Unlicensed property managers causing trouble
The Real Estate Institute of New Zealand (REINZ) is calling on the government to act to curb a proliferation of unlicensed property managers.
Wednesday, March 19th 2003, 6:47AM
by Jenny Ruth
It says the number of unlicensed property managers managing rental housing is snowballing and that they create risks for those dealing with them.
"These unlicensed property managers are a growing concern because they are cutting corners and taking advantage of loopholes in the law which enable them to compete with licensed property managers without the compliance requirements which are specifically there to protect the public," REINZ president Graeme Woodley says.
This is putting those governed by the Real Estate Agents Act at an unfair disadvantage.
"What you have are unlicensed people, often with no training or experience, setting themselves up as managers and conducting business outside of the requirements of the Real Estate Agents Act without the backing of the Fidelity Fund or running a proper audited trust account," Woodley says.
"These unlicensed people have a view that they can get around the law by not charging an agent's fee, but what they are doing is bundling the fee into their other charges so the tenants finish up paying anyway through higher rentals."
The act provides significant public protection which REINZ doesn’t want to see eroded.
He cites as one example an unlicensed agent managing both their own and other owners’ properties but combining the rent from all the properties into a single account.
In other recent cases, owners have asked unlicensed agents to sell their properties and the manager has bought the properties and then on-sold them a month later at a profit.
"That sort of behaviour would not be tolerated by REINZ and is not permitted under the act, but because the unlicensed property manager is not subject to the act, the client has no comeback at all," Woodley says.
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