Forwards or backwards? REINSW responds to NSW Fair Trading's proposal to de-license auctioneers
3 September 2018

In July 2018, NSW Fair Trading issued the Consultation Paper, Easy and Transparent Trading – Empowering Consumers and Small Business

The Consultation Paper was produced in response to a detailed review of legislation regulated by NSW Fair Trading and SafeWork NSW by the Department of Finance, Services and Innovation. The proposals intend to remove unnecessary administrative and regulatory burdens, making it easier to do business in NSW.

The proposals in the Consultation Paper relevant to real estate agents, include:

  • The removal of real estate auctioneer licences
  • Removing categories of home building licences
  • The repeal of redundant legislatio
  • A review of Continuing Professional Development requirements
  • Rental bond surety products
  • Allowing strata lot owners to choose their own utility providers
If it is not broken, don’t fix it

REINSW recently prepared a Submission in response to the Consultation Paper, outlining the absurdity of the proposals and their potential impact on the property services industry and consumers.

“I’d like to know what problem NSW Fair Trading is trying to solve with these proposed changes,” says REINSW CEO, Tim McKibbin. 

“REINSW is heavily involved in the Government’s drive to improve professionalism, standards and credibility of the property services industry. 

“The foundation of a profession is education at the point of entry and on-going as a condition of licensing. Has NSW Fair Trading considered the consequences the proposed changes will have on the push to professionalise the industry for the benefit of practitioners and consumers?”

De-licensing auctioneers

Of great concern to REINSW is the proposal to remove real estate auctioneer licences. 

Unfortunately, this is not the Government’s first attempt at this. 

Under the Statute Law (Miscellaneous Provisions) Act 1993 (NSW), the Property, Stock and Business Agents Act 1941 (NSW) was amended to remove the need for auctioneers to hold a licence to trade. 

Not surprisingly, de-licensing auctioneers led to many issues. On 1 September 2003, the Property, Stock and Business Agents (Auctioneers Qualifications) Order commenced, reintroducing licensing requirements for auctioneers. 

“Considering the Government’s previous failure with de-licensing auctioneers and the time and resources invested in reintroducing the licensing requirements, I’m perplexed as to why they think it’s a good idea to go down the same path again,” says McKibbin.

“Before the Government starts ‘solving problems’ by de-licensing a service provider, it should determine whether there is actually a problem to solve.”

Training reforms will damage the credibility of the profession

Education and awareness of an auctioneer’s obligations help prevent non-compliant activity that may expose the vendor to legal action or damages. It also equips auctioneers with the skills and knowledge to identify and address issues, such as dummy bidding and collusive practices. 

“De-licensing auctioneers is counterproductive to REINSW and industry efforts to improve compliance, transparency, accountability and professional conduct in the real estate sector,” says McKibbin.

“It will undermine REINSW’s push towards improving education standards and professionalism of the industry.”

Obligations of auctioneers 

The legal obligations and responsibilities of auctioneers are referred to in the Property, Stock and Business Agents Act 2002 (NSW) (PSBA Act) and the Property, Stock and Business Agents Regulation 2014 (NSW).

The proposed changes suggest transferring the obligation for auction compliance from the auctioneer to the agent.

Clarence White, and experienced real estate auctioneer believes this will result in non-compliant auctions and consumer dissatisfaction.

“Many selling agents don’t know or understand the obligations of an auctioneer outlined in the PSBA Act. Or what an auctioneer can and can’t do, and their limitations,” he says.

“It is my practical experience that it is nearly always the auctioneer advising the agent regarding compliance on auction day, not the other way around. 

“The proposed changes are a recipe for disaster. If the Government thinks all selling agents across the industry are well versed in auction day compliance, respectfully, they are mistaken. Some are, many aren’t.”

This raises the question, in a de-licensed environment, who is responsible for conducting a compliant auction and who is responsible when issues arise? 

Consumers will suffer

REINSW opposes de-licensing within any area of the property services profession.

In a de-licensed environment, there is no requirement for probity checks of service providers and no training or ongoing skills assessment. 

Without the requisite competencies, knowledge and skills required to deliver service, consumers will be exposed to significant risks and the industry and profession will sustain irreversible damage.

“The proposed de-licensing is likely to severely impact the quality of services offered to the consumer,” says McKibbin.

“This will lead to an increase in non-compliant and non-binding sales that consumers are left to deal with.

“The purpose of licensing laws is to ensure auctioneers deliver their services in a competently and regulatory compliant manner. The proposed de-licensing is a reckless proposition that threatens the protection consumers currently enjoy.

“This is yet a further example of the bureaucrats at NSW Fair Trading – who have absolutely no skills or experience with the property services industry – making stupid decisions. Once again, REINSW is called upon to rescue the consumer from NSW Fair Trading.”

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