Published 13 October 2010
The Real Estate Agents Authority has proposed a 50% levy increase for all real estate agents, and the Real Estate Institute reacted strongly to it yesterday.
Consultation with the industry began on Monday and runs until Sunday 31 October.
The projections included in the new authority’s statement of Intent show income from operating levies & applications for 2011 will need to more than double – from $2.8 million to $6.630 million – and then double again to $12 million in 2012.
The authority, a statutory organisation, has taken over licensing of real estate agents from the institute.
Institute chairman Rosanne Meo said yesterday the institute was committed to working constructively with the authority and supported the establishment of a regulatory body for the industry. But she added: “We cannot support a significantly large increase in levies being imposed on an already stressed industry.
“We are very concerned about the timing & the quantum of the proposed levy increase. We challenge the basis of the proposed levy increase and regard it as neither fair nor reasonable.”
The authority is proposing to increase levies from $495 to $760/year. The levy funds the complaints process, the provision of information to consumers and licensing people &companies who work in the real estate industry.
Mrs Meo said: “We understand the authority intends to raise their levies to help offset an assumed increase in complaints as well as a shortfall of income due to an unplanned decline in the number of licensees.
“In fact, we know that the number of complaints has fallen from 55/week to an average of 14/week and the drop in licences sadly reflects the marketplace.”
She said an independent benchmarking analysis undertaken recently by Grant Thornton showed that, when compared to other regulatory bodies, the cost of processing a complaint through the Real Estate Agents Authority was 5-24 times more expensive. “In fact, one organisation is able to process its complaints up to 72 times cheaper than the authority.
“The cost of processing a complaint through the Real Estate Agents Authority seems high. The economic climate has placed a huge strain on our industry. The authority’s focus needs to be on managing costs rather than simply passing on more costs through further levy increases.”
The institute is encouraging all its members to make submissions against the proposed increase in levies because, it said, the industry hadn’t sufficiently recovered from the global economic recession and wanted the authority to undertake a cost-efficiency analysis of the complaints process before any increase.
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Attribution: Institute release, story written by Bob Dey for the Bob Dey Property Report.