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The Real Estate Institute's former consumer chief has accused the organisation of betraying consumers and abandoning people in favour of profit.
Gordon Meyer, a lawyer and Reinz's former professional standards manager earlier this decade, said yesterday that the institute was abdicating its regulatory responsibility, saying agents could cause consumers huge losses when they broke the law.
Mr Meyer handled complaints for Reinz, but has become a whistle-blower, saying that instead of focusing on people, the organisation that estate agents must belong to had become intent on making money.
Mr Meyer, who held his Reinz role from 2000 to 2004, yesterday presented a submission to Parliament's justice and electoral select committee, which was sitting in Auckland.
The Government wants to reform the Real Estate Agents Act, a law dating back to 1976 that governs property transactions. More than 800 submissions have been made on the bill - many from real estate agents - meaning MPs have had to work overtime to hear from all parties.
Mr Meyer was scathing about Reinz, accusing it of being keener on money than it was on fulfilling its legal obligations, which were basically to protect consumers.
Various Reinz national councils had "betrayed" efforts for the organisation to be the prime regulator of the real estate industry, he said. Reinz had "deliberately under-resourced its consumer complaints procedures", which relied on a network of voluntary committee members.
"When I assumed my role in July 2000, I did not even have a typist to assist me," Mr Meyer said.
Reinz went down the path of transforming itself into a money-making entity, investing $6-8 million in a property advertising website, Realenz (now realestate.co.nz), which members still did not own. It amended its constitution in the 1980s to enable it to engage in commercial activities.
It was highly questionable whether a body such as Reinz should be able to compulsorily acquire funds from its member agents and then put that money at risk on commercial activities, he said. Its primary purpose was regulatory in nature.
Reinz embarked on a branding campaign in 1999 that cost around $500,000, yet it "failed to take serious steps to amend the law to increase fines against agents".
Mr Meyer said he agreed with Associate Justice Minister Clayton Cosgrove that an overhaul of the law was urgently needed. But he called for some changes to the proposed new law, saying Reinz still had a role to play.
Reinz wants the bill changed significantly, criticising it for lacking consistency, balance and not meeting the Government's reform objectives.
Reinz president Murray Cleland took issue with Mr Meyer's criticism, saying profit was never put before people. He said Mr Meyer was bitter and did not realise that realestate.co.nz was a huge success, with every major agency involved.
Reinz had tried to handle complaints fast and Mr Meyer was part of that, so Mr Cleland said he was at a loss to understand the attack.
* SUBMISSIONS
Lawyer Gordon Meyer also:
Called for retention of the real estate agents' fidelity fund.
Said three major claims were made on the fund - for failed property management firms.
