Changes to Real Estate Framework Time-Consuming

29 May 2007

Changes to Real Estate Framework Time-Consuming and Costly

Proposed changes to the Real Estate Agents Act will add unnecessary layers of bureaucracy to the industry and do little to ensure greater levels of professionalism among its agents, according to First National Real Estate Chief Executive Officer Paul Slatin.

Mr Slatin said while he respected any endeavour made to protect consumers from unethical actions and supported moves for greater ethics in the real estate industry, changes proposed today will not effectively meet these objectives.

Associate Justice Minister Clayton Cosgrove today released the Government’s Preferred Options for Reform of the Real Estate Agent’s Act (1976). The Minister has proposed the creation of an independent Real Estate Licensing Authority which would be responsible for investigating and resolving complaints

Mr Slatin said the fact that real estate agents will no longer be required to be members of the Real Estate Institute of New Zealand will do little to raise the bar of professionalism in the industry.

“The proposal to remove the requirement for an agent to be a member of the Institute is pointless and has little to do with the public interest.

“Membership of REINZ guarantees that the agent a consumer deals with is qualified, subscribes to codes of ethics and practice and is informed on an ongoing basis of real estate matters that vitally affect consumers.”

Mr Slatin said that the creation of the Real Estate Licensing Authority would be a unnecessary and expensive exercise.

“Clearly the need for such an authority would be mitigated if efforts were concentrated on revamping the current Act, which all will agree is outdated,” he said. “Here we have a case of additional layers of authority and bureaucracy being created when what is needed is the power to impose suitable penalties and rid the industry of bad apples.”

Slatin said that simply moving the antiquated Real Estate Agents Act of 1976 forward 30 years would have restored consumers’ confidence in the industry and at the same time ensured a highly coherent and professional industry.

“The reason that the public has come to regard regulations governing the industry as ineffective is because the level of fines and penalties has been locked into a piece of legislation that has existed since 1976. Back then a $750 fine was substantial but in 2007 it is not.

“We were looking forward to a final outcome that was transparent and accountable but sadly the addition of new layers of bureaucracy would have the opposite effect.

First National Real Estate has been supporting the Real Estate Institute of New Zealand in its move to update the Act after it first mooted the change close to four years ago.

First National Real Estate will be filing a submission on the proposed changes to the Act.

ENDS

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