Agents’ levy in­crease op­posed

Manawatu Standard - Property Weekly - - News -

The Real Es­tate In­sti­tute of New Zealand (REINZ) has re­acted strongly to a pro­posed 50 per cent in­crease in the levy that the Real Es­tate Agents Author­ity (REAA) im­poses on all real es­tate agents.

‘‘The REINZ is com­mit­ted to work­ing con­struc­tively with the REAA, and is sup­port­ive of the es­tab­lish­ment of a reg­u­la­tory body for our in­dus­try. [But] we can­not sup­port a large in­crease in the [levy] on an al­ready stressed in­dus­try,’’ says REINZ chair­woman Rosanne Meo.

‘‘We are very concerned about the tim­ing and quan­tum of the pro­posed levy in­crease. We chal­lenge the ba­sis of the pro­posed in­crease, and re­gard it as nei­ther fair nor rea­son­able.’’

The REAA is propos­ing to in­crease its levy from $495 to $760 a year. The levy funds the com­plaints process, the pro­vi­sion of in­for­ma­tion to con­sumers, and the li­cens­ing of peo­ple and com­pa­nies who work in the real es­tate in­dus­try.

The pro­jec­tions in­cluded in the REAA’s state­ment of in­tent, is­sued in July, show that in­come from op­er­at­ing levies and ap­pli­ca­tions for 2011 will need to more than dou­ble from $2.825 mil­lion to $6.630 mil­lion and then dou­ble again to $12 mil­lion in 2012.

‘‘We un­der­stand that the REAA in­tends to raise its levy to help off­set an as­sumed in­crease in com­plaints as well as a short­fall in in­come due to an un­planned de­cline in the num­ber of li­censees,’’ Mrs Meo says. ‘‘[But] we know that the num­ber of com­plaints has fallen from 55 a week to an av­er­age of 14 a week. And the drop in li­censees sadly re­flects the mar­ket place.’’

A re­cent, in­de­pen­dent anal­y­sis by Grant Thorn­ton showed that, when com­pared with the costs in­curred by other reg­u­la­tory bod­ies, the cost of pro­cess­ing a com­plaint through the REAA is five to 24 times more ex­pen­sive. In fact, one or­gan­i­sa­tion is able to process its com­plaints up to 72 times more cheaply than the REAA.

‘‘The cost of pro­cess­ing a com­plaint through the REAA seems high,’’ Mrs Meo says.

‘‘The eco­nomic cli­mate has placed a huge strain on our in­dus­try. The REAA’s fo­cus needs to be on man­ag­ing costs, rather than on sim­ply pass­ing on more costs through fur­ther levy in­creases.’’

The REINZ is en­cour­ag­ing all its mem­bers to make sub­mis­sions against the pro­posed in­crease in the levy, on the grounds the in­dus­try has not suf­fi­ciently re­cov­ered from the global eco­nomic re­ces­sion and the REAA should un­der­take a cost ef­fi­ciency anal­y­sis of the com­plaints process be­fore im­pos­ing any in­crease.

Con­sul­ta­tion with the in­dus­try has al­ready be­gun, and will run un­til Oc­to­ber 31.

In­for­ma­tion on how to make a sub­mis­sion to the REAA can be found at

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