Real estate agents to MPs: Sledgehammer approach to non-existent problem

Counsel for the Real Estate Institute of NZ Kieran Raftery, QC, told Parliament's justice select committee the current regime already had enough muscle to deter bad behaviour. Photo / File

Awarding up to $100,000 in damages to victims of a real estate agent's poor behaviour would be taking a sledgehammer to something that isn't broken, real estate agents say.

Parliament is considering the Courts Matters & Tribunals Powers and Procedures Legislation Bill, which includes a raft of proposals to make the courts and tribunal systems more efficient.

One of the proposals is to revamp the system for lodging complaints against real estate agents, which currently distinguishes between lower level behaviour and higher level professional misconduct. The latter is considered by the Real Estate Agents Disciplinary Tribunal, the former by a complaints assessment committee.

The committee can censure an agent in a range of ways, including ordering an apology and further training, and fining an agent $10,000, or a company $20,000.

The Justice Ministry is proposing to give greater power to committees, including the ability to award damages up to $100,000. But the Real Estate Institute of NZ, representing more than 14,000 real estate professionals, is bitterly opposed.

Counsel for the institute Kieran Raftery, QC, told Parliament's Justice Select Committee on Thursday that the current regime already had enough muscle to deter bad behaviour.

"Most people value their professional reputation. The fact we have declining numbers [of complaints] over the last few years suggest that the message is already getting out.

"You don't need this sledgehammer in order to get that message across."

Raftery said the change would effectively erase the distinction between unsatisfactory conduct, when an agent falls short of standards, and misconduct, when someone has acted disgracefully, negligibly or incompetently.

There was no evidence that "consumers are losing out because the power to award damages is not there at the committee level".

"If the system is working and isn't broken, what are we trying to fix?"

Raftery said the change could also see an increase in complaints because of the lure of a possible $100,000 windfall, though he did not expect a huge increase.

"It's a bit like the civil litigation equivalent of a get-out-of-jail free card. The litigant has no factor to consider such as the costs it might involve, because it's all for free. If you can have damages up to $100,000, why not go for it?"

The institute's chief legal officer, Lisa Gerrard, said less than 1 per cent of real estate agents were guilty of misconduct or unsatisfactory conduct annually, and less than 1 per cent of property transactions result in a complaint.

The Real Estate Agents Authority, which regulates the industry, supported allowing committees the ability to award damages for unsatisfactory conduct - but wanted it capped at $30,000.

Meanwhile Human Rights Review Tribunal chair Rodger Haines, QC, told the committee he was "strongly opposed" to proposed changes.

In his written submission, Haines said the tribunal was denying justice to people because of the "egregious" delays in hearing and deciding cases; new cases had shot up from 38 in 2014 to 93 in 2016.

Cases are heard by the chair and two members of the human rights panel, who are appointed by ministers, but the proposed legislation would allow Haines to delegate his power to panel members.

Haines said this would turn the panel into a pool of chairpersons, which would be wrong in principle and contrary to the intented function of the panel.

The Justice Committee is expected to report back on the bills at the end of the month.