REALB Introduces Fines for Misconduct Soon
The real estate industry has been growing fast for the last 10-15 years.
On a monthly basis there are 100 sale transactions that takes place.
However, the legislation that regulates the industry, is flawed, making the work of the Real Estate Licensing Board, much harder especially when it comes to penalising agents and salespersons who breach the Act.
Abdul Hassan, REALB Chairman, said “The Board is acting under the law, the Licensing Act. People get frustrated or confused by the actions and decisions made by the Board but they must understand we are acting under the Act.
The 13 year old legislation doesn’t regulate the commission of the agents. A loophole that many agents are taking advantage of, says Hassan.
“There are ways and means through which we can regulate those commissions. One is to use the percentage from the sales proceeds. What happened in the past is that the property owner will say get me $250 000 and anything above that is yours [agent]. So that’s where some of the agents are taking advantage of that. They could sell for $300 000. So the commission is $50 000 which is unfair on the owner. So we suggest to use the percentage wise,” said Mr Hassan.
Hassan says 3-5% commission from sale proceeds is reasonable.
Hassan adds that the Board is looking at introducing fines to penalize agents for breaching the Act.
As for now, he is unable to says whether having the agent’s commission regulated is a good idea.
In previous national workshops, the agents were reluctant to have this introduced.
But Hassan says a public consultation for a law review should kick start in a couple of months.
“For instance if a agent has been de-registered or suspended, who is going to look after the money that is collected? The time period for when a salespersons can become agents, should also be reduced,” he said.
Owning a property is quite expensive especially in the Suva to Nausori and Lautoka to Nadi corridor.
Hassan explains there are a number of factors to contribute to this increase.
“There is very limited land in our urban centres to develop for residential purposes. The price of building materials and there is a shortage of skills. Even people come from overseas to engage in the real estate industry. The National Building Code also has to be reviewed,” he said.