Agents oppose levy hike

Euon Murrell and Allison Lawson of Reinz with huge number of submissions from agents. Photo / Supplied

The Real Estate Agents Authority has received more than 4700 submissions from real estate agents opposed to its plan to increase fees by more than 50 per cent.

Agents are also calling for a working group to review the legislation governing their industry, saying it has glaring omissions and is giving rise to a huge number of unnecessary complaints.

REAA was set up by the Government last year to take over licensing and regulation of estate agents from their industry body, the Real Estate Institute of New Zealand (REINZ).

REAA has proposed increasing the annual levy that agents must pay from $495 to $760, following a higher-than-expected load of consumer complaints. Submissions on the proposed hike closed last week.

REINZ chairwoman Rosanne Meo said while agents supported the establishment of a regulatory body, "we cannot support a significantly large increase in levies being imposed on an already stressed industry".

Residential property sales in September were at their lowest for a decade, REINZ said. "With continued reductions in property sales, we wonder why [REAA] needs an increased level of funding," it said.

The body has also questioned whether the rise was to offset a shortfall of income due to a decline in the number of licencees. The timing and the quantum of the increase would lead to increased costs for consumers, it said.

It wants a joint technical working group of itself, REAA and a consumer advocate to look at amending the Real Estate Agents Act 2008.

REAA had received 743 complaints against agents since it was set up, the body said. Of the 187 that had been determined, 85 per cent had resulted in no further action. "This raises issues about whether the current act is fit for purpose."

Parts of the industry such as property managers were also not covered by the act, which left consumers exposed.

Reaa chairwoman Kristy McDonald said many of the submissions from agents called for the introduction of a complaints fee to prevent vexatious complaints.

She noted that the authority had not received any submissions from consumers.

She disputed the Reinz claim that complaints against agents had levelled off. REAA had received 14 complaints a week on average since it launched.

"This average does not appear to be significantly increasing or declining."

She said little was known about licencee numbers before it was set up. There are 17,000 licenced agents, which was the amount it had expected.

On criticism about the time it was taking to decide if complaints had merit, McDonald said it was taking about 90 days to get to a decision by the Complaints Assessment Committee.

The agent

A former South Island business broker says he had to endure six months on tenterhooks before finally being told a complaint against him had no merit.

The broker, who now lives in Australia and does not wish to be identified, listed a guest house business for sale in October last year.

The vendor was anxious to sell. The broker approached a buyer he knew and a deal was negotiated subject to due diligence - a standard condition, he says.

However, after looking at the books the buyer decided that the business wasn't making enough to service the loan they would need, and the deal fell through.

The vendor was gutted, the broker says.

"But the reality is if the business is not viable, it's not viable."

The vendor complained to REAA in March and made no bones about putting the word around the industry, he says.

The broker sent back a detailed response within a week, including written evidence from the buyer's solicitor.

From there, he was kept in the dark. "I never got the opportunity to comment on any other submissions."

After persistent emails he was finally notified in September that the complaint was not being taken further.

"Anyone with half a brain would have looked at the complaint when it came in and made two phone calls.

"But instead they spent months chasing their tail; what they did I do not know.

"This whole process was just a total waste of time and money."

The client

Solicitor John Turrall is still waiting for a resolution to his complaint about misallocated body corporate funds - two years after first approaching the real estate industry body.

Turrall told REINZ in October 2008 that funds from his family trust had been misspent by the licensed real estate agent looking after the body corporate at his North Shore offices. There was a hearing, and then nothing, he said.

REINZ asked if he wanted the matter passed on to the new Real Estate Agents Authority (REAA), launched in November last year. He agreed.

The first and last he heard from REAA was in July. He expressed disappointment at being given 10 days to reply when the matter had been ongoing for more than 18 months.

Turrall has heard nothing more. "They haven't dealt with it since then. It's become a bit of a joke."

It is unclear whether the money has been reimbursed but it shouldn't have been used in the first place, he says. "The fact is, we don't know."


This story has been corrected from an earlier version. The fees increase is more than 50 per cent, not 'nearly 50 per cent.'