KEY POINTS:
In a little over a year, house buyers and sellers ripped off by real estate agents will be able to get up to $100,000 compensation.
Currently they are eligible for nothing and agents are fined a maximum of $750.
Instead of relying on the agents' own organisation -
the Real Estate Institute - to investigate complaints, consumers will be able to go to a new crown agency with grievances.
Associate Justice Minister Clayton Cosgrove said the new system was a big change. "The current in-house complaints and discipline system will be replaced by an independent Real Estate Agents Authority that, unlike its predecessor, will deal with complaints quickly and effectively.
"It will not cost consumers anything to lodge a complaint and they will not be required to hire lawyers because the authority will represent their case if it is referred to the disciplinary tribunal."
REINZ opposed what it called a "scorched earth" approach, saying the system would be hugely expensive and might push up house prices.
After about January 2010, people cheated by an agent may not have to lift a finger. The new crown authority will be able to investigate an agent without a complaint even being laid.
Consumers will also be able to find out far more about agents too. The new law establishes a public register of agents and salespeople to record breaches of industry standards.
The legislation that brings in the changes, passed by Parliament on Thursday, will change a sector that sells about 50,000 houses a year.
Agents will not be required to be REINZ members. Consumers can expect agents to know more too, with compulsory training requirements for licensees a part of the new law.
Nor will vendors be locked into long contracts.
The new law will improve conduct standards required in the running of a real estate agency business and demand mandatory disclosure on possible conflicts of interest.
REINZ lobbied hard against the legislation and said: "The bill lacks consistency. It seeks to establish stronger regulation and consumer protection, yet exposes thousands of people to new risk through its failure to include property management and residential letting and leasing within the new regulatory framework."
Heavy fines:
The new law ushers in big penalties:
Agents can be fined up to $40,000.
Companies can be fined up to $100,000.
At present, the maximums are just $750 and $5000.
Offences that will draw these big new fines:
Having no licence to operate.
Employing unlicensed agents.
Giving false or misleading information.
Failing to disclose conflict of interest.
Rendering false accounts.