More security for buyers and sellers

For most New Zealanders buying (and selling) a house is a pretty painless exercise. This is thanks mainly to the estate agents who, for the most part, do a fine job of finding buyers for houses and houses for buyers, writes The Marlborough Express in an editorial.

Some people, though, do not have the same painless experience as most home buyers and sellers. This is because in the real estate industry, and many others where money is to be made, there are a few rogue operators whose methods sometimes leave a lot to be desired.

There are about 18,000 real estate agents in New Zealand. In Marlborough alone there are in the region of 150 real estate sales people. It's reported that the New Zealand housing marking is worth around $65 billion a year, with more than 100,000 properties changing hands each year, with estimated commissions on these sales exceeding $2.5 billion.

In the past complaints against real estate operators were handled in-house by the Real Estate Institute of New Zealand (REINZ).

On the back of a number of high profile cases, the Government earlier this year announced plans for legislation to rein in what it called "rogue" elements in the industry. Associate Justice Minister Clayton Cosgrove called for a full overhaul of existing laws covering the real estate industry.

Yesterday the Government announced sweeping changes to the industry, one of the most significant being the end to self regulation. In a sign that Government had no faith in the way the industry dealt with complaints, it has removed all industry regulatory functions from the REINZ and established a new independent complaints body. Mr Cosgrove says the industry has failed to deal with complaints about rogue agents in a transparent way and has been a closed shop for too long.

He says the changes will ensure land sharks become an endangered species and that honest real estate professionals will no longer be tarred by the same brush as the last land shark who rips someone off and brings the entire industry into disrepute.

The changes are not going to cost consumers any extra money. The new structure will be funded by the industry, not taxpayers, and it will not cost consumers anything to lodge a complaint.

Other changes include:

* agents will no longer be required to be members of REINZ;

* the establishment of a public register of real estate agents and salespeople that records any breaches of industry standards;

* licensees will be required to undergo ongoing professional development training.

These changes will no doubt cause concern for some in the industry as it comes to grips with the implications of the proposals. But if it means extra security for buyers and sellers and a restoration of faith in the real estate industry then it should be embraced.