Category Archives for Opinion

Agent Licence Reforms in NSW – 2018

Proposed Agent Licence Reforms in NSW (as at 14 September, 2018)(and as at 13 May, 2019)

The FACTS:

  1. There is STILL NO DATE set for the ‘new’ licensing regulations or CPD Guidelines
  2. The Guidelines are being drafted, but NOT yet released for industry consultation
  3. NOTHING did happen on 1 July, 2018 (despite the assurances it would) – and is, on latest advice, unlikely to happen until July 2019
  4. Those who have been “claiming to know” what is happening, apparently, still don’t!!

We have been confronted by lots of claims and counter-claims about what is happening in the NSW property industry regarding licensing reforms, and when these changes will occur. To the very best of our knowledge, these are the answers to those questions, as at 14 September, 2018 – and even (still) at 13th May, 2019 ther eis no word from the Regulator in NSW of when the licensing reforms will be implemented.

Frequently Asked Questions

Have the Regulations been drafted by Fair Trading? No, not yet. The Regulations have still NOT been finalised, let alone released for industry discussion, nor approved, nor passed

Should I get my licence now? Why not? Education and training should be a life-long pursuit …. for everyone

Will it be easier now or after the Regulations are implemented? We don’t know for sure – because we don’t know what the new Regulations will say. “They” said it would be 7 units for the COR, then “they” said 5 – then “they” said “5 is like 7”! Until we see the new training package and the new Regulations, it’s anyone’s guess what will be. “They” are still saying it will be 5 on their website, but ….

Does everyone with a Certificate of Registration have to get their Licence? That is what is being proposed. The Reform Paper suggested it should be done within four (4) years

Will all licensed agents have to get the Diploma? The Reform Paper suggested that “a grandfather clause” be put in place for those who are existing Licensees-in-Charge. The Diploma will be the qualification for those wanting to be L-I-C (after the Regulations are introduced), as well as a requirement for 2 years’ experience as a Licensed Agent

Are these reforms a good idea? Some of them are excellent proposals, and anything that increases the knowledge, skills and experience of agents is a great thing for the industry

Do all agents need more training? Of course – lifelong learning is a great thing, to stay with (or ahead of) the pack

Who gets to decide what training you need to do your job better? Great question! At the moment, it’s a small group of ‘industry associations’ and Fair Trading who have been making the decisions

Do all Licensees-in-Charge need to have better management training? No, of course not – but some do!

Will these reforms get rid of “dodgy operators”? No, of course not, but the more knowledge requirements there are focusing on ‘legals’ and ‘ethical behaviours’, the better for everyone

When will we know the details? Unknown. Fair Trading have said CPD changes are “likely” in October or November –  at the earliest (don’t hold your breath). It may not be until 2019. It most certainly was NOT 1 July, 2018 – despite what “they” keep saying! Indications are it will be “after the next NSW State election” in March, 2019 – or even July, 2019 ….. fact is WE DON’T KNOW, and NSW Fair Trading have NOT SAID when it will be. [Last time I checked, NSW Fair Trading were the “makers of the rules”]

Should everyone be required to get the full licence? We don’t think so, but Fair Trading and the ‘industry associations’ seem to think it will solve all manner of issues. In no other industry group are ALL employees required to hold the same level of qualification, regardless of their job description or experience – but what would we know?

How long between the COR and full licence? The Reform Paper says there will need to be at least one (1) year between being granted the COR and getting a licence (this is the same criteria as is currently the case in Victoria)

What CPD will COR holders need to do? COR holders will be expected to be doing their Licence course; it is proposed they will have up to four (4) years to complete it. Once completed, and the licence granted, it is anticipated they will then join the regular CPD program outlined below

What CPD will be required for Licenced Agents? Three (3) hours Mandatory; three (3) hours Electives – who knows what that means? We need to wait for the Regulations. The Reform Paper says the Mandatory should be delivered by the ‘industry associations’ – because ……??

What CPD for Principals (Licensee-in-Charge)? An additional three (3) hours for Principals on “business related topics”, (to be determined by the ‘industry associations’?) giving Agency Principals a total of 9 hours of CPD each year

Will training requirements to get a licence increase by 600%? That’s what the “marketing message” has been. A “600% increase” is likely only in the imaginations of those who reside in the cloud fogs of cuckoo land!

 

Proposed Strata rules: A good start

According to NSW Fair Trading Minister, Anthony Roberts, the proposed new laws are going to bring strata rules into the 21st century. Will they become a reality: and when do some of the other important things get addressed? Tony Rowe gives his opinion.

The results are in, and apparently, the Minister (and his department) “has listened to concerns on the ground” and will “continue to do so in order ensure the real issues affecting strata owners, strata industry professional organisations and other stakeholders” are considered with the new laws on strata management, to be introduced in mid-2014.

“We can make things a lot simpler and more certain for people. Consumer protection is a guiding principle in the government’s review, as is democratic process, transparency, accountability and appropriateness.” (I can almost hear Sir Humphrey Appleby speaking!)

I hope as readers can forgive my cynicism! I will withhold my enthusiasm for these changes until the final product is revealed – rather than the Press Releases from the Minister’s office trumpeting how good and fair the proposed new laws will be.

The new regulations (drafted by Fair Trading) are being touted as a panacea for all the ills of strata living! They promise to provide a positive outcome for everyone – owners, investors, tenants, and managing agents.

New “model by-laws” will cover smoke drift and allow pets by default, rather than having to seek special permission, as is now the case. Issues with owner renovations, overcrowding, building defects, levies, debt recovery, sinking funds, insurance, money management, dispute resolution, compliance and enforcement are all to be covered.

Nearly 60 percent of all schemes in NSW are currently managed by a licensed strata managing agent and that figure is closer to 100 percent in large and complex schemes. About 25 percent of all disputes reported to Fair Trading are about the conduct of managing agents.

There’s close to 72,000 registered strata plans ranging from 2 unit complexes through to massive mixed residential & commercial blocks.

Proxy votes will be restricted in schemes of more than 20 units to 5 percent of the ownership. In buildings of 20 units or fewer, owners will only be allowed to carry one proxy vote. Postal votes, secret ballots, online teleconferencing, electronic voting, flexibility in the timing of annual meetings, and greater transparency will be part of the package.

Presumably, Fair Trading will also mandate the compulsory attendance by owners at AGMs in this brave new world! So many of the problems faced by strata managing agents will be solved with this legislation – Minister Roberts said so!

The number one enquiry to Land and Property Information and NSW Fair Trading from strata and community schemes across the state is about common property maintenance (more than 500 calls per week). It is often quite a complex matter, with the many anomalies between schemes registered under different Acts. A simpler method of dealing with common property maintenance is desperately needed, and Minister Roberts has the solution.

According to the Minister so-called Phoenix companies and planned bankruptcies will be no more: “There will be serious consequences and ultimately offenders will be removed completely from the industry. This is frankly a disgusting practice and there will be zero tolerance.”

The ”too-hard” basket is pretty full though! Extinguishment of strata title; the vexed issue of short-term and/or holiday lettings in residential buildings; and the perennial problem of rogue parking have apparently been set aside for now (to be addressed later next year).

I shall withhold both my enthusiasm and final judgement until we see what treasures are to be found in the legislation.

National Licensing What’s Next?

Assembling a proposal for the reform of any industry sector is always a challenge, especially when the outcome of that proposal receives widespread criticism and almost universal condemnation. Such has been the outcome of the proposals for a national licensing scheme for the real estate sector.

A dogged determination to achieve a particular outcome – for the sake of achieving a particular goal – is an admirable trait in a sporting context, perhaps. When such determination is directed at a significant industry reform, it is important (indeed, some would say, critical) to the success of such an ambition that there is industry buy-in to the ambition and a clearly articulated industry benefit.

Undertaking a national ‘road show’ to explain a poorly researched and ill-considered Regulatory Impact Statement and attempting to dress it up as a ‘consultation process’ (and then releasing the Draft Legislation before that ‘consultation process’ is completed) would seem to suggest a thinly-veiled contempt for the views of those being consulted.

There have been consultations with regulators across the country who have failed to regulate their industry; with industry representatives who don’t necessarily represent the views of their members; with training providers who are out of touch with the training needs of the industry in which they operate; and with other stakeholders who seem to have a rather tenuous connection to, and an even more tenuous understanding of, the mechanics of government and the particular constitutional arrangements which govern the industry.

There have been (perhaps cynical) suggestions that the intent may well be to ensure the maintenance of the status quo. This is because what has happened is that, rather than gaining the support for what is, essentially, a sensible and practical improvement, hysterical opposition is goaded into action to mount a plethora of dubious arguments against the ill-conceived proposals and embark on a concentrated, coordinated campaign to discredit a fundamentally flawed offering.

The discussions around a consistent National Licensing System have been hijacked away from the merits of such a scheme – which would free up cross border trading and simplify the system to allow the free-flow of skilled operatives to function in multiple jurisdictions.

The harmonisation of consistent legislation for the functions of agency work across the country is a ‘next step’ in this process. There are complex constitutional issues surrounding this whole regulatory review. The ‘conduct’ issues of the property sector (the way agents do their job and the penalties if they don’t) are the preserve of the State and Territory jurisdictions.

State Governments do not transfer powers to the Commonwealth easily. They usually only do so if there is a clear economic or security imperative. No such imperative exists at present.

To expect State and Territory regulators (let alone legislators or industry representative bodies) to agree to harmonised legislation without such imperatives, in the current political circumstances, is naive.

There is no clear political advantage, to either side of politics, at either State or Federal level, to drive such a significant change in the way the property industry functions. Until such an advantage is articulated and gains much broader support, harmonisation of legislation in the property sector is unlikely to be high on any political agenda.

That such strident objections from a diverse range of industry groups and individuals have been made should be sufficient for the proponents of the RIS and the Draft Legislation to give pause, recognise the shortcomings in them and, if not start all over again, at least put any implementation timetable on hold whilst they consider the objections in detail, consult more broadly than they have thus far, and adopt a more balanced approach to achieve an outcome that will have, at least, some industry support.

The one group for whom national licensing makes the most sense – commercial, industrial and retail agents – is to be ‘deregulated’ under the RIS proposal. The committee found it too difficult to define, so opted to leave it out altogether! In so doing, a whole raft of investors – in fact, the great majority of investors in commercial property – will have no specific protection under real property legislation. That is a serious abrogation of responsibility for consumer protection by those responsible for the RIS and the Draft Legislation – and all because they found it too difficult to come up with a workable definition!

It seems, from the consultations thus far, there is widespread industry support for the notion of professional development for property agents, despite the recommendation that it NOT be included in any national licensing system.

The challenge for the regulators is to devise a workable, practical and relevant system which ensures industry operatives maintain currency with legislative and regulatory changes, whilst also providing some flexibility for agents to enhance their skills and knowledge across a range of delivery options relevant to their particular industry sector.

To not have a CPD component under the national licensing regime is an acknowledgement that the regulators do not have the wherewithal to devise a valid, worthwhile scheme for ensuring and improving the professionalism of the industry which they supposedly control and monitor.

It is a ‘surrender’ to the cowboys, and a concession of their abject failure to enhance the industry they purport to oversee in order to protect the consumer.

No one is suggesting it is easy to come up with a program which is going to satisfy all stakeholders. However, much of the opposition would be minimised if there was broader consultation before coming up with the proposals which seem to be ill-considered, irrelevant and based on some fairly spurious claims of industry benefit.

A clearer explanation of the need for a national licensing system, some clarity around the purpose of implementing it, and some appreciation of the peculiar diversity of the property industry would have saved a lot of the back-tracking that is now required.