National Licensing for the Real Estate Industry is not going to proceed

The Council of Australian Governments (COAG) held its 36th meeting today in Canberra and it would appear as though National Licensing for our industry will not be proceeding.

In the Communique from the meeting it was stated:

“COAG noted that, following the outcome of extensive State-based consultation, the majority of States decided not to pursue the proposed National Occupational Licensing Scheme (NOLS) reform. Most jurisdictions identified a number of concerns with the proposed NOLS model and potential costs. States instead decided to investigate approaches that would increase labour mobility and deliver net benefits for businesses and governments.”

” To this end, States agreed to work together via the Council for the Australian Federation (CAF) to develop alternative options for minimising licensing impediments to improving labour mobility and to manage the orderly disestablishment of the National Occupation Licensing Authority from early 2014.”

While EAC was in favour of National Licensing, we had stated that in the proposed form we did not believe it was in the best interest of the industry or consumers. We can now look forward to maintaining the educational standards and professionalism of the real estate occupations.

National Licensing For Property Occupations

Practitioners would be well aware that the Council of Australian Governments (COAG) has for some time been developing regulatory reform for a single national licence for real estate agents. Consultation with a wide range of stakeholders and representative industry bodies has taken place at both state and national levels coordinated by the COAG National Licensing Steering Committee.

All this activity culminated in the release of the Consultation Regulation Impact Statement (RIS). The content of this long awaited and highly anticipated document was both surprising and disappointing to say the least.

The RIS has, as a fundamental platform, the proposal to deregulate a huge proportion of real estate transactions on the basis that some State and Territories have inconsistent regulatory requirements for various component activities in real estate practice and that some appear to have no strong rationale for inclusion.

Practice areas proposed to be TOTALLY deregulated include:
– All Commercial activity including Industrial and Retail (sales, auctions, leasing and management)
– All Livestock sales, purchase and auction
– All Primary Production land (sales, auction, leasing and management). The recommendation is to abolish the existing Stock and Station Agents licence
– All holiday and short term leasing up to 90 days

Other significant changes proposed include:
– Buyers Agents and On Site Residential Property Manager licenses to be merged with the Real Estate Agent licence
– Abolish the Certificate of Registration requirement for Strata Managers representative
– Abolish mandatory CPD

Licence categories to be retained are:
– Real Estate Agent. This will be for residential transactions only and will include Buyers Agent and On Site Residential Property Manager
– Business Agent
– Strata Managing Agent
– Auctioneer
– Certificate of Registration for employees, not Strata.

So What Does All This Mean?
All transactions in the deregulated categories can be conducted by unqualified, unsupervised and unlicensed persons operating outside a regulatory environment. In essence NO Rules of Conduct, NO Trust Accounts, NO Audits and NO Consumer Protection. A major concern for Agents, Consumers and Regulators is the fact that property transactions worth billions of dollars nationally will be removed from the existing regulatory structure with commensurate massive impacts on agency practice and consumer protection.

The rationale behind this proposal is difficult if not impossible to understand and if implemented will change the face of agency practice, erode consumer confidence and fail to achieve the stated goals of the national licencing initiative.

In our submission we supported the option to maintain the status quo and suggested that the real estate industry be moved to the second tranche of national licencing to allow for further consultation and consideration of the issues raised in the submissions.

It is expected that submissions will be considered in November and a final outcome known by December 2012. Members will be kept informed as developments occur.

In the Pipeline – What’s Happening at EAC

Welcome to another edition of From the Boardroom, our first edition coming to you fully online and from our new Head Office at Rosehill.

Things are pretty busy here at EAC, let me say that I am happy to get back to my normal role after the move and for anyone that has ever moved an organisation of 40 plus people after twenty five years you will know what I am talking about.

The move to new premises has been on the agenda for some time now and the main reason for the move was that the offices at Villawood just simply did not meet our needs
anymore. We had over 2,500 sqm at Villawood and as a result of us outsourcing the printing of our publications and selling off all our presses more than half the space we had was unutilised. The premises also did not present the organisation in its true light and we no longer wanted to be located in an industrial area.

The move provided us with the opportunity to change many things and things are very different at the “New EAC” as I describe it. As part of the move we have reviewed the way we were doing things and have implemented many new policies and procedures to streamline our operations, minimise costs and to provide a better level of service.

There is also change in the pipeline for the industry and I suggest some of the biggest changes we have seen for some time. One of these changes is the proposed introduction of National Licencing and EAC has been involved in the consultative process since the beginning. The Regulation Impact Statement (RIS) for Property Occupations has been released for discussion and some of the suggested changes will have serious consequences for all real estate practitioners. We have held meetings with several other industry groups, NSW Fair Trading and NOLA representatives to express our concerns and will be holding seminars on National Licencing in the coming weeks to obtain further feedback from the industry prior to making our submission on the proposed changes.

The Minister for Fair Trading, Anthony Roberts, has announced consultation on proposed compulsory professional indemnity insurance for licensed property occupations. It is proposed from 1 January 2013, all licensees under the Property, Stock and Business Agents Act 2002 be required to hold a minimum of $1 million professional indemnity insurance with a number of set policy inclusions.

EAC has provided feedback on this proposal in our meetings with NSW Fair Trading in the past twelve months and will be making a formal submission providing our feedback in early October.

If you have any feedback on either the National Licensing or introduction of compulsory professional indemnity insurance please call us or submit it to practicesupport@eac.com.au.

For those involved in Strata, NSW Fair Trading is also reviewing the Strata and Community Title laws and is seeking industry comment. While we have some members that operate in this area we won’t be putting a submission in this regard at this stage.

NSW Fair Trading has also announced a new partnership with EAC to supply the fact sheets pertaining to Agency Agreements, Bidders Guides as well as New Tenant Checklists.
This partnership sees NSW Fair Trading ceasing to supply their real estate fact sheets in print form, and bulk copies can now be purchased through EAC.

There have also been some big changes to Red Square in the past few months, with more on the way. On June 30 we turned off the Red Square application, who would have thought that it was in the marketplace for some 13 years. In the end the underlying technology just became outdated and with the introduction of Red Square Web we now have a solid platform that we can build on for years to come. In September we released a major upgrade to Red Square Web and Mapping and we are about to release an upgrade to Red Square Mobile. The next month will see the addition of mobile websites for your office as a new product from our Web Services team.

For those that have been waiting for our new Listing Management feature, development of this module is now complete and is undergoing internal testing. The new Listing Management feature has been redeveloped from the ground up and when introduced will require us to make changes to the underlying systems and websites. The team is working through these changes as we speak and we are looking at a 4th quarter release date.

On the realestateworld.com.au front we have recently updated the logo to a cleaner and more modern look and feel and have updated the website and masthead on our publications. We have also recently produced some new TV and radio advertisements featuring Wendell Sailor which will be used in some regional areas. Traffic and the number of listings on the website continue to grow and October will see the release of a new realestateworld.com.au mobile website. Work is also now well underway on the development of a new realestateworld.com.au website which will be released at this stage around the same time as the new Listing Management feature.

As you can hopefully gather from the above we are investing a lot of time and effort into our products and services and ensuring the interests of the industry, practitioners and
members are protected. We can only do this with your support and feedback and as always, we welcome any feedback you might have to help us make our products and services and the industry we are part of better.