Legislation highlights need for professional managers

Ian Campbell says managers will need to be authorised financial advisers. Photo / Supplied

The importance of building owners using professionally trained property managers cannot be over-stressed, particularly with upcoming legislation that will impact heavily on the commercial property industry, says Ian Campbell, president of the Property Institute of New Zealand (PINZ).

The institute plays a leadership role in educating its 2600 members and promoting their services to the public.

"Properties in good locations that are professionally managed, well maintained and retain their tenants are the best placed to successfully weather the recession," Campbell says.

"PINZ is keen to ensure that building owners and occupiers understand the true benefits which a professionally trained property manager can make - particularly when recent changes in related legislation are made known and reaffirmed through ongoing education."

Campbell says managers and owners should be aware of two new pieces of legislation passed in September 2008 that will affect many property managers, property consultants and property analysts.

The Financial Advisers Act 2008 and the Financial Service Providers Registration and Dispute Resolution Act 2008 are expected to come into force by mid to late 2010.

"Changes brought about by this legislation are significant and are being communicated to members within the Property Institute and around the property industry," Campbell says.

"Under the new legislation, property managers who receive rent or payments from tenants on behalf of landlords will need to become authorised financial advisers.

"This includes a situation where a property manager makes a recommendation or gives an opinion or guidance in relation to buying, letting or selling of land. Under the new act, a property manager will need to apply to the Securities Commission to become an authorised financial adviser."

Registration is under the Financial Service Providers Registration and Dispute Resolution Act.

Authorised financial advisers will also need to become registered and comply with ongoing disclosure and conduct requirements.

Conduct and training requirements will be set out in a code being developed by the Securities Commission.

Members of the Property Institute who are active property managers or advisers will need to become authorised financial advisers.

Under the act, there is an exemption for real estate agents and registered valuers as they are not required to become authorised financial advisers if they only give advice, or undertake a transaction which is a necessary incident of working as a real estate agent or a registered valuer.

Campbell says property managers, advisers, owners and occupants should be mindful of these changes.

Owners and occupiers need to review the qualifications, diligence and skills of persons managing their properties, the impact of the Financial Advisers Act 2008 and how their property managers intend to apply legislative changes over the next year.

The Property Institute of New Zealand is communicating to its members the requirements of the act and offering guidance as advised by the Securities Commission.

The Property Institute offers its members a continuing professional development education programme, nationally through the internet or at main centres using its 16 provincial branch network.

The education programme is also available to others and is updated to incorporate ongoing legislative and other industry changes.

"This benefits an individual's performance, rewards the employer, owners, occupants, the public and the property industry in general," Campbell says.

"Good education makes for good professional managers. In turn, good managers know what value they can make by ensuring the property they are responsible for is well maintained, has up-to-date leases and tenancy records, a current building warrant of fitness with current service agreements and is code compliant."

Campbell says good property managers are often appreciated by owners when their property is held long term or made ready for sale.

"Similarly, tenants also appreciate it when the property they occupy is well maintained, compliant and professionally run," Campbell says.

"For most occupants in commercial buildings or retail centres, high standards of professional care and attention to a property reflect the same high standards and care they portray to their own customers.

"When tenants are not happy, they simply move on.

"For the property owner, departing tenants create vacancies and without replacement tenants at hand, cashflow and return is immediately impacted."

Campbell says it's important professionally trained managers stay informed and implement, when necessary, changes in related legislation.