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
– 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.