Property manager regulation a ‘when, not if’
A battle is brewing between property managers who favour regulation and those who want the status quo.
Property managers have been getting bad publicity recently after a branch of property management firm Quinovic was criticised for a set of advertisements, and by grumpy former tenants for past treatment.
David Faulkner, who is a director of property management consultancy Real IQ, says it’s a case of ‘‘when the regulation of our industry will happen, rather than if’’.
‘‘Our industry has taken an absolute hammering over recent times. Yet in spite of this, I remain optimistic that good will come out of all the bad publicity ... There is now a strong sense that change is coming.’’
Faulkner said an explosion in small, unqualified property managers went back eight years, when real estate agents were regulated but property managers were left out.
As a result, property managers were no longer required to have a real estate agent’s licence.
‘‘Now we’ve got an industry that is dominated by very, very small companies.’’
Faulkner said at the time, most complaints about the industry concerned property managers and it was decided that the newly formed Real Estate Agents Authority (REAA) couldn’t handle them all.
Since then, standards had dropped. ‘‘Deregulation of our industry has failed.’’
While the Government has deferred any decisions about property manager regulations, Faulkner would still like to see complaints handled by the REAA, not by industry bodies.
He said that if the Independent Property Managers Association (IPMA) or its sister organisation, the Property Institute, was put in charge of property managers, the industry would be ‘‘split in two’’.
Big real estate companies that belonged to the Real Estate Institute of New Zealand (REINZ) but also operated property management businesses would have torn loyalties.
‘‘It has to come under the one umbrella and the best people to do that is the REAA.’’
However, another property manager, Keith Powell of Nice Place Property Management, said only 34 per cent of private rental properties in New Zealand were managed by a property manager.
‘‘The other 66 per cent are managed by owner-operators and they’re the ones who don’t know
the rules. Regulation needs to be regulation of landlording, not just property management. Then we’ll get some real traction . . .
‘‘If we’re only going to regulate property managers, you’ll just see rents increase and you won’t see any real benefits.’’
Asked whether self-regulation was possible, Powell said: ‘‘I don’t think that regulation imposed by the Government ever improved
anything.’’ It had not made much difference to real estate agents, he added.
‘‘We’ve still [got] huge cases of real estate agents ripping the system off, rorting the system, doing dishonest things.’’
A spokeswoman for Housing Minister Phil Twyford said the minister had decided to deal other issues first, including a ban on letting fees.