REINZ Not Supportive of Proposed Levy Increase

REINZ Not Supportive of Proposed Levy Increase

The Real Estate Institute of New Zealand (REINZ) has reacted strongly to a proposed 50% levy increase the Real Estate Agents Authority (REAA) is planning to impose on all real estate agents.

“REINZ is committed to working constructively with the REAA, and is supportive of the establishment of a regulatory body for our industry. We cannot support a significantly large increase in levies being imposed on an already stressed industry,” says Rosanne Meo, REINZ Chairman.

“We are very concerned about the timing and the quantum of the proposed levy increase. We challenge the basis of the proposed levy increase and regard it as neither fair nor reasonable.”

The REAA is proposing to increase their levies from $495 to $760 per annum. The levy funds the complaints process; the provision of information to consumers, and licensing people and companies who work in the real estate industry.

The projections included in the REAA’s statement of Intent (July 2010) show that income from operating levies and applications for 2011 will need to more than double from $2.825m to $6.630m and then double again to $12m in 2012.
“We understand that the REAA intends to raise their levies to help off-set an assumed increase in complaints as well as a shortfall of income due to an unplanned decline in the number of licensees,” says Mrs Meo.

“In fact we know that the number of complaints have fallen from 55 to an average of 14 per week and the drop in licences sadly reflects the market place.”

An independent benchmarking analysis by Grant Thornton undertaken recently showed that when compared to other regulatory bodies, the cost of processing a complaint through the REAA is five to 24 times more expensive. In fact one organisation is able to process its complaints up to 72 times cheaper than the REAA.

“The cost of processing a complaint through the REAA seems high. The economic climate has placed a huge strain on our industry. The REAA’s focus needs to be on managing costs rather than simply passing on more costs through further levy increases,” Mrs Meo says.

REINZ is encouraging all members to make submissions against the proposed increase in levies because the industry has not sufficiently recovered from the global economic recession and the industry wants the REAA to undertake a cost efficiency analysis of the complaints process prior to any increase.
Consultation with the industry began yesterday and runs until 31 October. As well as seeking submissions from the industry, the REAA is hosting two further industry meetings in Wellington and Christchurch this week.
Information on the meetings and how to make a submission can be found www.reinz.co.nz.

ENDS

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