Agents’ levy increase opposed
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 reinz.co.nz.