Property
Issue No. 33 - February/March 2007
Real Estate red tape warning
Key aspects of a bill currently before State Parliament threaten to ban the fundamental right to buy at wholesale and sell at retail and will add significant cost, according to SA’s peak real estate industry body.
REISA chief executive Tony Myers says the Statutes Amendment (Real Estate Reform) Bill 2006 should concern the entire business community as there are “draconian measures in the Bill which will create more red tape and more expense … which could be easily applied to other business or industry sectors”.
Consumer Affairs Minister Jennifer Rankine argues the changes will bring the real estate industry in line with other service providers and protect practitioners who act ethically from unscrupulous competition.
“Of particular concern is a section of the legislation which deals with disclosure of the nature, source and amount of any benefit received from a third party,” Tony says.
“REISA is committed to transparency, so disclosure per se is not an issue. However, in its current form, this provision will also prevent an agent from charging a client more for expenses than the amount paid or payable for those expenses.”
It is understood REISA actively participated in the reform process and agrees with most of it bar the third-party provisions which it believes are not only unfair, but impractical. The dispute stems from the volatility of real estate’s basic cost – advertising.
“The Institute fails to understand why, at this stage, the real estate industry is being singled out by the Government to be prohibited from buying at wholesale and selling at retail,” Tony says. “No other business or industry sector is subject to this restriction.
“The economy is predicated on businesses being able to buy at wholesale and sell at retail and the addition of a margin is practiced by every business and trade on the economic landscape. This includes responsibility for the account, administration, n...
