Residential Property Managers Bill

Residential property managers in New Zealand manage approximately 42% of all the residential tenancy market. The Residential Property Managers Bill (the Bill) establishes a regulatory regime that is designed to improve residential property management services throughout New Zealand.

Harcourts are delighted to advise that this Bill has now passed its first reading and has been sent to the Select Committee stage. The Select Committee will be open for submission until 12th October and Harcourts will continue our advocacy on behalf of our network and continue to support the excellent work that the Real Estate Institute of New Zealand has done to get this Bill to the Select Committee stage.

The aim of the Bill is to protect the interests of property owners and tenants, including prospective tenants, through a regulatory regime by:

Establishing minimum entry requirements for residential property managers;
Ensuring that residential property managers meet professional standards of practice;
Providing accountability by establishing an independent, transparent, and effective complaints and disciplinary process, that applies to residential property managers and the delivery of residential property management services.

This regime excludes private landlords, Kainga Ora and registered community housing providers.

The Bill establishes a regulatory regime for the licensing of residential property managers and Residential Property Management Organisations (RPMOs). The Real Estate Authority (REA) will be the regulator for the new regime and key aspects will be:

The REA will appoint a Registrar for the register of licensees. The register will allow the public to access key nformation about licensees, to establish the currency and class of a licensee’s licence, and establish whether any recent disciplinary action has been taken;
The Registrar will be responsible for issuing residential property manager licences and RPMO licences. RPMOs will be responsible for the provision of residential property management services through the residential property managers they contract or employ;
Applicants must meet minimum entry criteria before qualifying for a licence, which include meeting a fit and proper person test, and not being a person prohibited from being icensed under the Bill;
The REA will establish a code of professional conduct and prescribe continuing professional development requirements;
Complaints of a licensee’s unsatisfactory conduct or misconduct may be referred to a Complaints Assessment Committee or the Real Estate Agents Disciplinary Tribunal for consideration and determination;
The REA will have powers to require documents both from licensees and any person the Authority has reasonable grounds to suspect is carrying out residential property management services while unlicensed and not exempt from the Act, in order to effectively enforce the regime;
A range of offences and penalties will apply, including measures to discourage the provision of unlicensed residential property management services.

A range of offences and penalties will apply, including measures to discourage the provision of unlicensed residential property management services.

An RPMO licence authorises the licensee to enter into agreements with landlords to provide residential property management services, carry out work to deliver those services through licensed residential property managers, and operate a trust account. It is a condition of the RPMO licence that the licensee employs or engages the holder of a supervisory residential property manager’s licence.

Residential Property Manager Licences

In addition to Residential Property Management Organisation licences (RPMOs), there are 3 classes of residential property manager licences:

Supervisory residential property manager licence;
Standard residential property manager licence;
Provisional residential property manager licence.

Residential property managers with a valid licence can provide professional property management services on behalf of a licensed RPMO. However, provisional property managers need appropriate supervision and management from a residential property manager with a supervisory licence.

The Real Estate Authority (REA) has the authority to establish practice rules that mandate licensed individuals to partake in ongoing education. This includes specifying the frequency and subject matter that will be covered.

Regulations

A short summary of what regulations may be made:
Prescribing—

The qualifications and experience necessary to be entitled to different licences and different classes of licence under this Act; and
Rules about whether and what qualifications and experience obtained overseas can be taken into account in assessing whether the applicant has the necessary qualifications and experience;
Requiring RPMOs to have insurance of a specified kind and to a specified level of cover;
Requiring RPMOs to establish and use trust accounts in the prescribed manner;
Prescribing records that must be kept by RPMOs;
Providing for the appointment of auditors and for auditing
equirements, including the power of inspection of trust accounts and other documents or records that are necessary or desirable for carrying out an audit;
Set different qualifications for holding an RPMO licence, and the different classes of a residential property manager licence;
Set different levels of experience within a specified range of industries for holding the different classes of a residential property manager licence;
Set different qualifications that meet the standard for granting the same class of licence;
Provide for an increase in the prescribed level of qualifications and the length of required experience for the same kind of licence or the same class of licence over time.

Tribunal may make orders requiring use of a licensed residential property manager

Another interesting amendment being made to the Residential Tenancies Act 1986 is that the Tribunal may make orders requiring a landlord to use a licensed residential property manager if the Tribunal is satisfied that a landlord has committed an unlawful act under any of the following provisions:

Section 45(1A) or 66I(4) (landlord’s responsibilities: cleanliness, maintenance, smoke alarms, healthy homes standards, and buildings, health, and safety requirements);
Section 45(1AB) or 66I(5) (landlord’s responsibilities: contaminated premises);
Section 54(3) (retaliatory notice of termination);
Section 60AA (acting to terminate without grounds);
Section 137(2) (contracting to contravene or evade the provisions of this Act); and

A landlord must have committed an unlawful act on at least two separate occasions (being unlawful acts established within a period of five years in two or more cases before the Tribunal or the District Court); and each of the unlawful acts is of a kind referred to above.

Harcourts eagerly anticipates the regulation of the residential property management industry.

A link to the Residential Property Managers Bill is here:
https://legislation.govt.nz/bill/government/2023/0280/latest/whole.html