Consumer protection

The real estate industry has undergone a much-needed legislative overhaul. The main changes are:

• Anyone who carries out "real estate agency work" must be licensed by the new independent regulatory body, the Real Estate Agents Authority (REAA). It also investigates concerns about agents' behaviour.
• A public register lists all agents – and notes whether they've been disciplined in the last 3 years.
• There’s greater disclosure required about conflicts of interest and the estimated size of commissions.
• A Real Estate Disciplinary Tribunal deals with serious misconduct.
• Higher fines and tougher penalties for misconduct have been introduced. Complaints Assessment Committees can fine an agent up to $10,000; if the case goes to the tribunal, the fine can be up to $15,000. The tribunal can also award up to $100,000 compensation to clients, and cancel or suspend an agent’s licence.

All agents must have their own complaints process. If a complaint can’t be resolved at that level, the REAA is the next step.

The REAA has received 1061 complaints between November 2009, when it began, and 30 June 2011. Over a third of these are for "incompetency or negligence" or "misrepresentation". Just over 100 cases of unsatisfactory conduct have been proven and 27 charges laid with the disciplinary tribunal. Many of the other complaints have been minor and easily resolved. The large volume of complaints received by the REAA was one of the reasons agents' levies increased by 50 percent.

The REAA has now streamlined its procedures to achieve compliance through advice and mediation, backed up by investigation and enforcement when necessary. This reduces the number of complaints being referred to formal investigation.

Older complaints

Complaints about deals completed before 17 November 2009 (when the new Act came into force) that haven’t been resolved can still be considered by the REAA. But the complaint can only be about something that could have been considered under the previous Act – and any disciplinary action is limited to what could be ordered under that Act.