Real estate industry gets a revamp

The public is about to get a fairer crack of the whip when it comes to real estate. Photo / Janna Dixon

A new system for sorting through consumer gripes will result in fewer official complaints against real estate agents, the industry watchdog says.

The Real Estate Agents Authority [REAA] receives about 150 calls a week from people unhappy about their dealings with realtors.

An average of 13 of those complaints go through the authority's formal investigation process.

Chief executive Keith Manch said he hoped a new "triage" system being launched in the next few weeks would get that number down to three or four.

Currently, the only alternative the watchdog has for resolving complaints is to refer them to a complaints assessment committee, triggering a full-scale investigation that often takes months.

But a lot of minor irritations - such as putting flyers in letterboxes with "no junkmail" signs on them or technical breaches such as not displaying their registration - could be dealt with by simply correcting the errant agent's behaviour, Manch said.

Equally, REAA hoped to act as a mediator to resolve disputes between agents and clients. Set up 18 months ago, the regulator was criticised in its early days for a backlog of hundreds of complaints. It has had to invest in additional resources to deal with the workload and raise agents' annual levies by 50 per cent.

"There have been a significant number of complaints compared to the nature of the system we're operating," Manch said. "It won't be sustainable over the longer term."

The current set-up was challenging to operate efficiently.

The complaints assessment committee had to be convened, the agent had to respond, then further investigations and meetings might be required, all of which took time.

Within the next six to eight weeks, REAA will initiate a system of case managers who will assess incoming complaints and put them into three categories:

Situations in which there had been no detriment to the client, the breach was not intentional and was a one-off, and there were no broader implications. In these cases, the agent involved would be contacted and made to rectify the mistake.

Disputes between parties in which the watchdog would act as a mediator to resolve the matter.

More serious matters that would be put through the official complaints process.

Manch said the aim was to "head the problems off at the pass. That's probably a more effective way of improving the industry."

Helen O'Sullivan, chief executive of the Real Estate Institute of New Zealand, welcomed the initiative, saying the three key concerns for agents were getting issues resolved in a timely manner and thereby building the public's confidence in the industry, and cost.

"If you send all these low-level complaints to the complaints assessment committee, it's expensive."

The downturn means

* There are 20 per cent fewer real estate agents than a year ago.

* Industry regulator the Real Estate Agents Authority says as at April 1 it had 13,902 active licensees on its books, 3000 fewer than at the same time 12 months ago.

* 3200 agents have voluntarily suspended their licences for the time being, twice as many as last year.

* Authority chief executive Keith Manch says the numbers are expected, given the downturn the property sector has undergone.