New system to deal with estate agent squabbles

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The Real Estate Institute has launched an internal disputes mechanism in a bid to quell an 'alarming increase' in the number of consumers who are being dragged into squabbles involving real estate agent commissions.

The disputes resolution system will replace a similar scheme which was in place under the old Real Estate Agents Act, but which was dropped when the new act came into force.

REINZ chief executive Helen O'Sullivan said the Real Estate Agents Act 2008 offered no corresponding system to manage disputes between agents about commission, prompting an alarming increase in the number of consumers being dragged into disputes.

O'Sullivan said real estate industry watchdog the Real Estate Agents Authority was bearing the brunt of some complaints where more than one agent felt they were entitled to a cut on a commission of a house sale.

The REAA told members in a newsletter that it had received a number of complaints regarding agents' commissions, but indicated the authority might not always be the best vehicle to deal with this.

"If a commission dispute with another licensee raises an issue of misconduct, you have a duty to report that misconduct to the authority under the Real Estate Agents Act."

"However, if a commission dispute does not raise an issue of misconduct, it may be more appropriate for the dispute to be dealt with by the disputes tribunal," REAA chief executive Keith Manch said.

As of today, the authority said that it had closed 45 complaints concerning commission dispute - 17 of which were made by licensees.

O'Sullivan said the new system, much like the old one - encouraged agents who felt they had claim to a commission to "fight it out between themselves".

"We have developed a process that looks very much like the old process where we ask our members to come to us and have a panel of mediators to help them resolve their dispute," she said.