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Home buyers and sellers protected

Hon Clayton Cosgrove
Associate Minister of Justice

13 December 2007 Media Statement

Home buyers and sellers protected

Better protection for Kiwi consumers and support for honest real estate professionals moved a step closer last night with the first reading and referral to a select committee of the Real Estate Agents Bill, despite the National Party selling out on consumers by not supporting the Bill, said the Associate Justice Minister Clayton Cosgrove.

“It always saddens me when a Party puts petty politics ahead of much needed consumer protection reforms,” said Mr Cosgrove. “National was the only Party to vote against the Bill that brings accountability, transparency and openness to the real estate sector, establishes an independent complaints system and introduces a range of new consumer protection measures, including compensation for consumers who have been ripped off.”

“National’s Simon Power on the one hand told the House he agrees that an independent Authority is needed in order to ensure openness and accountability in this sector – which is the cornerstone of this Bill – yet he won’t support the Bill to select committee. He has sold out consumers by saying the status quo is good enough for New Zealanders.”

“Kiwi’s greatest asset is often their home, so it is paramount that people have access to a transparent and effective disciplinary process should they feel they have been ripped off.”
Mr Cosgrove said the industry’s desire to continue dealing with complaints in-house was a major factor behind the government’s decision to remove its privilege of self-regulation.
The Bill:

- Removes regulatory functions from the Real Estate Institute of New Zealand (REINZ), as well as the compulsory requirement for agents to be members of REINZ

- Abolishes the Real Estate Agents Licensing Board and creates a new body, independent of the industry, called the Real Estate Agents Authority, to oversee licensing, complaints, disciplinary and enforcement processes and to provide information for consumers. The Authority will have wide investigative powers and will be able to order a wide range of penalties and remedies

- Creates an independent Disciplinary Tribunal to deal with serious cases, which will have the ability to order the cancellation of licences and award compensation. Complainants will not be required to hire lawyers because the Authority - through its Complaints Assessment Committee - will represent their case if it is referred to the Disciplinary Tribunal

- Establishes a public register of real estate agents and salespeople that records any breaches of the industry standards against the names of those involved

- Introduces a fit and proper person test for people entering the industry, and a requirement for ongoing professional development training

- Strengthens mandatory disclosure requirements – including possible conflicts of interest – and introduces a cooling off period for sole agency agreements

- Requires agents to provide mandatory standard information before clients sign a sale and purchase agreement

"Consumers will be better protected by an independent disciplinary process with effective redress for breaches of a new code of conduct and of the law. Honest real estate professionals – who are the vast majority - will no longer be tarred by the same brush as the last land shark who rips someone off and brings the entire industry into disrepute," he said.

Mr Cosgrove said the new structure would be funded by the industry, not taxpayers, and it will not cost consumers anything to lodge a complaint. The Bill has been referred to the Justice and Electoral Committee for consideration and public submission.


ENDS

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