Despite the Government’s decision not to proceed with legislation regulating property managers, one firm has committed to meeting the same standard that would have been required under such legislation
Fixated on increasing housing supply, Housing Minister Chris Bishop has ruled out any plans to regulate the property management industry.
“The previous Government’s analysis of the Bill showed that the cost-benefit analysis was very marginal. The analysis also noted that even those marginal benefits were highly uncertain, with the most certain aspect being the costs,” he says.
The Auckland Property Investors Association (APIA) says while the Government’s focus on improving housing supply and lowering rental costs is commendable, enhancing consumer protection in the property management sector is long overdue and should not be overlooked in the pursuit of broader housing policy objectives.
It says the absence of professional standards in the property management industry poses significant risks to both tenants and landlords and the decision comes as a blow to efforts aimed at ensuring consumer protection in the residential renting space.
APIA believes that holding property managers to professional standards is essential to safeguarding the interests of all stakeholders involved in the rental market. Without such regulations, APIA says tenants and landlords alike may face substandard services, financial risks and legal complications.
“Property managers play a pivotal role in representing and balancing the interests of landlords and tenants. We need serious professionals, not people who are there to clip the ticket and treat everyone like numbers,” says Sarina Gibbon, general manager of the APIA.
Sharing this view is Rishabh Kapoor, former tax lawyer and CEO of Impression Real Estate, which manages around 1,000 rentals in the Auckland region.
He says while the Government has abandoned plans for regulation, it is critical the industry adopts a level of self-regulation to help restore investor confidence.
“There are a number of property managers out there working out of the back of their car who simply don’t understand the industry’s requirements and legalities. The downstream impact of this is that it can result in thousands of dollars worth of damage for owners and as a result, they often want to exit the rental industry,” Kapoor says.
“The Residential Property Managers Bill would have changed that by ensuring property managers were licensed, well trained, and subject to a complaints and disciplinary process if they don’t adhere to industry standards.
“Other investment sectors already have similar protections around advisors and we need a way of signalling to the market that residential property management is no longer operating like the Wild West and their multi-million dollar investment has appropriate safeguards,” he says.
Kapoor’s firm is aiming to become the first in the market to have all property managers independently certified to the same level four standard that was to be introduced under the Residential Property Managers Bill. They will also increase transparency by mapping their processes and displaying them on their website so property owners can understand how they structure their approach.
He says introducing a minimum training standard will provide the same reassurance for investors as would have been present under the Bill.
“At the moment a real estate agent, who you have a relatively transactional relationship with to sell your home for just a month, is held to a higher level of regulatory oversight than a property manager renting the dwelling on your behalf – who you might work with for decades.
“We believe it is possible to replicate the standards that would have been provided by the recently abandoned regulation. Property managers are subject to the same consumer legislation that other industries however without the regulation it is harder to hold them to account,” he says.
