Friday 14th November 2014
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Real Estate Institute chief executive Helen O’Sullivan wants to see pre-purchase building inspections regulated, a standard set for methamphetamine testing, and property managers to come back under the Real Estate Industry Authority.
O’Sullivan, who is leaving the institute in February to take on the role of chief executive for Auckland apartment developer Ockham Residential, said there were still several issues that needed to be dealt with in the property industry to improve the information buyers had before making a purchase and better protect landlords from those managing their properties.
She would like to see the pre-sale information required from vendors beefed up as it is in some Australian states to cover all aspects of the property although in the US some states had gone too far by including things such as whether there were noisy neighbours or barking dogs.
One of the biggest issues was getting consistency in pre-purchase building inspections which didn’t have to meet any standard and the practitioners weren’t required to be licensed, she said.
“This has been a big issue with leaky homes and there have been lots of cases where vendors and purchasers have been misled.”
The Building Officials Institute of NZ, which is a voluntary not for profit, does provide a building surveyor accreditation. But REINZ wants it to be mandatory for building inspections to meet an audited standard that sets out the procedures required and also for building inspectors to have professional indemnity insurance in case purchasers later discover problems with their house.
“You have a guy who’s been building for 20 years and then buys a thermal imaging camera on the internet and sets up as a building inspector with a limited liability company and no professional indemnity cover. When his reports are found to be not that flash, he is nowhere to be found.”
O’Sullivan said REINZ had also written to government ministers calling for a standard agreement on what constitutes proper methamphetamine testing of houses suspected of having been used as P labs so those paying for them can rely on the quality and consistency of the results.
Another issue she’s concerned about is property management which was deregulated under the 2008 changes to the Real Estate Act. Many real estate agencies have a property management arm which comes under regulation of the REAA as part of their agency licence but others don’t face the same oversight, she said.
Anecdotally there had been a number of cases where property managers have absconded with landlords’ money, but few complain about it to the police because of the relatively small sums involved, she said. “Cumulatively, it mounts up.”
REINZ wants to see all property managers come under the REAA, a requirement for rent money to be kept in trust accounts, and some method of registration so that those who do transgress can’t just easily pop up again in the market somewhere else.
O’Sullivan recently announced her resignation from the 13,000-member voluntary institute after four years at the helm. She said she had been surprised at the amount of media commentary required in the role but puts that down to kiwis’ love affair with property.
“New Zealand has three religions – rugby, racing and real estate.”
She, for one, dismisses talk of a looming housing bust in New Zealand where property is said to be over valued. “There would have to be a trigger for it.” Most people would simply hang on to their properties and keep paying the mortgage if values dropped significantly below what they paid, she said.
Auckland needed to keep increasing supply to meet growing migration by building up and out. When supply meets demand, prices tend to stabilise, she said.
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