Praneeta Mahajan
Hamilton, August 23, 2023
Regulation of property managers is a step closer, after the introduction of the Residential Property Managers Bill into Parliament last week.
The Bill is now awaiting its first reading and referral to a Select Committee.
The Bill aims to protect tenants and property owners by creating a comprehensive regulatory regime for residential property managers and residential property management organisations.
The proposed regulatory regime includes establishing licensing, training and education requirements, ensuring industry practice standards are being met, and providing accountability through a ‘complaints and discipline’ process.
Calls to regulate the property management industry have increased in recent years and the Labour Party campaigned on a promise of reform in the last election.
Associate Housing Minister Barbara Edmonds said that housing plays a fundamental role in improving the well-being of all New Zealanders.
“We have introduced a Bill that protects renters and property owners by ensuring all residential property managers are qualified and accountable. Nearly one in three households rent in New Zealand with the residential property management sector responsible for around half of the rental market. While many residential property managers abide by professional standards, there is no current legal requirement for them to do so. It is clear there is a gap in the foundations of the sector which we need to fill. Putting safeguards in place is in the best interest of everyone, regardless of whether they’re renters or property owners,” she said.
The Real Estate Authority
REA (Real Estate Authority) has been identified as the proposed responsible regulator.
The Crown will provide initial funding for the design and development of the expanded function and the first year of operation. Beyond that, the funding will be provided from the residential property management sector by levies and fees on a cost recovery basis.
The Real Estate Institute of New Zealand (REINZ) has also welcomed the Bill.
Chief Executive Jen Baird said that the Institute has advocated a legislation for several years now and considers it as urgent.
“This legislation is critical to ensuring an equitable residential tenancies market for New Zealanders. Property managers across New Zealand collect millions of dollars from renters each week and manage hundreds of millions of dollars’ worth of landlords’ assets. This is an important sector that impacts directly on people’s lives, whether through access to homes to live in or in supporting investment goals,” she said.
Renters wanted more security and a set of standards for managers would assure tenants and landlords that the manager had the right skills, training and expertise, Ms Baird said.
She said that requiring property management companies to have appropriate insurance would also provide important protection.
“Property management continues to grow in complexity. Over the past four years, we have seen a raft of changes to legislation, including the Residential Tenancies Amendment Act, Healthy Homes legislation, changes to the Privacy Act and Health and Safety at Work Act, and more. Add to that environmental and social challenges such as Cyclone Gabrielle and we have a profession that New Zealanders have come to rely on. It is a complex business and hence there must be entry standards and an independent disciplinary and complaints resolution process. These are important to ensure minimum standards and safeguards are in place within a profession that has an impact on something as important as the homes people live in,” Ms Baird said.
Proposed requirements
The Bill requires residential property managers and residential property management organisations to be regulated by the Real Estate Authority. The proposed regime includes (a) establishing licensing, training and education requirements (b) requirements to ensure industry practice standards are being met and (c) providing accountability by establishing an independent, transparent, and effective complaint and disciplinary process.
Private and public landlords, including Kāinga Ora and registered Community Housing Providers, would not come under the proposed regime. Instead, public housing landlords will have a Code of Conduct to follow. This will be developed alongside the industry standards enabled by the regime.
The Residential Property Managers Bill is now awaiting its first reading and referral to Select Committee.
Praneeta Mahajan is an Indian Newslink Reporter based in Hamilton.
