Regulation of the property management industry has taken a major step forward with the government announcing the proposed framework and time frame for implementing a regulated industry.

But although the announcement was very much welcomed, regulation is not a done deal yet.

At the 2022 Property Management Conference held in Wellington in November, a political panel consisting of Labour Housing Minister Megan Woods, National housing spokesperson Chris Bishop, ACT Deputy Leader Brooke van Velden and Green Party MP Chloe Swarbrick, discussed many issues facing our industry, tenants and landlords.

It did not take long for the topic to turn to regulation and all members of the panel shared their views. Everyone knew the opinions of Labour and the Greens, who have been promising regulation for some time. However, it was interesting to get the views of National and ACT.

Unsurprisingly, ACT was opposed to regulation. The view of van Velden was that there is too much regulation and government interference in our lives. The views of Chris Bishop and National are critical over whether regulation is needed. On listening to Bishop there is no certainty that National will support this. His view was similar to van Velden’s that an already bloated public sector needed to be trimmed rather than added to.

BODY LANGUAGE

Bishop promised they would review the bill, and if they felt it necessary would support it. However, his body language suggested they had more pressing matters to deal with, such as inflation, the cost of living, and getting more homes built.

Looking at the time frame for regulation and the length of time it will take to get through the House of Representatives, there is no guarantee regulation will happen. If National and ACT form a government next year, which is looking increasingly plausible, there is every possibility the bill to regulate property management will be thrown out.

The Real Estate Institute of New Zealand (REINZ) needs to turn its attention to lobbying the National Party over the importance of regulation.

Many within the industry have been arguing that regulation is long overdue, and we now have a basic understanding regarding what we anticipate this will look like.

• The Ministry of Housing and Urban Development will act as the regulatory steward to the property management sector.

• A guiding regulatory framework and code of conduct will be implemented.

• The Real Estate Authority (REA) will be responsible for the licensing of property managers and their agencies***.

• Individuals who work in the industry must be “a fit and proper person”.

• Non-interest-bearing trust accounts and annual audits of accounts will become compulsory.

• Compulsory continued professional development and training framework will be developed***.

• The REA will also front the disciplinary framework and tribunal.

• Fines and penalties can be imposed on agencies and individuals who breach the regulatory framework.

***Similar to real estate salespeople.

‘Looking at the time frame … there is no guarantee regulation will happen’

QUALITY OF SERVICES

Many may wonder why regulating our industry is so important. An argument against regulation is that it will simply add more cost to companies, which will be passed on to landlords and tenants. I do not share these views. Property management as an industry is in its infancy, and regulation will increase the professionalism and quality of the products and services we offer.

It will also mean companies will no longer be prepared to take risks by managing non-compliant properties. The fear of losing their licence to operate will be too great to make the risk worthwhile. This will lead to landlords improving their product, which will benefit the tenant who will have a warm, dry, and safe home.

One impact of regulation could be a consolidation of the property management industry as many smaller operators decide to sell up, as the work involved in becoming regulated will be too much for them.

An industry with fewer companies but managing much bigger portfolios will be a likely outcome.