What Happens to Commission If a Queensland Property Deal Falls Through?

The buyer has pulled out under the finance condition. The deposit is being refunded. The seller is furious, the property is back on the market — and you’re wondering whether the weeks of work you just put in entitle you to anything at all. It’s one of the most practically urgent questions in Queensland real estate, and the answer is rarely as simple as “no contract, no commission.”

Whether you stand to receive commission when a Queensland property deal falls through depends on three things working together: the terms of your Form 6 appointment, the stage at which the contract collapsed, and the reason for the collapse. Get any one of those wrong — or fail to understand how they interact — and a legitimate claim can disappear.

The Foundation: What Your Form 6 Actually Says

Queensland agents must be formally appointed in writing before they are entitled to sell a property or charge commission. This is done using the prescribed Appointment of Property Agent (Form 6) under the Property Occupations Act 2014 (Qld). That much most agents know. What fewer agents scrutinise carefully enough is the commission trigger clause — the specific language that defines when the entitlement to commission actually arises.

Your Form 6 should set out the exact event that “earns” the commission. This could be on formation of an unconditional contract, on settlement, or another clear milestone. The timing matters a great deal if a contract collapses before settlement.

This is the crux of everything that follows. The REIQ Appointment of Real Estate Agent form expressly states in standard condition 5 when commission is payable to the agent by the seller. If there is no REIQ Appointment of Real Estate Agent form supplied with the Form 6, then the general stance is that once the contract becomes unconditional the agent is entitled to claim commission, regardless of whether that contract settles or is terminated.

The practical implication is significant: if your appointment uses the standard REIQ conditions and the commission trigger is the formation of an unconditional contract, your entitlement crystallises at that moment — not at settlement. A subsequent collapse of the transaction does not extinguish a commission that has already been earned. If, on the other hand, your Form 6 specifies settlement as the trigger, the analysis is entirely different.

The Importance of Valid Appointment

None of this matters unless the appointment itself is valid. In Queensland, a valid appointment (Form 6) is essential for commission to be payable. The form must clearly set out the commission amount and when it’s payable, and if percentage-based, that it is calculated on the actual sale price, not an estimate. Even minor omissions can invalidate the appointment.

In Yong Internationals Pty Ltd v Gibbs (2011), the agent lost entitlement to commission because the form was incomplete under the “Performance of service” heading, and the court found that the agent had never been appointed. This is not an administrative technicality — it is a hard rule with serious financial consequences. Before worrying about what happens if a deal falls over, confirm that your appointment document would survive scrutiny if challenged.

When the Contract Falls Over During the Cooling-Off Period

Residential property contracts in Queensland carry a five-business-day cooling-off period for private treaty sales. Timing can be influenced by the cooling-off regime for residential private treaty sales in Queensland. Buyers generally have a five-business-day cooling-off period, with auctions being a common exception. If your Form 6 says commission is earned on an unconditional contract, be aware of when a contract becomes unconditional in light of cooling-off and special conditions.

A contract terminated during the cooling-off period has not yet become unconditional — it has, in practical terms, never properly completed its formation. To terminate a contract during the cooling-off period, a buyer must give the seller a signed notice. The seller can deduct the termination penalty, and the balance of the deposit must be refunded within 14 days of termination. The termination penalty available to the seller is typically 0.25% of the purchase price under the standard REIQ contract.

Where does this leave the agent? Generally, without a commission entitlement. The commission trigger — whether it is set at the formation of an unconditional contract or at settlement — has not been met. The contract never progressed past its most preliminary stage. Unless the Form 6 contains an unusually broad commission clause that expressly addresses cooling-off terminations, the agent’s claim is difficult to sustain.

This is one scenario where agents who rely on marketing fee arrangements (separate from commission) have some protection. It is common to agree marketing expenses separately. The appointment should itemise the marketing approved, the cost, who pays, and whether those costs are payable even if the property does not sell. If agreed upfront and properly documented, those marketing costs may remain recoverable even when the deal never proceeds.

When the Contract Falls Over on a Standard Condition

Building and pest, finance, and due diligence conditions are the most common points of collapse in Queensland residential contracts. A buyer who exercises their right to terminate under a validly inserted special condition is exercising a contractual right — they are not breaching the contract.

Commission can be at risk if a contract terminates. In Limitless v Smith (2022, QCAT), the buyer terminated under the building and pest condition, and the deposit was refunded. The court found that the contract was not ended by mutual agreement; rather, the buyer validly terminated the contract, which the seller did not contest. As such, the agent’s commission was not triggered under their Form 6.

This case illustrates the critical distinction: a contract terminated via a standard condition never became unconditional. The commission trigger — assuming it was set at the unconditional point — was never reached. The agent walked away with nothing from that transaction.

However, the story does not end there. If the same buyer later purchases the property under new terms, the original agent may still claim commission, provided they were found to be the effective cause of the sale. This brings in one of the most important — and frequently contested — concepts in Queensland commission law.

The Effective Cause of Sale Doctrine

Even when a deal falls through, an agent who introduced the buyer into the transaction retains a possible future claim if that buyer ultimately purchases the property. The concept of effective cause determines whether that claim succeeds.

In Queensland real estate, determining whether an agent is entitled to commission for a sale often revolves around the concept of effective cause. Numerous court decisions have helped clarify what constitutes an effective cause, especially when multiple agents are involved in the sale of a property.

In LJ Hooker Ltd v Adams Estates Pty Ltd, Jacobs J said: “Effective cause” means more than simply “cause.” The inquiry is whether the actions of the agent really brought about the relation of buyer and seller, and it is seldom conclusive that there were other events which could each be described as a cause of the ensuing sale. The factual inquiry is whether the sale was really brought about by the act of the agent.

In Queensland, simply introducing a buyer to a property is not enough to automatically entitle an agent to commission. The concept of effective cause requires that the agent’s actions must have directly contributed to the sale. This means the agent must play a significant role in facilitating the sale, rather than just showing the property or introducing a potential buyer.

The practical implication: an agent who conducted inspections, negotiated terms, and brought a buyer to the point of signing — even on a contract that later collapsed — has built a factual record of causation. If that buyer returns six months later through a different agent and purchases the same property, the original agent’s claim is alive. Whether it succeeds depends on the specific facts, including how much time has passed, how material the original introduction was to the eventual sale, and whether the terms changed significantly.

Even after the exclusive agency period has expired, an agent may still be entitled to commission if they were the effective cause of the sale. This occurs when the agent introduces a buyer who eventually purchases the property after the agency period ends. Courts in Queensland have upheld agents’ claims for commission in such cases, provided they can prove their efforts directly contributed to the sale.

When the Buyer Defaults After the Contract Goes Unconditional

This is the scenario most favourable to the agent — and most surprising to sellers. A buyer who has gone unconditional has satisfied all conditions and has no contractual basis for pulling out. If they abandon the transaction regardless, they are in default. The seller’s remedies typically include forfeiting the deposit.

The standard terms in most Queensland agency appointments require sellers to pay commission even if the sale contract is terminated. This means that if the buyer defaults and the deposit is forfeited in favour of the seller, the agent is typically entitled to claim a portion of that deposit.

The reasoning is straightforward: if the Form 6 specifies that commission is earned on formation of an unconditional contract, the agent’s entitlement crystallised at that moment. The subsequent default of the buyer — an event outside the agent’s control — does not retroactively extinguish a right that had already accrued. The seller, who retains the forfeited deposit, is in a position to satisfy that commission entitlement from those funds.

A real Queensland example reinforces this principle. In one matter, Andersons Real Estate was appointed to sell a $12 million property. A subsequent contract for $7.5 million was signed but later terminated. The agency claimed $1.65 million in commission despite the contract termination. The court upheld the agency’s claim, ruling that the terms of the agreement entitled the agent to commission regardless of the sale’s failure to finalise.

However, sellers can request that these clauses be removed from the Form 6 appointment before signing. A seller who successfully negotiates a settlement-only commission trigger at the time of appointment bears no obligation to pay commission on a collapsed transaction, regardless of how far it progressed. This is a legitimate negotiating point — but it must be agreed in the Form 6, not assumed after the fact.

This also has a practical implication for how agents approach deposit collection. It assists agents in recovering their full commission promptly if a deposit of at least 3% — not more than 10%, or an amount enough to cover the commission — is obtained at the time a contract of sale is entered into. A deposit that is insufficient to cover commission in a post-unconditional collapse situation creates recovery difficulties, even where the legal entitlement is clear.

The Double Commission Risk — A Warning for Sellers

One scenario that agents should understand — and be prepared to explain to clients — is the possibility of a seller facing two commission obligations on a single property.

Regardless of whether an REIQ Appointment of Real Estate Agent form is provided as part of the Form 6, it is very possible the seller may be required to pay two lots of commission. This will most likely occur if the first contract is terminated after it becomes unconditional and the second subsequent contract settles.

If the first agent’s commission was earned at the point the initial contract became unconditional, that entitlement survives the termination. When the seller then re-lists — potentially with the same or a different agent — and a second sale proceeds to settlement, a second commission obligation arises. The seller pays twice.

This outcome is not unjust from a legal standpoint: the seller received the benefit of both agents’ work. But it can be a genuine financial shock to a seller who did not understand the terms of the original appointment. Agents who take the time to walk their clients through the commission trigger clause at the point of signing are doing both their client and themselves a service — disputes are far less likely when expectations are clear.

When an Invalid Form 6 Voids the Claim Entirely

No analysis of commission on a fallen deal would be complete without addressing the most brutal outcome of all: the agent is entitled to nothing because the Form 6 never validly created an entitlement in the first place.

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. These disputes often arise due to the structure of commission agreements, the effectiveness of agents in securing sales, and compliance with legal requirements, such as the proper use of Form 6.

An agent’s entitlement to commission will always be determined on the facts of each case. However, strict compliance with the requirements set out in the Act, and having a valid and enforceable appointment, are essential in protecting an agent’s entitlement to commission.

The most common form defects that destroy commission claims include:

• Commission rate or trigger event left blank or ambiguous
• Commission expressed as a percentage of estimated rather than actual sale price
• The appointment not signed before the agent commenced marketing
• The exclusive or sole agency period exceeding the 90-day statutory cap for residential property without proper renewal in writing
• The appointment not being provided to the client in signed form

Agents should keep an eye on the 90-day statutory cap for residential exclusive and sole appointments and only renew in writing if they want to continue. An appointment that has lapsed — even by a day — is not an appointment at all. If the deal falls through and a commission dispute arises, a lapsed or defective Form 6 leaves the agent with no legal foundation.

Recovering Commission When a Seller Refuses to Pay

Even where entitlement is clear, collection is sometimes contested. Sellers who have experienced the distress of a fallen deal are not always inclined to honour commission obligations they view as unfair.

Agents’ obligations under the Property Occupations Act 2014 (Qld), and the consequences where a contract of sale is not completed, are well established. Agents may need to revisit the requirements to claim commission and consider what options are available if a client refuses to pay commission.

In accordance with Clause 6 of the appointment, the seller client authorises the agent and directs the deposit holder, or any other person to whom any deposit is paid under a contract of sale, to pay to the agent any commission to which the agent is entitled immediately upon the entitlement to commission arising and the production of the appointment. This means the agent’s best practical protection is ensuring commission is paid directly from the deposit funds at the point of settlement — or, where the contract has not settled but commission has been earned, at the point the entitlement arises.

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.

Where a seller still refuses to pay, agents have avenues through QCAT (for claims within its jurisdiction) and the Magistrates Court or District Court for larger amounts. Agents may seek to start proceedings for breach of contract in the Magistrates Court (for claims over $25,000 and up to $150,000) by filing and serving a claim and statement of claim. If the seller client wishes to defend the claim, they are required to file a notice of intention to defend and defence within 28 days. The matter will likely progress to a settlement conference in an attempt to resolve the claim prior to the matter proceeding to trial.

The Agency Type Matters Too

The type of agency appointment affects commission entitlement in fallen deals in one further respect worth understanding.

The only difference between an exclusive agency and a sole agency is the extent of the entitlement of a selling agent to receive an agreed commission or other reward on the sale of particular property. Under an exclusive agency, a selling agent is entitled, on the sale of particular property and in accordance with the terms of an agreement with the seller, to receive an agreed commission or other reward, whether or not the selling agent is the effective cause of the sale. However, if the sale was subject to a sole agency, the selling agent would not be entitled to the commission or other reward if the seller was the effective cause of the sale.

For an open listing, the commission entitlement is even more restricted. Commission is normally payable only to the agent who was the “effective cause of sale.” If multiple agents claim to have introduced the buyer, disputes can arise — which is why clear terms and good records matter.

In a deal that falls through under an open listing, the effective cause analysis becomes particularly important if the buyer later returns. The agent who originally introduced the buyer needs to have documented that introduction clearly — the date, the method, the specific buyer — to support any future claim.

What This Means for Queensland Agents

The commission Queensland property deal falls through question does not have a universal answer. The outcome in any specific situation turns almost entirely on what the Form 6 says, when the contract collapsed, and why.

The practical conclusions for agents at every level are these:

Get the Form 6 right before anything else. Every clause must be complete, accurate, and signed before marketing commences. The commission trigger clause deserves careful attention — not just a default acceptance of whatever is pre-populated. If your agency practice is to set commission as payable at the unconditional stage, that needs to be clearly stated. If the seller insists on settlement as the trigger, that is their right, and you need to understand what you are agreeing to.

Understand what stage the contract was at when it collapsed. A contract terminated during cooling-off never became unconditional. A contract terminated under a special condition was validly ended without breach. A contract that went unconditional and was then abandoned by the buyer is a different legal situation entirely — and one where your entitlement is strongest.

Document the buyer introduction thoroughly. The effective cause doctrine is your insurance policy when a deal falls through and the buyer later resurfaces. Emails confirming the introduction, signed inspection records, and written negotiation correspondence all build the factual record you need.

Invoice early and route through the deposit where possible. Practical recovery is always easier when the commission is captured at the point the obligation arises, not chased after the fact.

Advise sellers of the double commission risk. If the first contract goes unconditional and then collapses, the commission obligation from the first transaction survives. A seller who relists and resells will be liable for two commission payments if the appointments are structured to earn commission at the unconditional stage. This conversation is one agents should have proactively — it protects the relationship and prevents disputes later.

Where a fallen deal leaves genuine uncertainty about commission entitlement — particularly in scenarios involving disputed effective cause, post-lapse appointments, or conjunction arrangements — agents should seek independent legal advice for their specific circumstances before concluding they have no claim or, conversely, before pursuing one that may not be well founded.