Real Estates clean up

The Northland real estate industry enters a brave new world of industry regulation tomorrow, with 200 fewer licensed salespersons than there were before recession kicked in two years ago.
Numbers dropped from 821 in October 2007, to 702 in October 2008, to 636 at the end of last month. And some say the stringent requirements of the Real Estate Agents Act 2008 - which becomes effective tomorrow - may see more leaving the industry. The new act, which  reforms the way the real estate industry is regulated, was developed in response to concerns from  consumers and industry members about the effectiveness of the 33-year-old regulatory
regime  in the Real Estate Agents Act 1976. Stated aim of the Real Estate Agents Act 2008: to protect the interests of consumers and promote public confidence in the performance of real estate agency work.
Everyone seems to agree  the law regulating the industry needed to be updated and improved, but some think the new act is over the top. They expected renovation;  it delivered revolution.
One Northland salesperson describes it as "hitting a gnat with a sledgehammer". Fines for misconduct have been bumped up from the hundreds to the thousands of dollars, and every development in a sales process has to be tracked, recorded and communicated to clients (under the act, the new word for vendors) and customers (the new word for  buyers). All listings  must be given weekly progress reports.
Out: the regulatory functions of the Real Estate Institute of New Zealand and the Real Estate Agents Licensing Board.
In: two new entities - the Real Estate Agents Authority, which will be a Crown entity, and the Real Estate Agents Disciplinary Tribunal. The tribunal will be independent of the authority and have administrative support from the Ministry of Justice.
The authority's duties include administering the licensing regime for RE agents, branch managers and salespersons using the new Code of Professional Conduct and Client Care as a reference point for discipline.
The authority will also appoint complaints assessment committees to investigate and consider complaints against licensees.
There are three categories of licence: agent, branch manager  and salesperson. It is an offence to operate without a licence or employ someone who is not licensed.
Salespersons must be supervised by either an agent or a branch manager and cannot draw up a sale and purchase agreement until they have had six months experience. All licensees must produce their licence on request.
The bar has been  raised for entering and serving  in the industry. That includes training and supervision and standards relating to being a "fit and proper" person for the job - people with convictions need not apply. A two-tier disciplinary system  is in place.
The Real Estate Agents Authority will refer all cases of alleged misconduct to complaints assessment committees (CACs). CACs must keep the complainant and the person being complained about informed of progress. They can rule on cases of "unsatisfactory conduct" and impose a wide range of sanctions from requiring an apology to imposing a fine of up to $10,000 on an individual or up to $20,000 on a company.
The big "sledgehammer" is the Disciplinary Tribunal, where CACs refer cases of alleged misconduct.
The tribunal has the power to suspend or cancel a licence and award compensation of up to $100,000. The tribunal will hear appeals against CAC decisions; its own decisions can be appealed in the High Court.
Authority chairwoman Kirsty McDonald QC (the legislation requires the  head to be a lawyer) says the new Professional Conduct and Client Care Code, the authority's reference point for discipline, was developed in consultation with the industry and based on best practice in occupation regulation.
"The code provides clear expectations on professional and ethical conduct by all agents, branch managers and sales persons when dealing with consumers.
"It includes standards of professional competence and conduct such as the requirement to act in good faith and deal fairly with all parties, and details the expectation that those holding a real estate licence will act in the best interests of consumers."