I was genuinely shocked and deeply disappointed by the news released on the 30th of April 2024 under the headline: “Residential Property Managers Bill to not progress.” You can read the full press release here: https://www.beehive.govt.nz/release/residential-property-managers-bill-not-progress.
Just a week prior, I was interviewed with hesitant optimism that this Bill would progress through Parliament this year. Now, it has been swiped away without any proper and due process. I submitted against the former Labour Government deregulating our services, and I stand firmly against the current Government’s decision to abort years of collective effort to return appropriate regulation to Property Management and Rentals in New Zealand.
The bill would have established a regulatory regime for property managers, including minimum entry requirements, professional standards of practice, and a complaints and disciplinary process.
“In an industry where a modest one-person property management business can oversee assets totalling $60 million in retirement savings, it is inconceivable that such a significant sector remains unregulated,” REINZ CEO Jen Baird said. “No other profession handling assets of this magnitude operates without oversight in New Zealand.”
Still, many landlords I speak with simply have no idea that property managers in New Zealand are not bound by any minimum training requirements, are under no obligation to operate professional trust accounts, nor are their staff subject to any mandatory training or vetting processes.
The truth of the matter is that rent and bond fraud is not uncommon. Having no safeguards for client funds puts landlords and tenants at risk. Renters United spokesperson Luke Somervell told Morning Report the current situation was akin to the Wild West, leaving renters exposed to rogue operators.
Before you can get a license to undertake real estate agency work* in New Zealand, you need to meet certain criteria and obtain either a prescribed qualification or a property degree. When you apply for or renew your real estate license, you must consent to a criminal conviction history check. This allows the Real Estate Authority to ask the New Zealand Police Vetting Service for any information about you that could affect your eligibility to work in real estate. You must also be evaluated as a fit and proper person.
The purpose of the ‘fit and proper’ person evaluation is to ensure that real estate licensees can be trusted to meet the duties and obligations imposed on them in the Act and Code of Conduct. Being a fit and proper person means meeting a certain standard of conduct and character.
How could this not be equally, if not more important when considering the role of a property manager? Moreover, when you acknowledge how closely we engage with a person’s private information when granting a tenancy and the ongoing access of a property manager to that tenanted home, including unaccompanied property inspections, managing repairs and maintenance, and potentially serious related matters of health and safety.
The need for landlords to have confidence in the professional management of their assets is paramount. In New Zealand, it is often the case that the purchase of rental property is the result of a lifetime of saving and now forms a key component of our landlord-clients’ self-sufficient retirement and inheritance planning. If this is mismanaged, the consequences could be devastating.
Goodwins’ team is entrusted to manage property with a total value exceeding $1.50 billion. By no measure are we the biggest. But you can rest assured that we take this responsibility very, very seriously.
We operate professional trust accounts, voluntarily adhere to the Real Estate Institute of New Zealand’s Code of Conduct, offer our clients a service guarantee, engage our staff in regular, high-level training programs, and fund our team to attend national training conferences. For absolute certainty, Goodwins carries a certificate of currency for professional indemnity insurance with a General Liability claim value of up to $5,000,000.
If you are as concerned as we are about the lack of regulation in our industry, we encourage you to reach out to your local MP and express your support for establishing proper standards for property management. If you have any questions or need advice, please do not hesitate to contact us.
* real estate agency work or agency work—
(a) means any work done or services provided, in trade, on behalf of another person for the purpose of bringing about a transaction; and
(b) includes any work done by a branch manager or salesperson under the direction of, or on behalf of an agent to enable the agent to do the work or provide the services described in paragraph (a)
transaction means any 1 or more of the following:
(a) the sale, purchase, or other disposal or acquisition of a freehold estate or interest in land:
(b) the grant, sale, purchase, or other disposal or acquisition of a leasehold estate or interest in land (other than a tenancy to which the Residential Tenancies Act 1986 applies):
(c) the grant, sale, purchase, or other disposal or acquisition of a licence that is registrable under the Land Transfer Act 2017:
(d) the grant, sale, purchase, or other disposal or acquisition of an occupation right agreement within the meaning of the Retirement Villages Act 2003:
(e) the sale, purchase, or other disposal or acquisition of any business (either with or without any interest in land).
