South Australia's real estate industry on notice

23 August 2004

South Australia's State government has released for consultation its proposed Real Estate Industry Reform.

The Bill implements recommendations made by the Real Estate Working Party, actually going further than suggested by allowing only one disclosed vendor bit at auction rather the recommended unlimited disclosed vendor bids.

This, and the proposed pre-auction registration system that will also require bidders to display a registration card when bidding has drawn criticism from the Real Estate Institute of South Australia (REISA).

They say the legislation could spell the death of the auction system.

While REISA agree vendor bids should be disclosed, they don't want that limited to one vendor bid.

"The auction system should support both vendors and purchasers and as long as vendor bids are properly disclosed, the system is very fair for all consumers," says President, Robin Turner.

The organisation also believes the card system impacts on consumer privacy and they want unregistered bidders to be able to participate in the auction provided they register immediately after the auction.

"Of course REISA fully supports the outlawing of dummy bidding which is a misleading practice. We made this very clear when members adopted a voluntary Auction Code of Conduct last October", said Mr Turner.

But, the State Government "is determined to stamp out unscrupulous practices and anyone who even thinks about taking South Australian home buyers for a ride should think twice".

"The industry is being warned to shape up," says Minister for Industry and Trade, Paul Holloway.

"The real estate industry is to be commended on recent moves to clean up its act, but the Government wants to go further and ensure requirements are enshrined in legislation." With tough penalties that include fines of $20,000 for agents and $10,000 or a one year jail term for sales representatives, Mr Holloway says real estate agents who run the risk of being prosecuted also run the risk of destroying their future in the industry.

As well, the Bill will outlaw advertising of sale prices below the price estimated in the sales agreement and restrict advertising of prices to a 10 per cent range - a move sure to be welcomed by all house-hunters.

Sales agreements will also be given an overhaul with a requirement they are "written in plain English", and agents and auctioneers will need be to registered. They will also be required to disclose any actual or potential conflict of interest.

Mr Turner says it is crucial that the real estate legislation implemented in South Australia is practical and meaningful and REISA is actively working and consulting with its members to prepare a comprehensive response to the draft legislation.

"There are many practical amendments in the draft legislation that REISA agrees with," he said. "However there are some issues that require further consideration...."

Story by Kathryn Crisell Probst, www.domain.com.au