The Victorian Government has announced its decision to exempt large commercial property agents from requiring licences, despite strong lobbying against the exemption from the Real Estate Institute of Victoria.
The exemption allows agents to deliver commercial real estate services without obtaining a Certificate of Registration or Licence or completing further education.
Although the NSW Fair Trading Minister Matthew Mason-Cox was against the proposed exemption in NSW, Fair Trading is not taking action against the exemption across state lines.
A spokeswoman for NSW Fair Trading told the Australian Financial Review that they had received proposals from industry stakeholders to “exempt certain commercial work” from existing regulations and they were aware of progress made in other state jurisdictions “but [NSW Fair Trading] does not plan to amend or review the legislation at this point in time”.
Shopping Centre Council of Australia Chairman and CEO Steven Sewell said the decision was a “welcomed announcement”.
“The Victorian real estate licensing regime is a cost burden on our sector, and teaches our sector nothing about how to own, manage or lease a shopping centre,” Mr Sewell said.
“As major investors, the cost and administrative burden of the current licensing regime outweighs any benefits. Commercial agents, including our own members such as Jones Lang LaSalle and Savills, will continue to play a major role in our sector in terms of leasing, management and transactions.”
The Victorian Government decision dealt a bitter blow to REIA and REIV, both of which had campaigned hard against the exemptions. They argued they would expose buyers and businesses to “unacceptable risk, which licensing is designed to mitigate”.
Victorian exemptions will begin in July 2015 and apply to transactions, including leases, where the property is worth $15 million or more or is bigger than 10,000 square metres.
Later this month, the Victorian Government will consider expanding the current licensing exemption to include commercial property transactions between related companies. In Queensland, exemptions for large commercial transactions and those between related parties are due to begin later this year.
Similar plans for the deregulation of commercial licensing were recently reversed in NSW following strong lobbying from REINSW.
“The licensing regulations were established to protect consumers and other third parties,” REINSW President Malcolm Gunning said.
“We consistently oppose any proposal where due process has not been followed and which allows inexperienced, unqualified and unlicensed operators to practise real estate.
“REINSW demonstrated to the NSW Government that there would be an adverse effect on the confidence of investors in the market, and the Government realised that these measures would tarnish the integrity and reputation of the real estate profession, industry and market.”