The Licensee in Charge (LIC) — known as the Principal Licensee in some states — holds personal liability for the compliance of their entire real estate office. When an agent under their supervision fails to comply with the law, the LIC can face disciplinary proceedings even if they personally did everything right. This guide covers every compliance obligation a LIC carries, and how to demonstrate that supervision was adequate.
What Is a Licensee in Charge?
The LIC is the Class 1 licence holder who is nominated to be in charge of a real estate agency. Their title varies by state:
- NSW: Licensee in Charge (LIC) — Class 1 real estate agent licence required
- VIC: Officer in Effective Control (OEC) — estate agent's licence required
- QLD: Principal Licensee — real estate agent's licence required
- WA: Licensee in charge — real estate and business agent's licence required
- SA: Registered land agent in charge — land agent registration required
An agency can only have one LIC at any time. There must always be an LIC nominated — an agency cannot operate without a designated LIC, and if the LIC ceases to be associated with the agency, a new one must be appointed immediately.
Supervision Obligations
The LIC's most important ongoing obligation is the supervision of all staff carrying out licensed functions. In NSW, this is prescribed in detail by the Property and Stock Agents Act 2002 (NSW) and the associated Supervision Guidelines published by NSW Fair Trading. Key requirements include:
- Maintaining a written supervision plan that specifies how each certificate holder and Class 2 agent is supervised
- Being physically present at the office (or ensuring a nominated supervisor is present) during all business hours
- Nominating a qualified supervisor whenever the LIC will be absent for more than 2 working days (in NSW)
- Documenting the nomination and the period of absence
- Regularly reviewing the work of supervised staff — including reviewing contracts, agency agreements, and trust accounting entries
- Taking disciplinary action where a staff member's work falls below the required standard
CPD Obligations — The LIC and Their Staff
The LIC has two separate sets of CPD obligations:
Their own CPD
The LIC must complete their own annual CPD requirement — in NSW, 12 hours per year (9 compulsory, 3 elective). This is a personal obligation as a Class 1 licence holder.
Staff CPD oversight
Under the LIC's supervision obligations, they are responsible for ensuring every agent and certificate holder in the office is completing their required CPD. If a supervised person fails to meet their CPD obligation, the LIC can face disciplinary proceedings for failing to supervise adequately.
Trust Accounting Obligations
The LIC is personally responsible for the management of the agency's trust account. Key obligations include: ensuring monthly reconciliations are performed and documented within the required timeframe; ensuring trust funds are not disbursed without proper authorisation; arranging and lodging the annual trust account audit; and immediately reporting any shortfall or suspected misappropriation to the regulator. A trust account failure — even one caused by a staff member — can result in the LIC's licence being suspended or cancelled.
AML/CTF Obligations
If the agency carries out real property transactions (buying or selling on behalf of clients), the LIC is responsible for implementing and maintaining the agency's AML/CTF program. In most agencies, the LIC is also the AML compliance officer — the person responsible for day-to-day AML oversight, SMR lodgement, and annual AUSTRAC compliance reporting. This cannot be delegated away without careful consideration; the LIC retains ultimate responsibility for the adequacy of the program.
Policies, Registers, and Records
The LIC is responsible for maintaining a compliant policy and procedures library, keeping statutory registers (complaints, gifts, incidents, risks) up to date, and ensuring staff understand and apply the agency's policies. Policies must be reviewed regularly — typically annually — and updated when legislation changes. In the event of a regulator audit, the LIC must be able to produce these records promptly.
What Happens When Compliance Fails
Where a compliance failure is identified in an audit or complaint investigation, the state regulator may take action against both the individual who committed the breach and the LIC for failure to supervise. Possible outcomes include:
- Written warnings or cautions
- Conditions placed on the licence (e.g. mandatory supervision or trust account monitoring)
- Licence suspension
- Licence cancellation and prohibition from holding a licence in the future
- Civil penalty orders
The LIC's best defence in any disciplinary proceeding is evidence that supervision was adequate — that they had systems in place, monitored compliance, and took action when issues arose. That evidence needs to exist before the regulator calls.
Built for licensees in charge
REA Hub is designed around the LIC's obligations — tracking CPD across the whole office, maintaining trust account records, storing AML/CTF documentation, and keeping all statutory registers in one structured platform. If the regulator calls, your records are ready.
See how REA Hub supports LICs →This guide is for general information only. Obligations vary by state. Always verify current requirements with your state regulator or a qualified compliance professional.