How to Set Up Your Real Estate Agency to Protect Your Personal Assets

One Wrong Move Could Put Your Personal Assets on the Line.

Running a real estate agency is exciting. You’re building something valuable, growing your rent roll, leading a team, and creating wealth. But here’s the part many principals don’t realise until it’s too late: if your agency isn’t structured and protected properly, your personal assets - your home, your savings, even your car - could be at risk.

We’ve seen agency owners lose everything because they set up the wrong way, skipped key protections, or didn’t update their contracts. The good news? With the right legal and business structures, you can shield your assets, limit your liability, and sleep easier at night.

In this blog, we’ll break down:

• Why corporate structuring is your first line of defence

• Why you should never keep assets in your own name

• How insurances can save you when things go wrong

• Why contracts with proper liability and indemnity clauses are non-negotiable

• Real case studies from agencies we’ve helped protect

Get Your Corporate Structure Right

Think of your agency like a building. If the foundations aren’t solid, the whole thing is shaky. Your corporate structure is that foundation. Too many principals start out as sole traders or simple partnerships because it’s cheap and easy. But here’s the catch: you are personally liable for everything the business does.

That means if your agency gets sued or owes money, creditors can come after your house, your savings, or other assets. Not fun.

The smarter approach is to set up as a company and/or trust structure. A company is a separate legal entity, which means it carries the risk - not you personally. A trust can also help you protect and control wealth while separating ownership from day-to-day operations.

Case Study: The Startup Duo

Two sales agents left a franchise to start their own agency. They wanted to save money, so they set up as a partnership. Within a year, they faced a legal dispute with a supplier. Because they were personally liable, one almost lost his house. They came to us, we restructured them into a company with clear shareholder arrangements, and now their personal assets are off-limits. 

Don’t Hold Assets in Your Own Name

Here’s a golden rule: own nothing, control everything. If you hold assets like property or investments in your personal name, they’re an easy target if someone sues you or your agency. But if your assets are held in a trust or in a spouse’s name (who isn’t exposed to business risk), it’s much harder for creditors to touch them.

We’ve seen agencies collapse under disputes or compliance fines, and owners who kept everything in their own name lost it all. Protecting yourself means thinking beyond your agency and looking at how you structure personal wealth too.

Case Study: The Principal Who Moved Too Late

A Brisbane agency principal kept several investment properties in his own name – mostly for negative gearing and tax reasons. When a staff dispute turned into an expensive court battle, creditors came after his personal assets (as he was personally liable in this situation). We were able to help restructure his remaining portfolio, but he lost one property unnecessarily. If he’d acted earlier, it could have been avoided.

Insurances: Your Safety Net 

Even the best legal structures can’t cover everything. That’s where insurance comes in. But not all policies are created equal. Real estate agencies should consider:

• Professional indemnity insurance – covers claims of negligence or mistakes

• Public liability insurance – protects against accidents or injuries on your premises

• Cyber insurance – crucial with the rise of privacy breaches and ransomware

• Management liability insurance – protects directors personally from certain risks

Insurance won’t stop a lawsuit, but it can pay for the fallout. The trick is making sure your policies actually cover the risks your agency faces. Too many principals assume they’re covered, only to find out the fine print excludes real estate-specific risks or they are ‘under-insured’.

Contracts: Apportion Liability the Right Way

Contracts aren’t just about getting deals done. They’re about managing and shifting risk. Every supplier agreement, management agreement, contractor agreement, and staff contract should have clauses that clearly apportion liability and include indemnities.

For example, if your contractor makes a mistake that costs your client money, is your agency liable? Or does the contract push that responsibility back where it belongs? Without the right clauses, you could be left carrying the can for someone else’s mistake.

Case Study: The Contractor Clause Fix

We worked with an agency that used contractors for property management inspections. One contractor breached privacy laws by mishandling tenant data. Because their contracts didn’t apportion liability, the agency was on the hook. We updated their contractor agreements with indemnity clauses, and now liability sits where it should.

Key Takeaways 

• Choose the right structure. Companies and trusts protect your personal assets better than sole trader or partnership setups.

• Don’t hold assets in your name. Use trusts or other arrangements to shield your wealth.

• Get the right insurances. Tailor policies to real estate-specific risks like privacy breaches and compliance issues.

• Fix your contracts. Make sure liability and indemnities are clear so you’re not responsible for others’ mistakes.

Next Steps

If you’re starting an agency, or running one without these protections in place, now’s the time to act. One wrong move could cost you everything you’ve worked for.

Book your free 10-minute call with our team at O*NO Legal. We’ll review your setup and help you make sure your agency and your personal assets are covered.

Frequently Asked Questions (FAQ)

• What’s the best legal structure for a real estate agency?

  Most agencies benefit from a company structure, often combined with a trust. It separates your personal assets from the business and limits liability. 

• Can creditors take my house if my agency is sued?

  Yes, if you’re a sole trader or in a partnership. With a company structure and proper planning, your house is far better protected. Also, there are some cases where even in a company situation, a director can be held to be personally liable – this is why it is best to have no assets in your personal name. 

• What insurances should a real estate agency have?

  At minimum: professional indemnity, public liability, and cyber insurance. Many agencies also need management liability insurance. 

• How do contracts protect my personal assets?

  Contracts with clear liability and indemnity clauses make sure responsibility sits with the right party - so you’re not paying for someone else’s mistakes. 

• Is it too late to restructure if I’ve already started my agency?

  It’s never too late. Restructuring early is ideal, but even established agencies can make changes to protect personal assets – but get your accountant involved as there could be tax consequences of a restructure. 

Kristen Porter – Legal Director, O*NO Legal

Kristen Porter is the Founder and Legal Director of O*NO Legal. With over 20 years of legal experience and dual degrees in Law and Commerce, Kristen brings a rare blend of legal expertise and commercial insight to every matter. She is a trusted advisor to business owners and agency leaders across Australia, helping them build profitable, legally-sound businesses. Known for her practical, no-fluff advice, Kristen specialises in real estate agency law, corporate, and privacy law and regularly presents at industry events. At O*NO Legal, Kristen leads a team committed to making the law clear, actionable, and always aligned with your business goals.

Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.