KEY POINTS:
A Government minister has slammed the Real Estate Institute for taking action against a low-commission agency while customer complaints against its members go unheeded.
Associate Justice Minister Clayton Cosgrove yesterday described an institute disciplinary proceeding against industry newcomers The Joneses as "bizarre and Keystone Kops stuff".
The hearing was instigated after Dunedin-based real estate agents took exception to comments made by the year-old company.
The Joneses was hauled before the institute in Auckland yesterday, to answer charges of failing to act in accordance with agency practices and of criticising other agents publicly.
But Mr Cosgrove said "senior" institute leaders were "completely out of touch" in convening the hearing, the result of which is expected to be released in the next few days.
The institute would be better off "chasing down" dishonest and fraudulent members who had stolen hundreds of thousands from consumers.
The Joneses founder Chris Taylor said the allegations were made after he claimed New Zealanders paid too much when selling their houses, and received "relatively indifferent service" for the price.
The Joneses - which has branches in the four main centres - charges a flat $7995 commission, including GST, compared to an industry average of $15,000.
Mr Taylor said he was left "a little bemused" by the hearing, especially as there were "a lot of aggrieved consumers out there", and could only speculate on the motivation behind the Dunedin complaints.
"It's pretty tough times at the moment. There's a lot of agents who are not selling a lot."
Mr Taylor said he rejected the charges "categorically", as they were only reflecting the views of consumers and the findings of industry research.
The institute's disciplinary committee reserved its decision.
Mr Cosgrove has already flagged his intention to bring "accountability and transparency" to the real estate industry.
In May, he released the Government's Preferred Options for Reform of the Real Estate Agents Act 1976, which raised proposals to change the licensing, complaints and disciplinary system for agents.
He told the Herald yesterday he was "very close" to presenting papers to the Cabinet, and news of The Joneses hearing had "galvanised my resolve" to see new legislation.
Ministry figures show that of more than 500 complaints to the Real Estate Institute in the past three years, only nine cases have been referred to the licensing board.
New legislation will likely see an independent authority to watch over the industry and deal with complaints.
But REINZ national president Murray Cleland said the institute was only following its legal obligations by sending The Joneses to a hearing.
"The Real Estate Institute of New Zealand is responsible for enforcing the institute's code of ethics.
"All of our members are familiar with the code and know that they risk censure for breaking it," he said.
The Joneses' lower fees - often as much as half that of other agents - have caused a stir in the industry, but Mr Cleland yesterday rejected a suggestion the complaint against the company was malicious.
"That has got nothing to do with it whatsoever. We have got companies who operate on one per cent ... "
Mr Taylor was not ruling out a conspiracy, however.
"I guess we haven't earned too many friends in the industry ... This industry has been left to its own devices for a long time."
Industry commissions had doubled in the past five years, he said.
"I guess you have to draw your own conclusions."
Mr Cosgrove would not comment directly on what he thought was the motivation for the complaint.
He said it was "interesting" a number of people had raised that issue with him, and was further proof the industry needed to be administered by an independent entity.
Mr Taylor said new legislation curbing the powers of the institute would help resolve "major structural issues" within the industry.
"All we seek is transparency, really."
KEEPING UP WITH THE JONESES
Fees on the sale of a $400,000 house:
THE JONESES
$7995 includes:
* GST
* Open homes
* Professional representation
* Organised advertising (vendor covers cost of print advertising)
* Website listing
* Guided tours with voiceover (website)
* 70-hour per week call-centre assistance
* Agents available seven days
OTHER AGENTS
About $16,312.50 (general guideline figures) includes:
* Administration fee
* 4 per cent commission of first $300,000
* 2 per cent commission on the balance
* GST
* Open homes
* Professional representation
* Organised advertising (vendor covers cost of print advertising)
* Website listing
* Agents available seven days
