They oversee properties worth about $40 billion and administer $2 billion of funds annually. But who's managing our largely unregulated residential property managers?

Dame Rosanne Meo is worried: while real estate agents are under the law's thumb, most property managers are not, and she -- and many others -- believes that needs to change, to deal with some serious issues.

The chairperson of the Real Estate Institute has spent years lobbying to get the law changed, because although property managers within a licensed agency are regulated under the Real Estate Agents Act, those outside are not.

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So far, all her efforts have been unsuccessful, despite appeals to three Associate Justice Ministers: Nathan Guy in 2011, Chester Borrows in 2013 and Simon Bridges last year.

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"There is no legal requirement on property managers to hold client monies in a trust account," Meo says, fearing the effects of a business failure and the resulting fallout for landlords and tenants.

• Guy told Meo of a "comprehensive review of the regulation of managers in 2009. Cabinet noted that problems experienced by property owners who use property management services do not give rise to a sufficient risk of significant harm to justify regulatory intervention."

• Borrows told Meo: "This Government takes the view that regulation should only be used when there is a clear need for it."

• Bridges told Meo: "The Government remains committed to the principle that an occupation should only be regulated when it is necessary to reduce the risk of significant harm and the industry or market is unable to regulate itself adequately."

Meo's concerns include lack of regulation for trust account money, inadequate or no professional indemnity insurance, no screening for property managers and no dispute resolution processes.

Body corporate managers administer properties for owners. Their roles can include collecting money to pay insurance, rates, bills and levies, managing repairs and maintenance, collecting rent and selecting tenants.

Had the same facts arisen in the context of a solicitor's trust account, the inevitable result would have been an inspection of the trust account by the New Zealand Law Society, probably followed by disciplinary action.

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Meo's concerns are shared by others: Body Corporate Chairs' Group national president Neil Cooper, Auckland Body Corporate Chairs' Group branch chairwoman Lyn Gillingham, Auckland District Law Society property law committee member Liza Fry-Irvine, Home Owners & Buyers Association president John Gray, Property 101 Group director Joanne Barreto, Auckland accountant and body corporate chairman Brent Murdoch, North Shore lawyer and former local board member Nick Kearney and Consumer magazine.

Fears about the safety of funds under management, estimated to be about $2 billion, and the way managers oversee about $40 billion worth of properties are central to their concerns.

Brent Williams, managing director of Strata Title Administration -- which manages 400 properties and has trust funds of $10 million to $20 million -- shares concerns about the sector generally and wants an ombudsman-type system established.

Tenancy Tribunal adjudicator Brian Stephenson expressed concern when he ruled on 19 claims in a property management case involving Auckland's Heritage Hotel and City Life building, questioning the body corporate system and unit title owners' lack of redress to an official authority.

"Had the same facts arisen in the context of a solicitor's trust account, the inevitable result would have been an inspection of the trust account by the New Zealand Law Society, probably followed by disciplinary action," he wrote in that case.

However the Ministry of Business, Innovation and Employment has rejected calls for regulation, saying a 2009 Ministry of Justice review found no new rules were necessary.

An overhaul of the Unit Titles Act is what's really needed to set standards so managers have to abide by the law.

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Amid all this, some managers have taken it upon themselves to impose a certain level of regulation.

For example, Body Corporate Services of Auckland has become an approved practice entity of Chartered Accountants Australia and New Zealand. Managing director Garth Freeman says this was a voluntary position which illustrates the firm's professionalism and gave clients confidence in practices and procedures.

As well, the new Auckland branch of the Body Corporate Chairs' Group is holding meetings to give property owners more information. However, that organisation is for owners, not managers.

And property manager Joanne Barreto, of Auckland's Property 101 Group, wants managers to join Australia's national property management organisation, Strata Title Administration. She has called a meeting of property managers on November 25.

But Gillingham opposes Kiwi managers joining Australia's Strata Tile Administration.

"There's no point," she says. "There would be no teeth. Strata would have no ability to enforce its standards or rules on this side of the Tasman."

Gillingham also rejects the ombudsman proposal.

"An overhaul of the Unit Titles Act is what's really needed to set standards so managers have to abide by the law," she says.

Cooper says body corporate managers now oversee properties worth about $40 billion, with annual levies of some $1 billion and a further $1 billion in annual long-term maintenance funds and term deposits.

His Body Corporate Chairs' Group represents about 17,000 property owners, and he says that in the next 10 years the industry could grow to the point where about 6000 body corporates would cover about 200,000 titles in Auckland alone, many of them apartments.

What happens then, he asks, if the sector remains as unregulated as it is today?

Getting organised

• The Auckland branch of the Body Corporate Chairs' Group meets at the Commerce Club, Ohinerau St, Remuera, 5pm Tuesday, November 17. Contact: auckland.chair@bccg.org.nz

• Joanne Barreto of Property 101 Group is calling managers to a meeting in central Auckland at 11am on Wednesday, November 25. Contact: joanne@prop101.co.nz for registration and venue details