What to Do If a Seller Refuses to Pay Your Commission at Settlement in Queensland
Settlement day arrives, the property transfers, and then the message comes through — the seller isn’t authorising your commission. It doesn’t happen often, but when it does, most agents are underprepared. Knowing exactly what your legal position is, where your documentation stands, and what steps to take in what order is the difference between recovering every dollar you’re owed and writing it off as a hard lesson.
This is what you need to know.
Your Legal Foundation: The Form 6 and the Property Occupations Act 2014
Before any recovery strategy makes sense, you need to understand precisely where your entitlement comes from — because that entitlement has conditions attached.
An agent can only recover commission if they have been properly appointed in accordance with the legal requirements imposed by the Property Occupations Act 2014 (Qld). That means everything flows from your Form 6. At its core, a Form 6 is a binding contract between the seller and the agent, and once signed, both parties must comply with their obligations — failure to comply may result in legal proceedings.
If an agent has been validly appointed to sell a property in accordance with a Property Occupations Form 6, 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. The operative word is validly. In Queensland, a valid Form 6 appointment is essential for commission to be payable, and the form must clearly set out the commission amount and when it’s payable — with any percentage-based commission calculated on the actual sale price, not an estimate. Even minor omissions can invalidate the appointment.
Section 104 of the Act sets out the requirements which must be satisfied for an appointment to be valid and enforceable. Before you escalate any dispute, sit with your Form 6 and verify it satisfies every one of those requirements. A seller who refuses to pay commission will almost always look for a defect in the paperwork as their primary line of defence — and Queensland courts and tribunals have given that defence legs when the paperwork genuinely falls short.
When Commission Is Actually Triggered
One of the most common sources of dispute isn’t a seller acting in bad faith — it’s a genuine disagreement about whether the commission trigger has been met. Your Form 6, combined with the REIQ Essential Terms and Conditions, defines this precisely.
Clause 5 of the REIQ Essential Terms and Conditions attached to the appointment for residential sales provides that the seller client agrees to pay the agent commission if a contract of sale of the property is entered into with a buyer — whether within the term or after the term, where the agent is the effective cause of sale within the term — provided that the contract of sale is completed; or the seller client defaults under the contract of sale and the contract is terminated by reason of or following that default; or the contract of sale is not completed and the whole or part of the deposit is liable to be forfeited; or the contract of sale is terminated by mutual agreement of the seller client and the buyer.
That last point catches many sellers off guard. If settlement does proceed normally and the seller simply refuses to authorise payment at the closing stage, there is no ambiguity: the trigger has been met and the debt is owed.
The type of appointment also affects your position. Under an open listing, the agent is only entitled to commission if the agent is the effective cause of the sale; under a sole agency, the seller must pay if the property sells, other than if sold privately; and under an exclusive agency, the agent is entitled to be paid commission if the property sells, regardless of the cause of the sale. Know which category your appointment falls into before you claim — and document accordingly.
There is also the question of post-term entitlement. 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, and Queensland courts have upheld agents’ claims for commission in such cases, provided they can prove that their efforts directly contributed to the sale.
Checking Your Own Position Before Taking Action
The instinct when a seller refuses to pay is to move immediately to enforcement. Resist it. A rushed claim made on a defective Form 6 can cost you more than the commission itself.
Run a fast but thorough audit of your file. Verify that your Form 6 is signed, that every required field is completed, that the commission figure (or calculation method) is clearly stated, and that the seller received the appointment form as required under the Act. 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. That is a catastrophic outcome for something preventable.
Also confirm the commission authorisation mechanism in your appointment. 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 the commission from the deposit or settlement proceeds. If your appointment contains this clause and the conveyancer has been directed accordingly, you may have a pathway to payment at settlement that does not require the seller’s active co-operation — though in practice, most conveyancers will not disburse funds into dispute without clear authority.
Check your marketing cost records too. Legislation imposes certain conditions on the recovery of commission or expenses by an agent, including that a 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 and, in the case of expenses, actually expended. Any discrepancy between what you’re claiming and what the Form 6 authorises will be used against you.
The First Step: Direct Negotiation
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.
This is not just strategic — it is genuinely the right first move in most cases. A seller who refuses to pay often has a grievance, real or perceived, about the service they received, the outcome they expected, or a misunderstanding about what they actually signed. A direct conversation, with your principal involved if appropriate, can resolve disputes that would otherwise consume months in a tribunal.
Put everything in writing. If you’ve had a phone call, follow it up immediately with an email summarising what was discussed and what outcome was proposed. If the seller raises a specific objection — they claim you weren’t the effective cause, they claim a marketing cost was unauthorised, they say the Form 6 was never properly explained — document their position and get your response on record. You are building a paper trail that will serve you if the matter escalates.
Set a clear deadline for resolution. If negotiation doesn’t produce a result within a defined timeframe — 14 days is reasonable — proceed to the next step. Letting the matter drift only encourages the seller to believe non-payment is a viable long-term position.
Formal Recovery Options in Queensland
When direct negotiation fails, you have structured legal pathways available. The right one depends primarily on the amount of commission in dispute.
Queensland Civil and Administrative Tribunal (QCAT)
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, and the matter will likely progress to a mediation before being listed for a hearing if it cannot be resolved.
QCAT is the practical first resort for most residential commission disputes. The process is relatively accessible, the filing costs are modest, and the tribunal is familiar with real estate commission matters. Prepare your claim with your Form 6, all correspondence with the seller, your evidence of the work performed, the signed contract of sale, and any settlement records confirming the transaction completed. The strength of your documentation here is everything.
In one notable Queensland matter, QCAT ruled in favour of the agent — awarding $25,000 in commission, plus interest and filing fees — even where the sellers argued the agency had failed in its marketing duties. The lesson: a well-documented file can withstand a conduct-based challenge from a seller.
Magistrates Court
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 wishes to defend the claim, they are required to file a notice of intention to defend and a defence within 28 days.
Magistrates Court proceedings are more formal and typically require legal representation. The costs involved are higher, but so are the stakes — a residential commission on a Brisbane or Gold Coast property at current values can comfortably exceed the QCAT threshold. Factor realistic legal costs into your decision to proceed. If your commission claim is $28,000, the net recovery after legal fees may not justify contested Magistrates Court proceedings unless the seller’s defence is weak.
District Court and Supreme Court
For high-value commercial listings or luxury residential sales, commission disputes can reach the District Court (up to $750,000) or the Supreme Court (above that). In one Queensland case, an agent claimed recovery of $1,650,000 from a seller on account of commission payable under a Form 6 on the sale of a 500-acre property listed at $12,000,000 — with an alternative claim of $330,000 if calculated under an earlier Form 6 in the event the later appointment was found ineffective. At that level, specialist property litigation lawyers are essential.
The appellate record from these higher-value cases is instructive for agents at any level. The appeal court dismissed the seller’s appeal, finding no error on the part of the trial judge — the Form 6 appointment appointed the agent as real estate agent for the sale of the property, it expressly provided for the payment of commission in the factual circumstances that prevailed, and the agent had established entitlement to the claimed commission on the basis that a contract of sale had been entered into during the term of the open listing, with the agent being the effective cause of sale within that term.
The “Effective Cause of Sale” Defence
The single most common legal shield a seller will deploy against a commission claim — outside outright Form 6 defects — is arguing that the agent was not the effective cause of sale. This argument carries the most weight in open listing situations, but sellers attempt it regardless.
The effective cause doctrine requires you to demonstrate that your efforts initiated and maintained a chain of causation that directly led to the buyer purchasing the property. Introduction of the buyer is not sufficient on its own. Disputes over who was the “effective cause” of sale are among the most common factors that put an agent’s commission at risk.
The practical lesson is clear: keep detailed records of all your communications and involvement with buyers, and remain active in the negotiation stage. Call logs, email correspondence, open home attendance records, offers presented, price negotiations documented — all of this builds your effective cause case. An agent who can produce a continuous documentary record from initial enquiry through to signed contract is in a fundamentally different legal position from one relying on memory.
Where a second agent was involved, the analysis becomes more nuanced. In one Gold Coast case, the court initially awarded commission to the first agency, but on appeal the decision was reversed, highlighting the importance of the second agent’s role in finalising the sale. The critical variable is always: who, in practical terms, was the proximate cause of the buyer submitting the successful offer?
Protecting Your Position Before Disputes Arise
The best time to handle a commission dispute is before it happens. There are several straightforward practices that significantly reduce your exposure.
Real estate commissions in Queensland are not capped by law — they are negotiable and must be recorded in a signed Form 6 before the agent starts work. The Form 6 should clearly state the commission structure, confirm whether GST is included or excluded, and set a precise trigger for when commission is earned.
Walk the seller through the commission terms at the time of signing. Not as a formality — as a genuine explanation. A seller who clearly understands when commission becomes payable, including in scenarios where the contract falls over through their own default, is far less likely to dispute payment later. In Hudson v Stanfield (2013) — the “Honeycomb case” — the agent’s failure to properly explain the sole agency and open versus exclusive listing options was central to the dispute. The obligation to explain the appointment is not merely procedural; it is your best protection.
For residential property, exclusive or sole agency appointments are capped at a statutory maximum of 90 days and must be renewed in writing if you wish to continue. Keep your appointment current. An expired exclusive appointment that has not been properly renewed in writing can complicate your commission entitlement, particularly if the sale concludes after the original term.
Finally, make sure the commission direction in your appointment is set up correctly from the start. Clear documentation, practical negotiation, and a watertight Form 6 are the best tools to prevent disputes and keep your sale moving smoothly. Arrange, where possible, for the conveyancer handling settlement to be directed in writing to pay your commission from settlement proceeds — this is standard practice and removes the seller’s ability to simply withhold payment at the last moment.
What This Means for Queensland Agents
A seller refusing to pay commission at settlement is not a dead end — but how well you recover depends almost entirely on how well you set up the appointment in the first place and how thoroughly you documented the campaign.
Your immediate actions when a refusal occurs: confirm your Form 6 is complete and compliant under s.104 of the Property Occupations Act 2014; put your commission demand in writing with a clear deadline; engage your principal immediately; and do not disburse or release any related funds until the matter is resolved or legal advice is obtained.
If direct negotiation fails, the pathway is clear. Commission disputes up to $25,000 go to QCAT; disputes between $25,000 and $150,000 go to the Magistrates Court. The filing process is accessible, but your file needs to be solid — a signed Form 6 with all fields completed, evidence of your role in the transaction, and a record of every material communication from appointment to contract.
The agents who lose commission claims are not usually those with bad legal positions — they are those with incomplete paperwork, undocumented buyer interactions, and Form 6 appointments that were rushed through signing without proper explanation. Fix those habits now, and a seller’s refusal becomes a recoverable problem rather than a written-off loss.