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.

Real estate fraud prevention guidelines

Fair Trading has produced new guidelines to assist real estate agents to prevent identity fraud.

The guidelines provide:

  • commonsense practices and procedures for agents to confirm the identity of vendors or their representatives
  • a list of possible fraud warning signs
  • instructions on what agents must do if they suspect fraudulent activity
  • a proof of identity checklist.

The guidelines are very good and include a Proof of identity checklist for vendors or their appointed representatives.

Download the Real estate fraud prevention guidelines in PDF format.

Proposal for National Licensing Consultation Regulation Impact Statement

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 States 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 and
  • 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, devalue your business, erode consumer confidence and fail to achieve the stated goals of the national licencing initiative.

EAC is currently preparing a submission which will strongly object to the proposals and seek alternative solutions. We would recommend that all members also register their objection to these proposals by downloading the draft submission letter, amend to include your additional comments if necessary, print on your letterhead and send to COAG at the address shown or email: info@coagskillstaskforce.gov.au

This is an important issue for the industry and I ask that take the time to send the letter above.

Fair Trading releases new videos for real estate agents

NSW Fair Trading has released 3 new short videos on the Fair Trading YouTube channel.

The videos provide important tips on what to consider when buying or selling a home and the requirements of pricing real estate. The new videos are:

The DOS and DON’TS of pricing real estate  – In this video Fair Trading gives tips to real estate agents about pricing residential property.

Do your homework when buying or building a home – Research is the key to buying the right home. In this video Fair Trading provides important tips about things to consider when buying a home. Make sure that your research includes a Red Square Neighbourhood Report from an EAC Member.

Do your homework when selling a home – Making the process easier, This video outlines important information to help make selling your home as stress free as possible. Make sure that your research includes a Red Square Comparative Market Analysis Report from an EAC Member.

NSW Fair Trading welcomes your feedback and would like to hear your ideas on topics for future real estate videos. Email your feedback and ideas to: property@services.nsw.gov.au.

To view the whole range of Fair Trading videos on offer visit the Fair Trading YouTube channel.

EAC & NSW Fair Trading Partner to Provide Real Estate Fact Sheets

This week NSW Fair Trading announced the partnership with EAC to supply 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, which bulk copies can now be purchased through EAC. Click here for details.

NSW Fair Trading will however continue to provide online access to fact sheets for consumers to download and print from the NSW Fair Trading Website. These forms will be also available to order in selected community languages.

EAC also offer a wide range of real estate forms that cover residential, rural, commercial, business and retail requirements for real estate professionals. Click here to view the benefits of EAC printed real estate forms.

Professional Indemnity Reform Provides more protection for Consumers and Agents

Minister for Fair Trading Anthony Roberts has announced consultation on proposed
compulsory professional indemnity insurance for licensed property occupations, to ensure
consumers’ compensation claims for loss or injury can be met by industry members such
as real estate agents and strata managing agents.

Mr Roberts said proposed professional indemnity insurance means consumers renting or
living in a strata scheme have the security of knowing that if they are entitled to financial
compensation, the agent has the insurance to cover the claim.

“Given the risks associated with liability confronting the property industry, it makes sense
to require the industry to hold appropriate professional indemnity insurance cover,” Mr
Roberts said.

“The majority of the property industry already holds this kind of insurance however it is
essential that those who do not are brought in line with best practice standards.”

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.

“The NSW Government values the comments of all interested parties on this important issue and NSW Fair Trading will carefully consider all views before finalising a proposal,” said Mr Roberts.

NSW Fair Trading has released a draft Amending Regulation proposing the introduction of mandatory professional indemnity insurance and is seeking feedback by 5 October 2012.

Copies of the Amending Regulation can be found on the Fair Trading website at
www.fairtrading.nsw.gov.au.

Estate Agents Co-operative Ltd has previously provided feedback on this proposal in our meetings with Fair Trading and will be making a submission. If you have any feedback on the draft Amendment regulation please forward them to our Practice Support Team.

Changes to NSW Fair Trading fact sheets

NSW Fair Trading has amended its fact sheets for tenants and below is an overview of the changes.

Breaking a lease early
Property managers would be aware of the controversial issue relating to the interpretation of s.26 and s.100 of the Residential Tenancies Act 2010 as discussed  in the 14 March communication, Important tenancy issue, sent by EAC Compliance & Practice Support. If you missed it. If you are a Member and did not see it please contact Practice Support on  1300 137 161 and we can arrange to get it sent through to you.

Details of fact sheet changes
The text in the January 2011 fact sheet, Break a lease early, (see last bullet point under the sub-heading, ‘Breaking the agreement) has been changed and the words “a contract for sale had been drawn up” have been removed. The change brings the fact sheet in line with Fair Trading’s present interpretation of the legislation.

Former text:
“the landlord has put the premises on the market for sale, and you were not told before signing the lease that a contract for sale had been drawn up.”
March 2012 FTR78 text:
“the landlord has put the premises on the market for sale, and you were not told before signing the lease that the property would be sold.”

Rent increases
Last year, NSW State Parliament passed the Statute Law (Miscellaneous Provisions) Act 2011, which contained amendments to residential tenancies legislation including s.42 of the Residential Tenancies Act 2010 for rent increases under fixed term agreements. The change to the fact sheet brings it into line with the amended provision.

The text in the January 2011 version, under the sub-heading, ‘During the fixed term’, paragraphs 1 and 2 read as follows:

(1) “During a fixed term agreement of 2 years or less…”
(2) “During a fixed term agreement of more than 2 years…”

The text in February 2012 FTR85 reads as follows:

(1) “During a fixed term agreement of less than 2 years …”
(2) “During a fixed term agreement of 2 years or more …”

Getting your bond back
Text that appeared in the January 2011 fact sheet has been removed in the updated version, March 2012 FTR79. Although the changes are minor, if you include this fact sheet in your information folders to tenants it is recommended that you use the latest version.

National Licensing now due in 2013

Due to the complex nature of the national licensing proposals, the Council of Australian Governments (COAG) at its recent meeting agreed to revise the expected start date of 1 July 2012 to an unspecified date in 2013.

COAG has now committed to release the Consultation Regulation Impact Statement (RIS) in the first half of 2012, (the clock is ticking for a June 30 deadline). This consultation document will contain the specific detail of the reforms and provide stakeholders with the opportunity to assess the likely operational impact and to lodge submissions in response.

For further information read the media release from National Occupational Licensing Authority (NOLA). Click here to read more.

SCAM Alert – Warning to Real Estate Agents

Agents need to be aware of a new ID scam doing the rounds of real estate offices. This time the scammers are using a fax. The two-page fax attempts (unsuccessfully) to appear official. It purports to be from the Australian Government including a fake coat of arms, references to forms (NRL1 and NRL2) and HM Revenue & Customs. It comprises of a letter headed as an application to receive rental income without deduction of Australian tax, signed by Macauley Sanders, and a form that collects personal information of clients.

According to information on this link, real estate agents in the United Kingdom are also being targeted by the fraud.