The Government is going to overhaul legislation covering real estate agents and says the current "closed shop" investigation of complaints is not good enough.
Associate Justice Minister Clayton Cosgrove announced the overhaul today and said there had to be better accountability and transparency within the industry.
He said
major concerns had been raised by the public, and real estate agents themselves, about how the industry dealt with complaints and discipline matters.
"The REINZ (Real Estate Institute of New Zealand) is the gatekeeper for complaints and it decides how complaints are handled," he said.
"Most complaints are handled in-house and are seldom brought before the Real Estate Agents' Licensing Board which can impose more serious penalties.
"Basically it is a closed shop, and that is not good enough given that we are talking about what is for many New Zealanders their greatest asset."
Mr Cosgrove said that under the current Act the Licensing Board had the ability to impose serious penalties for misconduct, including suspending or cancelling registration of agents and selespeople -- but only when cases were referred to it by the REINZ.
This seldom happened, and the most likely outcome was a small fine or a reprimand.
"The freedom to self-regulate granted by the current legislation is now perceived as industry protectionism rather than consumer protection," Mr Cosgrove said.
Mr Cosgrove said that in 2004 REINZ received 132 complaints but none were referred to the Licensing Board, and in 2005 only seven of the 163 complaints it received were referred.
There were long delays in processing complaints and allegations of poor quality investigations.
Mr Cosgrove said he expected any new regulatory regime would be funded by the industry.
Details of proposed reforms will be released for public comment and a bill is likely to be introduced to Parliament later this year.
In October last year Mr Cosgrove invited the industry to come up with its own plan to improve its complaints system, but he was not satisfied with the outcome.
The Licensing Board has the power to suspend or cancel registration and impose fines of up to $5000 on agents.
The REINZ sub-committee which handles most complaints can only impose a maximum fine of $750.
The industry's code of ethics stops agents expressing concerns publicly because it states "members shall never publicly criticise fellow members".
- NZPA
