In June, Estate Agents Co-operative (EAC) was invited to meet with the Minister for Innovation & Better Regulation, Victor Dominello. The Ministers portfolio includes NSW Fair Trading. Dale Whittaker (EAC Chairman), David Crombie (EAC CEO) & Geoff Hunter (Industry Liaison Consultant) accepted the invitation to discuss a number of topics, including Underquoting, Education standards, and Asbestos.
Minister Dominello announced a new range of underquoting guidelines in May, which were developed in consultation with the Estate Agents Co-operative and other stakeholders and are designed to provide agents with clarity over what constitutes underquoting and how it can be avoided.
At this time, Minister Dominello also announced that the Government would be seeking further legal powers in relation to underquoting. “We have also made a commitment to enhance legal protections against underquoting and we will be introducing legislation in the new Parliament,” said the minister.
The proposed laws are expected to clarify what constitutes underquoting, expand the existing financial penalties and place more stringent record-keeping requirements on real estate agents.
During the meeting with the Minster, EAC raised the concern over entry level and licencing standards in NSW as this is seen by the industry as a major contributor to the rising instance of underquoting and compliance problems generally. Member feedback to EAC has been that there has been a significant decline in the relevant standards that need to be achieved before agents are given their licence.
Minster Dominello agreed that standards have reduced and is actively working to ensure that they return to acceptable levels and will once again meet consumer expectations. He was also receptive to potentially requiring a minimum 1 to 2 year practical experience period be included in the licencing standards to ensure new licensees have the necessary experience before being able to open businesses.
Education standards have been a topic of much discussion with all states across Australia looking at the acceptable levels and standards for licencing.
EAC also spoke with the Minster about the issue of asbestos and its impact on the industry. The Mr. Fluffy asbestos issue, which has now affected over 70 homes in NSW, has brought to light a number of shortcomings in procedures, education and legislation.
After a meeting in January with NSW Fair Trading and Workcover a factsheet was produced to clearly outline to agents, property managers and consumers the steps that they need to take regarding Loose-Fill Insulation containing Asbestos in properties.
There are a number of obligations imposed on real estate agents by law in relation to Asbestos located in the properties agents are engaged to sell, lease or manage.
These obligations include:
- a duty of care to the client and workers engaged to carry out work on the property.
- a commitment to act honestly, fairly and professionally.
- a responsibility to disclose certain matters to prospective buyers and tenants.
However, agents and property managers cannot be expected to make qualified assessment of whether asbestos is present in a property. This has brought to light the fact that agents and property managers are left exposed by their Professional Indemnity Insurance which does not cover the risks associated with asbestos related claims.
Asbestos risks are what the insurance industry commonly refers to as ‘treaty exclusions’. This essentially means that the reinsurers, the people that insure the insurers, specifically exclude cover for asbestos, which prevents insurers from offering cover as part of their standard policy conditions. Currently in Australia, no Real Estate Professional Indemnity Insurer offers cover for claims arising out of asbestos risks in any way. This is a concern for agents who may be included in client actions as their policies will not respond to the legal defence and/or settlement costs they may incur to defend an action brought against them. As a result, this is a key issue for government to address, as it is neither equitable nor sustainable for the industry, or the public.
As pointed out to the Minster this issue becomes wider than just that of Loose-Fill Asbestos and Mr. Fluffy. The need for tighter legislative framework to cover agents is paramount. Further to this a best practice procedure is required for ongoing asbestos issues; this may involve mandatory asbestos reports on all properties that are offered for sale or lease. Mr. Dominello has acknowledged the need to further investigate and clarify the duties and responsibilities of real estate agents and property owners. However, this type of legislative change is far reaching and stretches across many political portfolios.
Minister Dominello has invited Estate Agents Co-operative to join an industry based committee for ongoing communication and resolution to the many challenges facing our industry. “The protection and representation of NSW agents and property managers is of the utmost importance to EAC,” said David Crombie, EAC CEO. “That is why it is so important that we work with NSW Government departments and Minister Dominello.”
Estate Agents Co-operative has also been participating in the consultation meetings relating to the proposed reforms to the Strata Titles Act 1973. The reforms seek to bring strata laws up to date with more than 90 proposed reforms. NSW currently has over 75,000 strata schemes worth over $350 billion in assets.
The proposed changes aim to:
- make it easier for owners corporations to manage issues like pets, parking and by-laws
- create a new democratic process for collective sale and renewal of strata schemes
- support the responsible management of schemes with new accountabilities for strata managing agents
- establish a new process to help ensure building defects are addressed early in the life of the building
- enable modern forms of communication (including new options for your strata scheme to keep and issue electronic records, issue email updates and attend meetings ‘virtually’) to allow greater participation in schemes.