Real Estate Agents Bill remains on track

30 July 2008

Real Estate Agents Bill remains on track

Associate Justice Minister Clayton Cosgrove says the Real Estate Agents Bill is on target to progress through Parliament following positive discussions with support parties.

The Bill overhauls the Real Estate Agents Act 1976 and delivers on the government’s promise to bring accountability, transparency and openness to the real estate sector, and to establish an independent complaints system that protects consumers and supports honest real estate professionals. The Bill also puts an end to the industry’s self-regulation and introduces a range of new consumer protection measures, including compensation for consumers who have been ripped off.

“I would like to thank New Zealand First and the Green Party for re-confirming their ongoing support for the Real Estate Agents Bill and for the contributions they have made to the development of this Bill,” Mr Cosgrove said

The Bill as reported back from the Justice and Electoral Select Committee contained some changes that improved and clarified certain provisions, while not altering its key reforms. Discussions with support parties have resulted in four further suggested changes to the Bill:

- Rescind the requirement to review of employment status of salespersons: This is to address concern that requiring a review of the employment status of salespersons may cause unnecessary uncertainty, and may have the potential to cause confusion in the industry at a time when it is undergoing a significant step-change as the real estate market repositions.

- Rescind the decision to regulate the conduct of Auctions: The provisions that were in the Bill were designed chiefly to address the issue of dummy bidding, however evidence has been submitted that the real estate industry has already taken significant steps to address this issue. The Real Estate Agents Authority, through its consumer education role, will ensure that consumers are aware of issues that may affect them if buying or selling real estate at auction and, through its role in setting professional standards and a code of conduct for the industry, it will be able to reduce the risks consumers are exposed to in this area.

- Experience criteria to be licensed as an agent or branch manager to be raised from 2 out of 10 years to 3 out of 10 years: This is to address concern that 2 years experience in the last 10 years is not sufficient to ensure that those holding an agent’s or branch manager’s licence possess sufficient experience within the industry.

- Real Estate Institute of New Zealand (REINZ) to be consulted on the first-term appointments to the Authority and Disciplinary Tribunal: To ensure that the transition between the current regulatory regime and the proposed regime is as smooth and seamless as possible, for the first-term appointments to the Authority and Disciplinary Tribunal only, REINZ will be consulted to help identify the most appropriate industry experienced people to serve as the industry representatives.

Mr Cosgrove has also reconfirmed the government’s commitment to a review of the regulation of property managers in response to the concerns raised by a number of submitters.

“Although no substantial or robust evidence has emerged to date that a significant problem exists with unlicensed property managers, the Government agrees with the Select Committee and support parties that the high levels of concern from submitters justify reviewing the regulation of property managers in more detail,” Mr Cosgrove said.

The Government’s objective is to have the Real Estate Agents Bill passed this year.

ENDS