Real Estate Reform Update
20th June 2018
Leverage invited to Closed Session OFT Briefing
At the invitation of the NSW Office of Fair Trading, Leverage Academy attended a closed session briefing on Wednesday (20/6/2018), for an update on the Real Estate reform legislation, including the likely timing of the new Act coming into force.
The OFT re-confirmed many of the principal aspects of the reform legislation, covering-off on;
• the re-classification of classes of agents,
• CPD reforms,
• the abolition of certain existing categories of licence (eg. Buyer’s Agent), and;
• the transitional arrangements for existing licence holders (as well as those holding Certificates of Registration).
It should be noted however that although the new Act has been passed by Parliament, the Regulations and related Ministerial Directions (which typically contain much of the operational and transactional detail) have yet to be comprehensively decided and fully settled. In other words, the details of yesterday’s OFT briefing are not “set-in-stone” and may well be re-visited before the introduction of this reform legislation.
In regard to holders of Certificates of Registration (COR), to be know in the new regime as “Assistant Agent – Class 3”, they will receive a one-off 4 year authorisation, on their next renewal and will need to have obtained their Certificate IV qualification, before the expiration of the 4 year period.
For those agents that are currently licensed, on the renewal of their licence, they will be given an opportunity to either renew as an agent (ie. “Agent – Class 2”) or apply for the new licence category, being “Agent – Class 1”). The full criteria for approval by the OFT, to obtain a Class 1 Licence, has not yet been settled, and will be subject to the yet-to-be-completed Regulations and Ministerial Directions.
In our forthcoming newsletter, we’ll provide more details on the new CPD program that the reform legislation will usher in, including how it will impact on Assistant Agents – Class 3, Agents – Class 2 and Licensee in Charge – Class 1 Agents.
The draft timetable offered by the OFT at the briefing, noted that there would be continued industry consultation in respect of the Regulations, up to and including September this year, which is when the new National Training Framework is also foreshadowed to be completed.
As for a concrete date for the implementation of the substantive provisions of the new Act, the original dates put forward some time ago by the OFT, of July 2018 and then October/November 2018, have all been vacated, until there is more clarity around the arrival of the Regulations.
Further details of the OFT briefing will be provided in forthcoming editions of this newsletter.
Leverage is committed to remaining the front-runner in keeping the real estate sector updated with all the news coming out of the NSW Office of Fair Trading, the NSW Parliament, and the Minister’s Office, in relation to the reform legislation.
What is this about?
The NSW Government released a Real Estate and Property Services Industry Reform Paper (the Reform Paper). Submissions in response to the Reform Paper were due by 5 December 2016. These will be considered as part of the law review process.
The real estate sector is integral to the economic prosperity of New South Wales. It is estimated that the sector in NSW is worth more than $15 billion per year.
The overwhelming majority of real estate agents are hardworking individuals who bring skill and integrity to their profession. Agents routinely deal with large amounts of their clients’ money. The laws must provide consumers with sufficient protection while encouraging ethical, competent and professional conduct in the industry.
To support the professionalism of the sector into the future, the Reform Paper sets out a path to:
- improve entry standards and training requirements for the real estate and property industry
- ensure proper career pathways and professional development through enhanced continuing professional development (CPD)
- increase consumer protection measures through changes to trust accounting and higher standards of accountability
- strengthen NSW Fair Trading’s powers to take action on rogue agents.
Latest Update: 25th January 2018. Leverage has acquired a copy of the NSW Real Estate Reform draft bill and the 2nd reading speech. We have summarised the Draft Bill and written our own paper on the reforms and how they will affect you and your business. Give Leverage a call 1300 438 538.
The Bill and the Second Reading speech are available from the NSW Parliament website. Changes to regulations and guidelines which support the operation of the Bill will be developed during the course of 2018.
For more information about the proposed changes and for updates on the progress of the proposed reforms, read the Real estate and property industry reforms page or Frequently Asked Questions on the NSW Fair Trading website.