Govt should regulate property managers, says REINZ
If the Government wants to help renters it should regulate property managers, says REINZ
As submissions close today on the proposed ban on letting fees, the Real Estate Institute of New Zealand (REINZ) believes that if the Government really wants to help renters, it should regulate the property management industry rather than focus on banning letting fees.
In announcing the proposed Bill, the Housing Minister, the Hon. Phil Twyford, talked about wanting to improve the lives of renters and he described letting fees as “unfair”. While the proposed ban on letting fees would help renters initially from a financial perspective, it would be more beneficial to improve the lives of renters by regulating the property management industry by having appropriate standards and sufficient consumer protection in place.
Bindi Nowell, Chief Executive at REINZ says: “If the Minister wants to deliver fairness and affordability in the rental market a more effective way of doing this would be to regulate the property management industry.
“Whilst a proposed ban on letting fees would reduce upfront fees for tenants, it is highly likely that those fees may simply be charged to landlords and then recuperated through increased rent. This would contradict the purpose of the ban which is to reduce cost and increase fairness for tenants,” points out Norwell.
Currently there are no rules governing the handling of rental payments and no professional standards that property managers must meet unless the property manager is also a licensed real estate agent.
“There are some fantastic property managers out there who have high ethical standards and adhere to the REINZ Code of Agency Practice, but this is unfortunately undermined by others who do not have the same standards of ethics,” says Norwell.
“At the moment anyone can become a property manager meaning there is no consistent accountability and protections in place across the industry such as holding money in a trust account, having the appropriate insurance in place to operate in the industry, having a dispute resolution process in place or regulatory compliance being adhered to. This means that renters – who include some of our more vulnerable members of society – could be taken advantage of and their money isn’t protected the way it should be,” continues Norwell.
“Therefore, if the Government really wants to protect tenants, it should take the opportunity while reviewing the wider Residential Tenancies Amendment Act and include regulation of property managers as part of that,” concludes Norwell.