KEY POINTS:
Rogue real estate agents can expect hefty penalties for breaking rules and their industry will likely lose its right to self-regulation under a tough new law to be announced today.
Associate Justice Minister Clayton Cosgrove is to reveal details of the legislation, designed to bring higher standards of consumer protection and harsher penalties for errant agents.
Plans for an independent consumer watchdog could also be unveiled.
A Government proposal for revamping the sector - published by the Justice Ministry in May - recommended a new regulatory body, the Real Estate Agents Authority, to monitor the licensing system.
It would be independent from the industry, and its members, including sector representatives, would be appointed by the Minister of Justice.
But Mr Cosgrove said agents would have to pay for their new "guard dog".
The discussion paper proposed licensing fees and levies.
It said the new authority would be in charge of licensing agents, handling complaints and disciplinary functions and upholding standards through compulsory training and education.
It would also hand out stiff penalties for agents who broke the law.
Mr Cosgrove said "major concerns" had been raised by the public over how the industry dealt with complaints and disciplinary matters.
"A minority in the industry have been found to have caused great financial hardship and anguish for some consumers."
For 30 years the Real Estate Institute of New Zealand had had "the privilege of self-regulation and acts as the gatekeeper for complaints".
"The industry is seen by many as a closed shop, and that is not good enough for the 21st century."
