Long-awaited NSW real estate industry reforms are set to be debated in parliament in the coming days following the release of proposed amendments to the Property, Stock and Business Agents Act in November 2017.
The bill includes changes to real estate and property laws affecting training, educational and licensing requirements in a bid to raise professional and training standards for NSW real estate and property licence holders.
- improved entry-level qualification for certificate holders
- new CPD requirements
- a new licence category of ‘licensee in charge’ requiring these agents to possess additional skills and experience and to provide better supervision of employees
- new fraud prevention measures
- enhanced disciplinary provisions where there is high and immediate consumer risk.
Introducing the Bill last year, Minister for Minister for Innovation and Better Regulation, Matt Kean, said reforms were designed “to put consumers first by improving educational and professional standards across the industry, improving accountability and transparency, streamlining the licensing framework and strengthening Fair Trading’s compliance and enforcement powers”.
The proposed bill flags three licence classes for agents including: licensees in charge, licensed agents and certificate of registration holders, in addition to tougher audits on trust accounts and higher transparency on commissions received by agents
Mr Kean explained the highest level or Class 1 licence would be required for anyone working as a licensee in charge of a business.
“In order to apply for the new “licensee in charge” class licence, a licensee will need to have two years’ work experience and will have to complete a diploma from the national property services training package. Alternatively, they must hold a certificate IV and an equal qualification in business management.”
The next level would be a class 2 licence, equivalent to the current full agent’s licence. Class 2 licence holders will be known as “licensed agents”.
“Licence applicants are already required to complete a certificate IV level qualification, and this requirement will remain. However, the reforms mean that class 2 licence holders will also need to have 12 months’ industry experience to apply for a full licence.”
The bill will also streamline the licensing framework, and reduce the number of licences required, with the buyer’s agent licence, the business agent’s licence and the on-site residential property manager’s licence integrated into the real estate agent’s licence.
The third level of licensing will apply to new industry entrants or certificate of registration holders.
“Under the new framework, they will need to complete three additional competency units from the certificate IV qualification, increasing the total to seven competency units needed to become a certificate holder. However, new licence applicants will also need to have 12 months’ industry experience, and will need to demonstrate that they have attained certain competencies.”
Mr Kean continued the qualifications and specific competency units that will be required for the new licensing framework would be the subject of close industry consultation in coming months and would be implemented in a manner that would avoid interruption to routine business.
“Although many real estate and property industry agents undertake their responsibilities to a high standard, the industry itself continues to express concerns that educational and qualification requirements are inadequate,” he told Parliament.
“The Property, Stock and Business Agents Amendment (Property Industry Reform) Bill 2017 is the first step in the Government’s overall reform package. It is essential that the legislation regulating the industry balances the need for appropriate levels of consumer protection with the need to ensure the efficient and effective operation of the industry.”
Changes to regulations and guidelines which support the operation of the Bill will be developed during the course of 2018.
The Bill and the Second Reading speech are available from the NSW Parliament website, with a date yet to be set for parliament to debate the proposed amendments.