Cosgrove Clayton: Real Estate Agents Bill — Second Reading In Committee Third Reading 
Cosgrove Clayton: Real Estate Agents Bill — Second Reading In Committee Third Reading 
[Volume:649;Page:18421] 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I will take a brief call to address some of the points that have been raised about Part 4 and about previous parts on which members have expended a lot of hot air trying to make some conspiracy— 
Nathan Guy 
: Not hot air! 
Hon CLAYTON COSGROVE 
:—or cold air in that member’s case—in respect of appointments. Let me make the position completely clear. Some member obviously could not read the bill and said the appointments would have to be made next week or the day after the bill receives the Royal assent— 
Charles Chauvel 
: It was David Carter. 
Hon CLAYTON COSGROVE 
: Of course yes a very learned member. The truth and the facts are—if we get rid of the hot or cold air—that the provision allowing appointments to the authority to be made indeed comes into force the day after the bill receives the Royal assent. However proper appointment processes especially in the period leading up to a general election will be followed. There is no need to rush these things because work can be got on with prior to appointments being made. It is not a requirement to make appointments when this section of the Act comes into force. Despite all the puffery that we hear from the Opposition side again the facts speak for themselves. 
Ms Wilkinson raised issues about the regional disciplinary committees. She seemed to put a thesis forward that had my predecessors and I over the last decade activated regional disciplinary committees with fines I believe in the order of $2000-odd and made up of members of the industry and other lay members then somehow peace would have broken out the veil would have fallen and all ills within the industry would have been solved. That is not true. On 2 October 2006 I met with the chief executive of the Real Estate Institute of New Zealand Christine Le Cren and Mr Cleland the national president and they indeed asked me to appoint members to set up regional disciplinary committees. I urged them and have continued to urge them to use the full extent of the old law. The 1976 Act despite the conjecture that the bar is too high to refer cases to the licensing board gives the Real Estate Institute of New Zealand the facility at any stage to refer any complaint. Whether it be flogging tea bags at smoko defrauding somebody of hundreds of thousands of dollars or acting inappropriately or unethically the institute has the ability as the gatekeeper to decide where these complaints go. I urge the institute rather than setting up another structure—National members talk about bureaucracy and then call on us to activate another structure—to use the powers in the Act that have existed since 1976. 
The other bonus of referring cases to the licensing board is that the board has the ability to impose fines up to $5000—not $2000 or $750 as the other subcommittees did—and it has the ability to suspend delicense or run the errant real estate agent out of town. If the member is trying to suggest that had we activated after 10 years more bureaucracy by activating a regional subcommittee that somehow would have solved every ill then I invite her to revisit her law classes because she appears to be a tad naive. 
Somebody I think it was Mr King asked what this authority is going to do. I can tell the member one thing it will do. It will produce codes of ethics and practice. It will not produce codes of ethics such as the code of ethics prior to Mr David Russell’s redrafting of it. The Real Estate Institute of New Zealand code of ethics states in 13.5: “Members shall never publicly criticise fellow members.” There will be an era of openness when anybody can make a complaint and have it heard. The complaints assessment committees will be set up to expedite deal with and investigate complaints and will recommend courses of action. They will be well resourced indeed and there will not be the delays that we have had with the institute. As I said before I am told that a real estate agent had a case hanging over his head like the sword of Damocles for 3 years. He was not able to have his day before the institute—his day in court as it were. That will not happen under this system. 
Then we come to the issue of costs which somebody raised. Let me just say this. I have said publicly that there are around 18000 or 20000 folk in this industry. If I was to charge them a flat fee of $500 a head to fund this whole framework which I am told is on average the equivalent fee they would pay to the Real Estate Institute of New Zealand depending on where they are in the hierarchy of the structure I would have twice as much money as I need to make this structure work. It may be that as with the Real Estate Institute of New Zealand fees now a manager might pay a slightly higher fee than an agent and a salesperson might pay a lower fee. But when the average commissions prior to last year totalled $1.2 billion and the average commission which I acknowledge has probably gone down a bit given property prices was $15000 per sale or purchase members cannot tell me that the world as we know it will end and that massive costs will be visited on the property seller or the buyer because the real estate person may pass on $500 or thereabouts to the consumer—if that is what the figure is. 
National members do not like the facts. “Old Smoko” the tumbleweed over there does not like them. A spurious case is being made to try to scare people in our communities. If we set up an independent transparent authority consumers who feel that they may have been done over can go and test their case before independents so that even if they lose their case they can feel as if they went to a court that they have had their day and that independents with no vested interest and no axe to grind have assessed their case. Opponents say that all that will be put asunder because massive amounts of money will be visited on the consumer house prices will fall costs will go up and the world as we know it will end. But it is like other professions—lawyers pay more builders with licences pay more and electricians pay more to be licensed. I say come on let us get a life! The time for scaremongering is over. National members are getting a bit desperate in respect of Part 4. Those are the facts. 
I conclude by saying this. Somebody asked what the change in the disciplinary regime will be. In the current regime there is the ability to fine somebody $750 and I note that there is no legal or moral impediment on the Real Estate Institute to pass on that small fee to the victim as dictated by the legislation but it never happens. There is the ability within the tribunal if the case gets that far to have compensation—that wonderful thing where if someone has been wronged especially in respect of his or her home a large asset that person can get compensation. The fines have been lifted as the Real Estate Institute wanted. The level of discipline has also been lifted as the Real Estate Institute wanted. The ability to set up multiple complaints assessment committees and to increase and reduce the number depending on the volume of complaints is again allowed. As Ms Wilkinson says frequently: “Justice delayed is justice denied.” Well she has a dose of amnesia when she talks about this sector. She is not worried about the delays. She is not worried that in the past very few if any complaints have been referred to the licensing board when there was the power to do so. This is a board that can fine people $5000 and throw them out. That is not enough; that is why we are changing it. But that facility is not new in legislation I say to the party that says we do not want bureaucracy and that we should use the existing legislation. When it is not used there is a problem and when we cannot compel people to use it there is a problem. I say to National Party members that what I have said addresses some of their points and I ask that we get a bit of fact back into the debate rather than all the hot air and hyperbole—or cold air in the case of Nathan Guy.