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18 February 2022

Government proposes regulation of property managers

The government is proposing to regulate property managers, who look after around 40 percent of the country’s residential rental properties.

Associate Housing Minister, Poto Williams, has released a discussion paper outlining plans to clean up the industry, including a new licensing regime requiring property managers to comply with a code of conduct, and a complaints process.

Under the proposals, tenants and landlords would be able to complain about the actions of property managers. Individual property managers could face fines of up to $40,000 – and property management companies could face a $100,000 fine.

The tenants’ rights group, Renters United spokesperson Geordie Rogers, has welcomed the move but points out it still doesn’t cover 58 percent of the rental properties in the market managed privately by the owner.

“Whether the service is being provided by a property manager that doesn't own the property, or a property owner, they should both be expected to operate in the same way. We're not talking about the accreditation of upholstery repairers, we're talking about regulating a group of people who provide an essential need, housing.”

The proposed complaints and disciplinary system is modelled on that of the real estate industry.

The discussion paper suggests the licensing and certification of property managers could be done by the Real Estate Authority (REA).

Consumer NZ chief executive Jon Duffy said “We would strongly urge the Ministry to ensure any licensing and disciplinary regime is independent from the industry it is regulating for obvious reasons.”

Associate Housing Minister, Poto Williams, said regulating the property management sector is about making things fairer for renters and landlords. “We have heard the calls of the sector, which has said the lack of regulations mean renters feel reluctant to complain to, or about, their property manager for fear of losing their homes or jeopardising their ability to rent houses in the future.”

But Renters United argues that just licensing property managers will do little to stop this. “If we want to stop property managers from blacklisting tenants or exploiting tenants because they tried to uphold their own rights this plan needs a lot more oversight than it currently has.”

Consumer NZ will be making a submission on the proposal in the coming weeks.

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