Yes, I am back on my soapbox!

Government neither cares nor wants small business to succeed.

Successive governments of different persuasion continuously tell us that they are for small business.

Total and utter bullshit!

The new Property and Stock Act 2002, seems to be corporatising the Real Estate, Strata and Stock and Station industry.

The licencing structure was set up as follows:

  • At the apex, you will have a Licensee-in-Charge (Class 1);
  • Under this will be Licenced Agents (Class 2); and
  • Under those will be Assistant Agents (Class 3).

It was clear from the outset that Fair Trading had created a hierarchical structure for the real estate industry. This is fine if you’re big enough, but it is not in accordance with the “cottage industry” that is the vast majority of the real estate industry.

Last week, the Real Estate Institute published that they have partnered with Fair Trading to create higher standards within the industry. This is the first time it has become clear that the REI have driven this agenda for their own benefit. The REI in NSW has regularly been accused by participants in the industry as representing the interests of the larger agencies. In other words, their membership, their board members, and their bias, is towards the big end of town and the larger corporations.

This has proven true in a meeting with Registered Training Organisations over the last week. In response to a comment from the floor that Fair Trading is killing off the smaller operators that make up the bulk of real estate offices, the Fair Trading presenter (who will remain nameless) seemed unperturbed. The attitude seemed to be that if you are too small to deal with compliance matters, perhaps it’s best that you exit the industry and shut down ! Fair Trading stated pointedly that they are requiring the Licensees-in-Charge to do much more in the way of compliance and to show greater supervision. The best way that this can be done is an organisation which is designed for quality compliance standards.

We were a little bit perplexed regarding these Fair Trading sentiments. The Property and Stock amendments did not change Section 32 (Proper Supervision). It retained it in its current iteration. Moreover, the decision of Davidson indicated that proper supervision meant that a Licensee-in-Charge needed to accurately oversee the accurate execution of duties of their staff.

I ask then, “What higher standard would you want for a Licensee-in-Charge, beyond the accurate execution of duties?”

It is not about compliance. This is a barrier established by the Real Estate Institute and Fair Trading to create larger business within Real Estate. Do I believe that these bigger organisations will be more compliant ? Just ask the Royal Commission into banking ! They are definitely more compliant!

If the government doesn’t want small business, can they just tell us?

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au