Part 2 property reforms
In March next year, the property industry is likely to experience one of the most significant regulatory reforms associated with qualifications and professional development in recent history.
As a Licensee-in-charge, office manager or business director, ensuring you take advantage of the months prior to the implementation of the reforms to plan, could mean the difference between business-as-usual in March 2020 and a hit to productivity.
If you didn’t read or contribute to Fair Trading’s draft property industry reforms released for consultation throughout September and you haven’t visited any real estate news sites in the last 12 months, you may have missed the fact our industry is possibly set for some major changes next year.
To catch you up, have a quick read of Part 1 of this series: The top 3 ways property industry reforms might affect you OR tune into ACOP’s video summary on their website.
In short, Fair Trading is proposing an array of amendments to the legislation that governs how real estate agents are licensed and your requirements for ongoing, annual training.
If the draft reforms are implemented, you can expect to apply for a new class of licence as of March 2020, regardless of how long you’ve been in the industry, and you can forget quick, half-hour, online CPD ‘training’ that awards the entire 12 points.
But as a property professional responsible for other agents, and possibly a business, you don’t have the luxury of only considering how these changes will affect you.
In order to ensure your business continues to run smoothly in the face of the reforms, now is the time to start planning. Here are five ways you can start preparing your business and your teams for these notable changes.
Review staff roles and current qualifications
Right now, an agent with a Certificate of Registration is largely unrestricted in their authority to manage a sales process from start to finish.
When the reforms are implemented, however, they will face restrictions such as the requirement for a licence agent to counter-sign any contract or transaction they enter into with another party.
This need for a ‘more experienced/less junior’ agent to validate contracts/transactions may have serious implications for productivity as what was once a one-man job, now requires two.
While a Certificate holder may be very experienced, having worked in the industry for a decade, in addition to requiring a counter-signature, they will now be called ‘Assistant Agents’, both of which may affect their credibility with clients, client’s agreement to work with them, and the credibility of your agency.
Review the structure of your business
The reforms will introduce a range of changes, a notable amendment being trust fund disbursements can only be made by a Class 1 Licensee-in-charge.
Using this as an example, sit down and review the structure of your business, your team and their job descriptions. To make it easier, draw up a hierarchy diagram, label each staff member with what their post-implementation licence class will be and list their main duties.
Now look to see if you will have staff with new licences that won’t allow them to continue to complete the duties they complete now.
Look at how many Licence-holding agents you have in comparison — think about their day-to-day and if they will be available to support your newly-labelled ‘Assistant Agents’ if and when they need it, so productivity and customer service aren’t affected.
Consider how your own job will change if you are the only Licensee-in-charge, and how your unavailability might affect productivity. How will trust fund disbursements be made if you are sick or on holidays?
While these simple questions only scratch the surface, the purpose of this activity is to think about what your business will need going forward and determine if the qualifications your team will have allow the business to function effectively.
Support staff in ‘stepping up’ now
Now that you have a clear idea of what you will have (based on current qualifications) and what you will need, make the most of the few months remaining before implementation of the reforms to support staff in increasing their licence level if they can.
Of course, being awarded a licence (even Class 2) will now require a level of experience, so some of your team may not be able to qualify up just yet. But for those who can, make it a priority to get them enrolled in a Licensing course and studying to complete it very early next year.
This approach may take a little sacrifice now, but in the medium-to-long term it could save your business a lot of challenge.
Think about succession planning — for you and your team
With the reforms in place as of March, we will now need to be a little better at thinking ahead and planning for the future.
Currently, if your licensed agent retires or moves onto another agency, a Certificate of Registration holder can jump into their shoes and provide the same sales or property management service to which clients have been accustomed.
With the reforms in place, that same Certificate holder will be more restricted in what they can do and may not even be able to be licensed for months or more until they meet the requirements for tenure in the industry and experience.
Similarly, if your parent is the Licensee-in-charge at your agency and they plan to retire next year, so you’ve come into the business 12 months ago to learn from them and ultimately take over their position, you may fall short of the requirements for Licensee-in-charge — and without one, your business can’t operate.
Open up your hierarchy again, and at the same time, open up the 24 task requirements Class 1 Licence holders must meet and the 15 Class 2 Licence holders must meet. For each of your team, work out if they meet the requirements for the next licence up, if not, how far short they fall, and how long it might take them to meet that requirement.
You want to make sure you always have someone who can slip into the next position up if needed, without a long wait, or your succession plan revolves solely around recruiting new blood.
As an example, if you are the only Licensee-in-charge or Class 1 equivalent currently, make sure you have someone on the team who meets the requirements for a Class 1, even if you don’t think they need it now.
Invest in professional development planning
Under the new reforms, CPD training will become much more than a ‘tick box’. And while some agents take full advantage of it now, the amendments will help ensure all agents capitalise on it as intended.
In big companies and corporate, HR often implements a mandated professional development system, under which it is required a manager and his/her direct reports meets several times a year (quarterly, for example) to discuss the report’s career planning.
This meeting provides an opportunity for the report to articulate where they want to go, what they want to be and what they hope to achieve, so they can work with their manager to plot a training path that supports this.
Your Licence-holding employees will undertake three hours of mandatory CPD topics each year (six for Class 1 Licence). They will also undertake three elective topics.
Working with your employee to define their desired career path, research and examine the available elective topics and which might be most suitable for helping them to continuously make strides towards their goal.
The pending property industry reforms are a very exciting time for real estate agents, so make the most of them to improve your agency operation by planning ahead.