Wilkinson Kate: Real Estate Agents Bill — Second Reading In Committee Third Reading 
Wilkinson Kate: Real Estate Agents Bill — Second Reading In Committee Third Reading 
[Volume:649;Page:18444] 
KATE WILKINSON (National) 
: 
 I am delighted to lead off on behalf of National in relation to the third reading of the Real Estate Agents Bill. Can I say from the outset and we have always said from the outset that we support wholeheartedly and absolutely the purpose of this bill. The purpose of this bill is to promote public confidence in the performance of real estate agency work and to protect the interests of consumers in respect of transactions that relate to real estate. The Minister mentioned before that the three most important things in real estate are consumer consumer consumer. During the Committee stage he actually said he was part of a listening Government. I would just like to put on the record that the Hon Peter Dunne had some very sensible and practical amendments to this legislation that National did support. One of those suggested amendments was that the authority must consult with the industry training organisation for the real estate industry. The second one was that the qualifications—the experience of real estate salespeople—should not be 2 years out of 10 years or as amended by the Minister 3 years out of 10 years but 5 years out of 10 years. That is to protect the consumer. That is all about the consumer. There was nothing subversive about that nothing radical about that but did the Government members listen to that? No they did not. They ignored it completely. 
This bill should have been an easy bill. This is not an industry that was dragged kicking and screaming—to quote the Minister—to reform. This was not that situation at all. The industry itself has been asking for reform for over 10 years. Yet the Ministers of the day said that it was not part of their policy priorities. The industry had been saying for 10 years that it wanted reform. Mr Dunne mentioned two matters that could quite easily have helped the situation and protected consumers. One was to actually put in place the regional disciplinary committees. They are already provided for under the existing legislation. What did the Minister do? He had the opportunity and he had the power. In fact he was empowered to appoint lay observers on that committee and to validate that committee. For more than 10 years he did not do so so we did not have any regional disciplinary committees to deal with some of those complaints at that early stage to expedite the complaint process. 
The other suggestion and again the industry had been asking for it for over 10 years was to increase the amount of the fines; $750 admittedly was not sufficient. The industry did not think it was sufficient the Government did not think it was sufficient we did not think it was sufficient but for 10 years or more the Minister had been approached by the industry. The Government has had four official approaches in the last 10 years by presidents and others of the real estate industry to address these matters and what did this Government do? It did absolutely nothing until this Minister decided he would go on a real estate crusade and talk about land sharks in the industry talk about carnage and talk about cowboys—he decided that this would be his crusade. 
Well we now have a bill at its third reading. The National Party minority report—and we did do a lot of work during the select committee process—actually expressed some concerns. It is at least satisfying to some extent that some of our objections have been addressed. The uncertainty created by the 5-year review of the employment status of real estate agents has been addressed. That is no longer hanging over the heads of salespeople not knowing whether they are employed or self-employed. There is still the issue that has to be addressed between what is meant by supervision as opposed to effective control under the existing legislation which has been tested in the courts. Now we have new phrases and I am sure they will be tested in the courts as well. 
The auctioneers provisions in this bill had a bidders record and it was the most unrealistic impractical section of legislation that I have seen for a long long time. Thankfully again that was taken out of the bill by a Supplementary Order Paper of the Minister and so it should have been. Who on earth would want to have to keep a bidders record for 3 years even before a bidder knew he or she was going to bid because it might be a spur of the moment bid for a property and the vendor wants to get the best price and he or she had to produce identification—had to produce a passport. Now who takes a passport along to an auction if he or she wants to buy a property? Thankfully— 
Simon Power 
: They could take one of those new ones of Rick Barker’s! 
KATE WILKINSON 
: Oh one of the microchip ones; maybe that would work. But thankfully that provision was also deleted. 
This bill is about consumer protection and it should be about consumer protection. But it should also be about making responsible law and certain law. Now I asked the Minister and I had to ask him about five times during the Committee stage what the definition of residential property was because that is very important and it is actually covered several times in the bill. I said: “Are lifestyle properties included or not included in the definition of residential property?”. That is material to whether the client can cancel a sole agency agreement. Finally after the fifth question he did say that yes it is. The reason I asked that question is that I wanted an assurance. Believe it or not some people actually read the  
Hansard 
 transcripts to get some idea of what is intended by the legislation and by the parties in this House. I wanted it recorded in  
Hansard 
 that the Minister intended by his legislation that lifestyle properties would be defined and included in the definition of residential property. Although that might seem a small matter it is not a small matter if one has a vendor client who has the uncertainty of not knowing whether his or her lifestyle property is residential and cancels one sole agency agreement and enters into another and suddenly finds out that his or her property does not come within that definition it is not excluded and therefore he or she has to pay two commissions. That on the ground is one of the very practical things that has to be addressed by this bill. 
We also heard the definition of real estate agency work and the definition of transaction and the situation regarding shares and whether for example a rural property owned by a company which the parties decide to sell by way of shares rather than by way of real estate would be caught by this bill. We have had no clarification whatsoever. This bill still leads to a lot of uncertainty and uncertain law is not good law whatsoever. 
Property management is not included in this bill. We have heard arguments that it comes outside the scope of the bill but that did not seem to matter with KiwiSaver in relation to the meal breaks bill. Even though it was outside the scope it was included. So why is it not included here? Property management is an integral part of the real estate industry. We heard that the only claims in recent years against the fidelity fund were in relation to property management. We have seen in the headlines the scenario with Blue Chip. Property managers have more opportunity to misappropriate funds than do real estate agents because of the length of time that the money is held in their trust account. Now that property managers are not regulated they do not have to have a trust account and they do not have to be audited. In fact one real estate agency in Christchurch said that this will save it $10000 a year in agency fees. And this is supposed to be legislation for the protection of the consumer! This is not legislation for the protection of the consumer. This bill waters down that protection of the consumer. Property management is such an integral part of real estate that it should have been included. I think it is negligent that it is not included. 
Can I just finish by saying that of course we support legislation that protects the consumer. Of course we support legislation to reform an industry when that industry itself wants it and needs it and the consumer wants it and needs it. But this legislation does not do that. This legislation is a missed opportunity. It is a disappointment and it is a missed opportunity because of the attitude of some Government members and in particular of the author of the bill. I think that is sad because we do not have workable legislation and at the end of the day the consumer will not be more protected by this than under the existing legislation.