Editorial: Real estate renovation

OPINION: Tuesday's The Dominion Post carried an advertisement that, even a year ago, would have made most real estate agents splutter and former associate justice minister Clayton Cosgrove shake his head in disbelief.

Inserted by Bayleys, one of the bigger real estate firms, it began: "Our support of the new Real Estate Agents Act is like a good offer. Totally unconditional." It went on: "Bayleys applauds any move that makes our profession more transparent and more accountable ..."

Tuesday was the day when changes to the real estate industry wholly took effect. The Real Estate Agents Act 2008 has come into force despite initial disbelief from within that Mr Cosgrove genuinely meant to rewrite the law, to make the consumer the industry's pivot.

The Real Estate Institute – based in Auckland and quite politically naive – spent large sums in a rearguard action when it finally realised that Mr Cosgrove, then the assistant justice minister, was serious, but to no avail. It, for example, is now no more than a voluntary union, no longer a body to which agents must belong.

Mr Cosgrove's motivation was scarcely altruistic: he saw that rewriting real estate law, after he latched on to several high-profile cases in which agents acted less than professionally, would give him a profile within the Labour caucus that suited his ambition. Despite his over-the-top invective along the way, he has had his wish.

The new Real Estate Agents Authority is in place. Chaired by Kristy McDonald, QC, it reported this week that, within its first two days, it had received more than 900 calls, and maybe 15 complaints, which the new disciplinary tribunal, headed by a retired district court judge, might get to consider.

Before the new law was wholly in place, and under legislation that was 32 years old, complaints were handled in-house by what, to many outside observers anyway, looked like an old boys' club, which, if it did decide to scold a colleague for behaving badly, could levy a maximum fine of only $750.

No more.

One of the other changes, and one that might have the most impact, is the new public register of real estate agents that the authority will manage. As Ms McDonald says, anyone will be able to check it to see if the agent they might use to sell their precious asset is licensed, or has been subject to any disciplinary process.

That opportunity might prevent today's home-buyers and sellers from falling foul of an agent such as Shaun Cosgrave, for example, who misled a Hamilton couple over a house sale that cost them $35,000. He was fined the $750 maximum.

Today, the maximums are $10,000 for an individual and $20,000 for a firm. If the new disciplinary tribunal is prepared – when appropriate – to impose fines of that magnitude, the public will be entitled to believe times truly have changed.

- © Fairfax NZ News