The Real Estate Institute will be stripped of its powers over the country's 18,000 agents and a new, independent authority will be set up under legislation passed by parliament.
The Real Estate Agents Bill establishes the Real Estate Agents Authority, which will oversee licensing, set industry standards, set fees and levies and deal with complaints and disciplinary action against agents.
Associate Justice Minister Clayton Cosgrove introduced the bill after numerous buyers and sellers complained about being ripped off by agents, and the lengthy and often ineffective in-house procedure for dealing with those who broke the rules.
Cosgrove went head to head with the institute and he was criticised for talking about sharks and rogues in the industry.
The bill passed its final stages under urgency on Thursday night and Cosgrove says people who have problems with agents will get a fair go for the first time.
"The new authority will deal with complaints quickly and effectively," he says.
"It will not cost consumers anything to lodge a complaint and they will not be required to hire lawyers because the authority will represent their case if it is referred to the disciplinary tribunal."
Under the new law, the real estate industry will no longer be allowed to police itself and new protections are put in place for both house buyers and sellers.
People buying and selling houses will be protected and can claim compensation if they are treated badly by agents.
Belinda Allan from Consumer NZ says it's great that there is now an independent complaints board.
"So consumers can make a complaint if they feel they've been ripped off, and it's great that they won't need to pay any money to lodge a complaint either," says Allan.
For the first time there will be consumer redress, including compensation of up to $100,000.
"The most important people in this whole deal are the honest real estate agents and the consumers," Cosgrove says.
"I look forward to working with the industry. We will get rid of the bad guys. We will restore and promote the positive work of those in real estate, and restore the faith consumers should have in this industry."
National opposed the bill, and MP Kate Wilkinson says property managers should be covered by its provisions."Property management isn't in it, although it's an integral part of the industry," she says.
"Of course we support legislation that protects consumers but this legislation is a missed opportunity, a disappointment.
"We do not have a workable piece of legislation and at the end of the day the consumer will not have more protection than under existing legislation."
Cosgrove says property managers could easily be brought under the legislation if there is evidence that they should be.
The bill passed its third reading by 65 votes to 53.
But people who have been victims of rogue realtors were pleased with the bill and its passing. One of those victims was Bronwyn Hilbron, who died waiting for justice.
"The whole thing was absolutely disastrous for her family; it cost her enormously, in terms of financial, stress on her health," says Suzanne Roberts, Hilbron's sister
Her family claims she was pressured into selling her house for
almost a $100,000 less than it was worth.
She filed a complaint with the Real Estate Institute, but died of
cancer three years later still waiting.
"It just should never have happened & Someone should be held accountable for it," says Roberts.
It was cases like hers and others like it that sparked the reforms.
The independent complaints authority has also been given greater powers.
Rogue real estate agents face stiffer fines, have their licenses suspended or cancelled.
There will be a public register for those agents who breach industry standards and consumers can now get compensation of up to a $100,000.
Peter Thompson from Barfoot and Thompson is in agreement with the compensation of the victim.
"For those that do transgress from the true nature of a real
estate agreement, I think it can only be good that the victim gets
refunded some money," says Thompson.
But the Real Estate Institute says the law needed more work.
"Rushing through something just for the sake of getting a bill is not often the way to go," says Murray Cleland.
But it's enough for Hilbron's family.
"She would be really pleased that at least something good as come about from her experience," says Roberts.
But there will be a wait as the new authority will not start hearing complaints until the law comes into force in 14 months time and will not cover those already filed.
