The NSW government has announced reforms to the Property, Stock and Business Agents Act, in an effort to clean up the real estate agency industry.
It is a big win for the Real Estate Institute of NSW, which has been lobbying for nearly 10 years to tighten up the law in keeping with the institute's goals to professionalise real estate agents.
The reforms, including higher training standards for agents, tougher audits on trust accounts and higher transparency on commissions received by agents, are the first since the law was enacted in 2002.
"Buying or selling a home is one of the biggest investments most of us will make in our lifetime – consumers have every right to expect that agents are doing the right thing," Minister for Better Regulation Matt Kean said.
"We want to make sure that those who work in the industry are properly qualified, and better protections are in place to crack down on any dodgy operators. Real estate agents rely on reputation and it's vitally important consumers are able to trust them to behave professionally and ethically."
Other reforms include creating a new licensee-in-charge qualification, who will supervise agents, oversee trust accounts, and ensure compliance. New fraud prevention measures will also be imposed such as requiring agents to transfer rental income out of trust accounts at the end of each month.
Rogue agents
NSW Fair Trading will also have greater powers to tackle rogue agents.
REINSW President John Cunningham said the reforms were similar to the professional standards the institute was implementing.
The institute has seen a number of rogue or sloppy agents – who have slipped past the industry's low barriers to entry – try to cut corners in training and compliance or perpetrate trust account frauds, Mr Cunningham added.
"Those who are not capable or not willing should just get out of the industry," he said.
"Take what you do seriously and treat your customers with respect."
REINSW president-elect Leanne Pilkington said the reforms would provide comfort to consumers that they were working with an agent who was "ethically equipped to provide a great service".
Artilce by Su-Lin Tan appeared in The Financial Review
