Only “fit and suitable” people can become real estate agents, and the industry regulator is working to clarify what that means.
It might seem like anyone can land a job as an agent, with the real estate workforce hitting an all-time high earlier this year.
Figures from the Real Estate Authority (REA) showed that the number of sellers, including branch managers and agents, had increased by more than 1,000 since June 2020. There were now 16,692 employees in the sector.
But in addition to being over 18 and having the correct qualifications, under the Estate Agents Act, aspiring agents must be a “fit and proper person” to qualify for a license.
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The authority’s chief executive, Belinda Moffat, said it was one of the fundamental principles underpinning the high standards of conduct required of licensed property professionals.
Performing a “fit and proper” assessment has always been part of licensing processes, but the legislation did not define what “fit and proper” was, she said.
This had led the authority to create draft guidelines on what was considered and expected when determining eligibility.
“They will help clarify the specific factors and considerations relevant to this assessment, and provide greater transparency for industry and the public about how this aspect of the licensing regime works.”
Here’s what the guidelines define as the primary factors assessed to determine if an aspiring agent meets the “suitability and suitability” requirement.
Good character is the key
Someone was likely to be of good character if they could demonstrate reliability, integrity and honesty, and the ability to comply with job responsibilities and legal obligations.
They should also demonstrate that they can uphold the reputation of officers, conduct themselves in a manner that does not pose a risk to public safety, and treat others with respect and courtesy.
Past criminal convictions come into play
If someone had been convicted of a crime, the nature of the crime, the length of time since conviction, and the age when the crime was committed would be taken into account.
Similarly, if a person were the subject of a professional, training or regulatory body complaint, investigation or disciplinary proceeding, the authority would assess whether this had a negative impact on their fitness. to be an agent.
Questionable behavior is not forgotten
When a person has been declared bankrupt or has been a director of a company in receivership or liquidation, this deserves consideration.
As would someone who had been prohibited from acting as a director, promoter or senior officer of a company, or someone who had violated a law relating to trust money or an account in trust.
If someone had carried out building work when they were not authorized to do so under the relevant legislation, or when they did not hold an appropriate licence, this would be taken into account.
Perfection is not necessary
The standard of “fit and proper” was high, but perfection was not required, and the assessment would be objective and follow the principles of natural justice, in accordance with the guidelines.
This meant that the authority could not “lightly deprive” someone who was otherwise qualified of the opportunity to be an agent.
But if people applied for licenses for higher positions, such as branch managers, they were assessed to a higher standard.
Moffat said people who deal with real estate professionals rely on their good character when making important financial decisions and commitments.
“For the public to have confidence that the profession is well regulated, it is important that they understand and trust the regulatory framework used by the authority to assess the character and past actions of these professionals.”
It would be consulted on the draft guidelines until June 15.
The authority also recently issued a warning that it expects high professional standards from sellers, despite tougher market conditions.