Real estate industry proposals fall short

Associate Justice Minister Clayton Cosgrove said he was disappointed with industry proposals to improve the regulation of real estate agents presented by the Real Estate Institute of New Zealand (REINZ) at a meeting today.

In October this year Mr Cosgrove asked REINZ to come up with a reform package that would deliver an open, transparent and independent complaints and disciplinary regime. He also requested that REINZ revamp up its code of ethics for consumer protection.

The move was prompted by concerns over how complaints by the public were being processed and whether provisions available under the Real Estate Agents Act 1976 - including the ability to suspend or strike off agents - were being fully utilised. Mr Cosgrove thanked REINZ for its efforts, but said the proposals he received today fall well short of his expectations.

"The Institute's main proposal to set up a new 'Review Committee' consisting of a REINZ legal counsel, a REINZ national councillor and an external legal compliance specialist to hear all complaints, is no more independent than the current structure," he said. "There is also no apparent transparency and very little in this package to give New Zealanders confidence that their rights are being protected."

"Consumers need a fair, open and transparent system which allows complaints to be resolved quickly and holds licencees and salespersons accountable," Mr Cosgrove said. "These proposals let down both the consumer and the industry."

Mr Cosgrove said he is reluctant to spend taxpayer money on changing the legislation as there are already tough enough provisions in the Act.

"However I have told the Real Estate Institute today that I have instructed the Ministry of Justice to develop a range of legislative and non-legislative options to deliver an open, transparent and independent disciplinary regime that will protect consumers and decent ethical real estate agents from the sharks in the industry."

Mr Cosgrove said Justice officials would report back to him in February 2007.

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