New property manager regulation on its way

The government will require property managers to be licensed and abide by standards.

The proposal released today by associate minister of housing Poto Williams will impose a regulating regime on the previously unregulated property management sector. The measures were released for parliament consultation after the party first committed to the issue in 2020.

Williams said that the government is committed to improving the wellbeing of all New Zealanders and housing plays a fundamental role in that.

“We have heard the calls of the sector, which has said the lack of regulations means renters feel reluctant to complain to, or about, their property manager for fear of losing their homes or jeopardising their ability to rent houses in the future,” she said.

“Today’s proposals are part of a suite of initiatives designed to improve the operation of the residential tenancies market and ensure New Zealanders have access to secure, healthy, and affordable housing,” Williams said.

New Zealand is one of the only countries in the OECD that does not regulate property managers.

According to the government, renters are not the only ones impacted by malpractice, and bad management conduct could impact property owners as well. The government is aware of some unregulated property managers misusing rental income and bonds, as well as providing little to no maintenance or checks for property, Williams said.

Industry reaction

President of the Auckland Property Investors Association, Kristin Sutherland said that property managers play a really important role in the sector, both for landlords and tenants, and the association supports the new proposal.

Sutherland said the increased professionalism regulation would bring to the industry would be welcomed by landlords.

A previous survey of members indicated 62% were in favour of property manager regulations, she said.   

She said landlords feel they are still liable for the actions of their property managers and recently there has been an increased number of queries to the association regarding Tenancy Tribunal hearings and private disputes between property managers.

Sutherland would like to see training focused on knowing the legislation well and being able to properly manage that to protect both the interests of landlords and tenants.

Today's proposal outlines complaints could either go through the REA Disciplinary Tribunal or to the Tenancy Tribunal. Sutherland would like to see more information about the complaint process the government has in mind, and feels the Tenancy Tribunal is already overworked. Regardless of what one is chosen, she would like to see it appropriately resourced.

The Real Estate Authority said it already receives a lot of complaints about property managers.

The authority’s chief executive Belinda Moffat said the authority could only look at complaints about property managers if they were also real estate agents. In those cases, the authority could only act if the conduct was serious enough to meet the threshold for “disgraceful conduct”.

Political reaction

The Green Party welcomed the proposal but was also concerned for renters. The party said it would like to see a landlord and property manager register be implemented.

“While today’s discussion document is a concrete proposal of government options, we’ve spent far too long discussing renters’ rights in this country and far too little reflecting them in law,” said Chlöe Swarbrick, Green spokesperson.

Swarbrick said the country was “lightyears behind where we should be” and it’s “time to get on with it,” noting parliamentary discussions about standards as far back as 2008.

The Property Institute declined to comment on the new proposal. 

Consultation will run until April 19, and the measures are expected to be introduced to parliament in 2023.