Kristy McDonald: New real estate body aims to lift professionalism

Real estate licensees are involved in what is usually the biggest financial outlay of a person's life. Photo / Martin Sykes

Professionalism and consumer protection provide the focus for the Real Estate Agents Authority, which was launched last week. It heralds a new environment of accountability for the industry.

Professionalism implies a high level of competence, clear and good communication, honesty, integrity and accountability. Enhanced professionalism in the real estate industry will bring it in line with what is required of other more traditional occupations.

Buying or selling a house is the biggest expense many of us will ever undertake and it is crucial that vendors and buyers have complete trust in the industry and the process. People's livelihoods are at stake.

The team at the authority is very excited about the future and the changes it brings bode very well for consumers and those working in the real estate industry alike.

The authority is established under the Real Estate Agents Act 2008. The main goals of the act are to provide consumer protection, to raise industry standards and to raise public confidence in the performance of real estate agency work.

The act will achieve its goals through a range of measures including licensing, an independent and transparent complaints process, a compulsory code of conduct, required consumer information, and some exciting prospects for continuing education.

In ensuring compliance with the act's requirements, the authority brings independence, openness and transparency to the regulation of the real estate industry.

There is now individual licensing of those working in the industry. All licensees will have met the required qualification standard, and their names will be recorded on a publicly accessible register.

Being on that register provides an assurance to the public that the person they are dealing with is subject to the provisions of the act.

Consumers will be able to check whether a person is licensed and whether they have been subject to any recent disciplinary action.

The authority has an important role in helping to protect consumers by providing information to assist them with buying and selling property. The authority's guides, which must be given to consumers by their licensee (licensed real estate agent, salesperson or branch manager) will help them assess their options and make informed decisions.

The act also creates an independent, transparent process for complaints. Consumers can be assured that when something does go wrong there is an effective process that is easy to access.

The new complaints and discipline processes provide a range of sanctions available to the newly established Complaints Assessment Committees when they find a licensee guilty of unsatisfactory conduct.

These sanctions focus on putting things right for the consumer and re-educating the licensee, but fines can be imposed in appropriate circumstances .

For the more serious matters, the complaints committees will lay a charge before the Real Estate Agents Disciplinary Tribunal, and that charge will be prosecuted on behalf of the consumer by the committees.

The authority has developed a Code of Professional Conduct and Client Care. This is a compulsory code that has the force of law. It is the benchmark by which standards of conduct are measured.

Professionals must be lifelong learners and this especially applies to the real estate industry as licensees are involved in what is usually the biggest financial outlay of a person's life.

The act provides an opportunity to set appropriate standards for continuing education and updating current knowledge. Continuing education is not about entry standards, but maintaining and improving standards of practice.

We have yet to consider these issues fully, but there are exciting possibilities, and the board will be working toward educationally sound solutions.

Feedback from the industry has been positive. There is a willingness to work with the authority to raise professional standards and improve public confidence in the industry.

I mentioned that clear and good communication is an essential quality of professionalism. It is also an essential quality of good governance, and therefore will be a feature of the way this authority will operate. We are here to ensure the objects of the act are met, and we will communicate directly and in plain English.

We have a board that represents a range of experience and interests. Members of the board have legal experience including commercial and property law, two members have industry experience, and we have valuable skills in the areas of consumer protection, banking and finance, and risk management.

The board has made some important decisions for the future of the authority. We have appointed staff, including a chief executive, set the fees and levies, and drafted key publications such as the Code of Professional Conduct and Client Care, consumer guides and other consumer information. Still to come is careful consideration of the rules around continuing education for licensees.

This is the beginning of a new Crown agency, a new way of working with the real estate industry and new protections for consumers. My expectation is that we will develop a model Crown agency; one that will be the template for future regulatory bodies.

Kristy McDonald, QC, is chairwoman of the Real Estate Agents Authority.