Call for property manager regulation

Most consumers do not understand that there is no regulation of residential property managers, the chief executive of the Real Estate Institute says.

Tuesday, November 18th 2014, 12:00AM

by Susan Edmunds

Founder of Pukeko Rental Manager David Pearse has called for more rules for the sector, which he said needed to be rid of its “cowboys”.

He said compulsory training or minimum qualification requirements should be introduced, as a priority, and claimed that some property managers were using money held in trust accounts for their own use.

“In 2010, changes were made to allow anyone in the letting business to charge a letting fee, and not just real estate companies,” Pearse said.

“This has led to anybody being able to establish a property management business. As a result, the industry has remained largely unchecked leaving cowboy operators to flourish and standards to decline even further. Currently, anyone can work in the industry regardless of their educational qualifications or experience.”

REINZ chief executive Helen O’Sullivan said her organisation supported more regulation of property managers, and said it should be done by the Real Estate Agents Authority.

“Our point of view is that there is an issue there. Landlords can choose their property managers but tenants can’t. Because it’s a totally unregulated sector, no qualifications are needed to be a property manager.”

Managers did not need to meet any competency requirements or even have a police check, she said, despite holding keys to their tenants’ homes.

“Strangely enough, while you could lose your license to sell real estate for stealing a residential property management client’s money, you would remain qualified to run a property management business. Someone not licensed as a real estate agent who did the same thing is not subject to the REAA and is therefore beyond the reach of that regime, and consumers must seek redress via civil penalties through the courts, or criminal penalties via a police complaint.”
Not enough people understood the new law, O’Sullivan said.

“Residential property management is totally unregulated and I don’t think a lot of consumers are aware of that. We get consumers ringing up to complain.”

Managers should be required to keep client money in a trust account and undertake formal training, she said.

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