactions with a small deposit or no deposit at all. In a low-deposit or minimal-deposit contract (sometimes called a “minimum deposit clause” arrangement), the agent’s invoice must reflect the full commission owing with none of it already held in trust. In such an arrangement, the seller instructs their solicitors to deduct the commission from the settlement money and pay this to the agent less only the amount held in the agent’s trust account — which in a minimal-deposit situation may be a negligible sum. The solicitor still needs the invoice to act on this authority.

Principals should also be aware of section 91 of the Property Occupations Act 2014, which requires excess commission to be repaid. If for any reason the settlement proceeds disbursed to the agent exceed the amount authorised in the Form 6 — whether through a calculation error or a late price adjustment — the agent is obliged to return the excess. Having the invoice clearly tied to the Form 6 commission terms prevents this scenario from arising.

What This Means for Queensland Agents

Commission deducted at settlement is not automatic. It requires deliberate action from the agent — and that action must happen early, accurately, and with the seller’s solicitor as the key relationship.

Send the commission invoice to both the seller’s and buyer’s solicitors as soon as the contract goes unconditional. Do not wait for the other side to ask for it. Include your agency’s ABN, the exact commission figure (inclusive of GST) as specified in the Form 6, your trust account reference for the deposit held, and your agency bank details. Confirm receipt.

If your Form 6 does not clearly state when commission becomes payable — typically “on completion of the contract of sale” — that omission creates a vulnerability. The Form 6 must comply with section 104 of the Property Occupations Act 2014 to be enforceable. Check this before the contract is signed, not after it is executed.

Understand that commission is typically paid on settlement day from the sale proceeds, with the funds usually deducted by the conveyancer or solicitor. But this only happens because the solicitor has been properly instructed. “Typically” is not “automatically.” Your invoice, delivered early to the right people, is what converts your entitlement into actual payment.

In the event commission is not paid at settlement, act quickly. If a seller client refuses to pay commission owing, agents should first explore conflict resolution through negotiation and discussion with their client at an early stage, in order to avoid litigation and potentially incurring significant legal costs. Documentation — the Form 6, the invoice, any email trail confirming receipt — is what makes that negotiation, or any subsequent QCAT or court claim, winnable.

The solicitor is not your adversary in this process. Approached professionally and early, they are simply the mechanism through which your lawfully earned commission reaches your account. The agents who understand this — and who manage the settlement communication proactively — are the ones who never have to chase a payment after the keys have been handed over.