Real estate and property services industry reforms

What is this about?

On 6 November 2016, the NSW Government announced reforms for the real estate and property services industry as explained in the Real Estate and Property Services Industry Reform paper.

The aims of the reforms include raising professional and educational standards in the industry, improving the skills of agents and streamlining the licensing system.

To implement the reforms, the NSW Government proposes to introduce:

• the Property and Stock Agents Amendment Regulation 2019 (Amendment Regulation)
• the Property and Stock Agents (Qualifications) Order 2019 (Qualifications Order)
• new Continuing Professional Development (CPD) requirements.

The Qualifications Order will replace both the Property, Stock and Business Agents (Qualifications) Order 2009 and the Property, Stock and Business Agents (Auctioneers Qualifications) Order 2009. The Qualifications Order sets out the qualifications needed to issue a licence or certificate of registration, or the accreditation of an existing licensee as an auctioneer.

The Continuing Professional Development (CPD) requirements will replace the current Director-General’s Guidelines for CPD. The new CPD requirements will be a more straightforward set of strict requirements and have been improved to ensure that agents are being properly trained.

What has happened so far?

In March 2018, NSW Parliament passed the Property, Stock and Business Agents (Property Industry Reform) Act 2018, which:

• streamlines the current licensing system
• enhances accountability and transparency of agents, including how to manage potential conflicts of interest
• strengthens Fair Trading’s disciplinary powers to suspend a licence.

Since the Act was passed, the Better Business Reforms of 2018 introduced further changes including:

• one, three and five year licence terms (not yet commenced)
• clarifying the obligations of licensees and auditors in relation to trust accounts (commenced on 1 July 2019).

The NSW Government has worked closely with key industry representatives to develop the draft Amendment Regulation, draft Qualifications Order and draft CPD requirements.

What are the changes?

Key provisions in the draft Amendment Regulation include:

• functions that may be exercised by different classes of licence and certificate holders
• the kinds of facts an agent must disclose to a potential buyer
• further rules of conduct including requirements to disclose fees and charges
• the requirement for real estate and stock and station agents to obtain a minimum of three quotes for property maintenance or repair work, except in certain circumstances.

The Qualifications Order will set out the qualification requirements for a person to be eligible for a licence or certificate of registration to work as a licensee in charge, licensed agent or assistant agent. It also sets out transitional arrangements to enable current certificate and licence holders to continue working with their existing qualifications.

The draft Qualifications Order recognises courses nationally accredited by the Australian Skills Quality Authority (ASQA), including the CPP41419 Certificate IV in Real Estate Practice introduced as part of a new national training package on 20 March 2019.

Further information about the national training package is available at www.training.gov.au.

The new CPD requirements divide CPD into compulsory and elective topics and specify the hours of CPD that licensees and certificate holders need to complete each year. It also establishes recordkeeping procedures and requires each agent to submit evidence of CPD completion to Fair Trading.

Next steps

You are invited to review the draft Amendment Regulation, draft Qualifications Order and draft CPD requirements to provide feedback.

An explanatory paper accompanies the draft documents to help readers understand how these different elements will work together in practice.

Consultation will be open from 4 September 2019, until close of business on 2 October 2019. All comments will be carefully considered and all potential options assessed before finalising the draft documents.

The NSW Government proposes to commence all new laws, including the CPD requirements, together on 23 March 2020.