The Residential Property Managers Bill seeks to enhance the protection of both tenants and property owners by introducing a comprehensive regulatory framework for residential property managers and other organisations engaged in residential property management.
This will include licensing, training, education prerequisites, industry benchmarks, and a mechanism for addressing grievances and imposing disciplinary measures.
While many property managers uphold appropriate professional standards, the sector currently lacks a legal mandate to adhere to minimal standards of conduct, competency, and industry practices.
This bill will apply to individual property managers, including real estate companies that provide property management services, as well as residential property management organisations.
However, at this stage, both private and public landlords, such as Kāinga Ora and community housing providers, will remain exempt from this regime, as they are already subject to regulation under the Residential Tenancies Act (RTA), undermining the overall effectiveness of the proposed regulatory measures.
Jen Baird, Chief Executive of REINZ, believes, "Regulating the profession with standards will provide tenants and landlords the necessary reassurance that their licensed property manager possesses the essential skills, training, and expertise."
Mandating property management firms to carry appropriate insurance will offer much-needed protection for both landlords and tenants. Additionally, property management organisations will need to maintain a trust account, which Oxygen has; this account will be subject to independent audits by the Real Estate Authority (REA) to ensure the secure handling of all funds received on behalf of clients or tenants.
Property management continues to grow in complexity, with numerous legislative changes over the past few years, including the Residential Tenancies Amendment Act, Healthy Homes legislation, amendments to the Privacy Act and Health and Safety at Work Act, and other factors like environmental challenges. There is a real need for entry standards and an independent system for addressing complaints and enforcing discipline.
The new regulatory framework will include:
- Registration and licensing for individual property managers and property management organisations.
- Training and entry prerequisites.
- Industry practice standards.
- A process for handling complaints and imposing disciplinary measures.
Licensing and registration:
- Licensed residential property managers will be listed on a public register.
- A three-tiered licensing structure will be established for residential property managers.
- Each license class will have minimum qualification and training requirements.
- Licensed residential property management organizations (RMPOs) will also appear on a public register.
Additional entry requirements:
- Applicants must be at least 18 years old.
- They must not be disqualified under the specific prohibitions outlined in the legislation.
- A "fit and proper person" assessment will be conducted, with regulatory guidance on the assessment criteria.
- Industry experience will be a requirement for standard and supervisory license classes.
Professional and industry practice requirements:
- Continuous professional development will be mandatory.
- A code of professional conduct and client care will be established.
- Companies will be required to maintain trust accounts audited annually.
- Companies will need to meet specified insurance criteria.
Regulatory authority:
- Oversight will be under the purview of the Real Estate Authority (REA).
- Complaints and discipline:
- An independent framework will address complaints related to professional conduct.
- A "no wrong door" approach will be adopted for complaints and disciplinary matters.
- Complaints assessment committees and an independent disciplinary tribunal will be established.
Offences and penalties:
- Penalties will be imposed for actions like providing false information, practicing without registration or licensing, failing to maintain financial records, and other violations.
Overall, this is BIG news for our industry and a significant step forward in the right direction. The Residential Property Managers Bill passed its first reading on 30 August with broad support and has now been sent to the Select Committee.
If enacted, an 18-month period will be granted to allow the Regulatory Authority to establish systems and formulate regulations and operational standards.
An additional six months will be provided for residential property managers and companies to obtain licenses before the full regulatory regime comes into effect (24 months after enactment).
REINZ (Real Estate Institute of New Zealand) and its members, including Oxygen, support regulation and will closely monitor progress.
