Leading Real Estate Offices Welcome Tougher Penalties

Talks between the government and the Real Estate Institute of New Zealand (REINZ) on misappropriate and unethical practices in the real estate industry, are being welcomed by the Professionals' Auckland/Northland region.

Though malpractices apply to only a few cases each year, and despite the threat of vastly increased penalties and an independently appointed industry watchdog, the Professionals' Auckland/Northland offices say sharpening up the legislation will produce benefits for the real estate industry as well as for buyers and sellers.

"The industry has been calling for tougher penalties for years decades, in fact," says Barry Joblin, CEO of Professionals Glenbarry Real Estate in Northland.
"It has long been recognised within the industry that the penalties aren't severe enough. Finally, the focus is coming on to it. There's nothing hard about it; it could be done, I imagine, in about three to six months."

Barry has been an REINZ District President, as well as an investigator, prosecutor and judge of complaints. "So, I've been right the way through the current system. It's a good system, it works - but it does need more teeth."

"Unfortunately, now that it's in the news, the media tend to look to the Institute, which is a bit unfair. The rules need to be revised, and that's what the Institute has asked and asked for. I was District President here eight years ago, and we tried to get those fines increased then, but the government just gave lip-service to it."

Garry Denley, Branch Manager of the Professionals' Lochore's Real Estate in Glenfield, and a National Councillor of REINZ, agrees with Barry. "Many of us in the industry are trying to make sure that the disciplinary system is transparent and fair to all parties. We've been operating under that system since 1976, and it has worked very well, and we've had very good support from governments along the way but it needs to meet today's demands. The fines were set back in 1976 and haven't been adjusted since, so they need to be moved. For the last ten years the Institute has tried to get various governments to adjust them."

Garry points out that more than 100,000 properties are sold each year, and the incidence of malpractice is tiny in comparison. "There are 18,000 people involved in the business, 100,000 properties sold and, out of that, approximately 240 written complaints received by the Institute about the activity of salespeople or companies per year. Of those, less than 100 turn out to have any merit, and that's been pretty consistent."

Garry Denley is also keen to see the introduction of continuing professional development among real estate salespeople, and supports the Institute's drive to bring in on-going compliance education: "People need to keep up to date with compliance requirements which are huge, and keep growing every year."

Professionals Regional Manager for Auckland/Northland, Gary Murphy believes that all responsible real estate salespeople will welcome any move to eradicate poor and unethical practices. "It is long overdue, and can only be of great benefit to all parties in the purchase or sale of any property. The current fine of $750 is nowhere near enough to be an effective deterrent. We are extremely pleased to think that 2007 could see the introduction of fairer, more comprehensive regulations."

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