Agents on notice

Peter McDonald. Photo / Supplied

The outgoing president of the Real Estate Institute says the industry's new government watchdog is short of funds and will bump up the mandatory fee it charges agents.

The Real Estate Institute has restructured following the Government's decision to hand its regulatory responsibilities over to the new Real Estate Agents Authority.

It is now a voluntary industry body, and the REAA maintains the compulsory licensing system of all individual real estate agents.

REINZ announced a new board last week with high profile company director Roseanne Meo as chairman. The present council and national president Peter McDonald have stepped aside.

In his last email to institute members McDonald said the REAA "appears to be having some problems. It would appear that the $500 membership fee falls well short of what is required to run the authority and of course it will be us, as licensees, who will be asked to foot the bill."

The problems were the fault of poor legislation, and it was all the more reason to maintain a strong industry voice through the REINZ, he said.

"The need for that voice may be just around the corner as our industry will surely be faced with a round of new levies."

Chairwoman of the REAA Kristy McDonald said the level of complaints to the new authority from property buyers and sellers had been "significantly higher than anticipated".

So far it had been able to respond to these within its budget. "If the current level of complaints continues, the authority will review how it will manage the complaints and associated investigation processes in future years," she said.

It would be working on this over the next few months and would consult the industry about any levy increase, she said.

REINZ said in a statement Peter McDonald's comments were his personal views, and there had been no discussion with REAA about an increase in fees.

Chief executive of Harcourts New Zealand Hayden Duncan said talk of fee increases was speculation.

"When implementing the [Real Estate Agents] Act the Government used a robust process to set the levies at a level they felt was reasonable to cover the REAA's operational costs, and we have not had any communication to the effect that they feel there has been a miscalculation."

He said there were typically higher costs when an organisation was being established and it was expected that these would level out.