Agents in class to swot up on tougher new property laws
Queenstown realtors are trickling into the classroom to bone up on tougher regulations coming into force in November.
A seminar run by the Real Estate Institute of New Zealand in Cromwell early this month drew a dozen of the Wakatipu’s 114 active licensed agents.
The three-hour Risk Management 101 course cost $197 per person.
At the blackboard was Graham Crews, whose 20 years of realty education includes 15 years as senior lecturer running Massey University’s training programme for agency principals and managers.
“All good real estate agents need to go back to school for a little bit and just brush up on their knowledge,” Crews says.
“The law has changed quite considerably in recent times. We’re entering a new era for best-practice real estate agents.”
He’s mainly talking about the Real Estate Agents Act 2008 – launched with much ballyhoo by Labour’s Clayton Cosgrove last year – taking effect on November 17.
Main changes include greater disclosure, far more accountability and a no-cost complaints process permitting claims up to $40,000 against individuals or $100,000 against companies.
After public concerns about self-regulating REINZ being toothless, an independent Real Estate Agents Authority now takes the policeman role.
Crews: “The process for people [laying] a complaint is probably going to be a lot more straight
forward – there’s been a bit of an issue with that.”
Like employment law, complaints will first go through a dispute-resolution stage, followed by a formal hearing if not resolved.
Good agencies and salespeople have nothing to fear, Crews adds. But “you really should do this half-day course to make sure you’re fully aware of the changes in November”.
Individual salespeople will be held to account whereas only managers were previously, he says.
Managers and principals – or “supervising agents” as the latter are now called – must now keep close tabs on salespeople.
Crews: “I’d immediately have compliance training, monitoring of all marketing and advertising material to make sure there was nothing misleading, a compliance policy in place – and that policy tied into every staff member’s employment contract.”
Agents must make diary notes on every transaction and carry indemnity insurance.
Disclosure rules are also strengthened – especially on insider purchases, Crews says.
The law already requires agents proposing offers on behalf of partners or children to obtain the vendor’s written consent over conflict of interest – the agent must also pay for an independent valuation.
The new law widens the family circle to include offers from an agent’s parents, siblings, nephews, nieces – even grandchildren.
Rather than dishonest practices, Crews believes agents more often shoot themselves in the foot by shooting off their mouth too quickly – “when we’re under-informed, when we don’t know enough about a particular set of circumstances”.
“Sometimes we rush in where angels fear to tread.”
That could now be very costly. An entire firm could be brought down by the actions of a single agent, Crews warns.
On top of heavy fines, transgressions may more easily cop bad publicity.
Stressing he doesn’t know how the new regulatory authority will conduct hearings, “I don’t think they’ll be confidential.
“The agent who doesn’t heed the call [to learn the new law], even with the smallest mistake, risks a loss of reputation if they slip up.”