Further step to regulation of property managers

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Wednesday, 23 August 2023

A new regime for property managers is now before Parliament.

The Residential Property Managers Bill aims to protect both tenants and property owners by creating a comprehensive regulatory regime for residential property managers and residential property management organisations.

The proposed regulatory system includes licensing, training and education requirements, along with industry practice standards, and a complaints and disciplinary framework. 

Nearly one in three households rent in New Zealand and the residential property management sector is responsible for managing around half of the residential tenancy market.

While many property managers abide by appropriate professional standards, the sector is not legally required to meet minimum conduct, competency and industry practice standards.

The Bill will apply to individual residential property managers – including real estate agents providing property management services – and residential property management organisations.

Private landlords and public landlords, including Kāinga Ora and community housing providers, will not be subject to the regime, as they are already regulated under the Residential Tenancies Act.

REINZ, the industry body representing about 90% of real estate professionals, says property managers across the country collect millions of dollars from renters each week and manage hundreds of millions of dollars’ worth of landlords’ assets.

“This is an important sector that impacts directly on people's lives, whether through access to homes to live in, or in supporting investment goals,” Jen Baird, REINZ chief executive says.

“We know renters want greater security and we believe that with about 50 per cent of the private rental market managed by residential property managers, enforcing a set of standards for the profession will give much needed assurance to tenants and landlords their licensed property manager has the requisite skills, training and expertise,” she says.

Requiring property management companies to hold appropriate insurance will provide important protection for both landlords and tenants.  In addition, property management organisations will be required to operate a trust account which the Real Estate Authority (REA) can require to be independently audited. This is to ensure all funds received on behalf of a client or tenant are always secure.

Baird says property management continues to grow in complexity. “Over the past four years we’ve seen a raft of changes to legislation, including the Residential Tenancies Amendment Act, Healthy Homes legislation, changes to the Privacy Act and Health and Safety at Work Act, and more.

“Add to that environmental and social challenges such as Cyclone Gabrielle and we have a profession that New Zealanders have come to rely on.”

She says it is a complex business so it is important there are entry standards and an independent disciplinary and complaints resolution process. “These are important to ensuring minimum standards and safeguards are in place within a profession that has an impact on something as important as the homes people live in.”

REINZ filed submissions with the Ministry of Housing and Urban Development (HUD), incorporating extensive feedback from our members.

Baird says she is pleased the feedback has been incorporated, and in particular that residential property management organisations will also need to be licensed. 

The proposed new regulatory regime will include:

Licensing and registration:

Further entry requirements:

Professional and industry practice requirements:

Regulatory authority:

Complaints and discipline:

Offences and penalties: 
To address issues relating to -  

The Bill is now awaiting its first reading and referral to select committee. If the Bill is enacted there will be an 18-month period to allow for the Regulatory Authority to establish systems and to allow for the making of regulations and operational standards and a further six months will be allowed for residential property managers and RPMOs to get licensed before the regime takes full effect (24 months after enactment).

Article source https://www.landlords.co.nz/article/976522147/further-step-to-regulation-of-property-managers?utm_source=LL&utm_medium=email&utm_campaign=Landlords+Daily+News+for+24+Aug+2023


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McDonald Property Management Ltd

Address: 376 Great South Rd, Papatoetoe

Postal address: P.O.Box 39393 Howick 2145

Since 2011