POA Form 6 causing unnecessary concern

Contributed by MAHONEY LAWYERS – 24 August 2017

POA Form 6 causing unnecessary concern

Most of our readers will be aware of the multiple versions of the POA form 6 that have been released by the Office of Fair Trading (OFT) since the from was first introduced when the Property Occupations Act (POA) commenced in 2014. We are already at version 5 in just 3 years – at one stage there were 3 changes in just a few months!

The problem has been compounded by there being no phase out time for the old versions. Unlike the old PAMD form 20a, the OFT did not allow any such phase out time so from the date the new version was introduced it was the version that had to be used and there was no grace period for use of the old version.

The multiple versions have been an issue for accountants conducting income verifications for management rights buyers and they have been reporting any noncompliance where old versions of the form 6 have been used. That in turn has led some lawyers to demand that old versions of the form 6 be replaced with new forms 6 using the correct version. Many managers have also been concerned about the validity of outdated versions of forms 6.

The concerns of accountants and managers arise because of the provisions of the POA which require that letting appointments be in the “approved form” – being the form approved by the chief executive of the OFT. At any given time the approved form will be the version of the form current at that time. The argument is that an outdated version is not the approved form with the consequence that the agent is in breach of POA and cannot charge commission.

The Court of Appeal considered a similar point in relation to a PAMDA form 21a (used for real estate sales) where an agent had used an outdated version. The Court found in the agent’s favour by relying on a section of the Acts Interpretation Act which states that where a form is prescribed or approved under an Act, strict compliance with the form is not necessary and substantial compliance is sufficient. That expression means that where the form used was substantially in accordance with, and did not depart from, the prescribed form in any material respect, then that was sufficient compliance with the relevant Act.

This ruling, that strict compliance with the current version of the form is not necessary provided there is substantial compliance, has equal application to the various versions of the POA form 6. The differences between the versions are minimal. Each contains all of the information prescribed by the POA and a unit owner’s interests are not adversely affected by any differences in the versions. It is therefore our view – and one that others are now following – that the use of an outdated version of the form 6 is of no consequence. Having said that we encourage all managers to use the current version whenever procuring new appointments.

Nicole Cleary,
Senior Associate
Mahoney Lawyers