Complaints pertaining to a variety of property matters worth hundreds of thousands and even millions of dollars can no longer be left to state governments and police to oversee. We shouldn’t leave looking after our interests in property matters to Consumer Affairs Victoria.
The banking, financial services, insurance and the telecommunications sectors all have ombudsmen for good reason, so if it’s appropriate for those sectors, it is also appropriate to protect consumers investing in the real estate sector in the same manner.
With underquoting being a massive problem in NSW and Victoria, but with negligible enforcement of the regulations from CAV, now is the right time to appoint a real estate ombudsman.
While the NSW Premier pledged a crackdown recently on rogue real estate agents who underquote, the newly elected Victorian government is still mute in regards to this ongoing problem in Victoria. It seems the financial and indirect marketing support the Labor government received from the Real Estate Institute of Victoria during the election campaign last year has rendered it deaf and blind to the problem.
Underquoting is a bipartisan issue as it affects all consumers. Both sides of politics need to work together to develop a solution to this problem. This includes making amendments to legislation to close loopholes which perpetuate underquoting and much stricter and more regular enforcement of these regulations.
However, with consecutive Victorian governments doing nothing about underquoting over the last 10 years and industry representatives continuing to deny that underquoting even exists, ignoring consumer sentiment in the process, we can’t delude ourselves into thinking that will change any time soon.
Currently those rogue agents who breach regulations often do so because they have an exceptionally high chance of getting away with illegal activity simply because CAV doesn’t have adequate skilled staffing to police it or a satisfactory complaint handling process. Given this and the 30,000-plus auctions held in Victoria every year, the onus of investigation, policing and enforcement needs to be removed from CAV and handed to an independent body in the form of a real estate ombudsman.
By establishing an independent board of consumers and real estate industry representatives that prides itself on objectivity, integrity and transparency in all aspects of its operations as does the Financial Ombudsman Service, the industry may be able to improve its poor reputation among the public. After all, transparency and trust are conjoined twins.
It could also be partly or completely funded from the Victorian Property Fund, which is intended for use for compensation for claims against rogue estate agents anyway.
A positive side effect of the appointment of an ombudsman could be the lifting of the disturbingly low barriers of entry to the industry and going back to what used to be a more stringent criteria to qualify to work as a licensed estate agent.
An independent board will also negate any influence any industry group or body may attempt to exert over current or future state governments.
And, of course, the majority of estate agents who are ethical, professional and act with integrity, would have nothing to fear from the appointment of a real estate ombudsman.