Land Agents (Registration Of Property Managers And Other Matters) Amendment Bill

Ms CHAPMAN ( BraggDeputy Leader of the Opposition) (15:55): I rise to speak on the Land Agents (Registration of Property Managers and Other Matters) Amendment Bill 2017— 

The DEPUTY SPEAKER: As lead speaker? 

Ms CHAPMAN: —as lead speaker. This was a bill introduced by the Minister for Consumer and Business Services, otherwise known as the Attorney-General, on 31 May this year to amend the Land Agents Act of 1994. In addition to my duties as shadow attorney, I was recently appointed to assume responsibility as spokesperson for the opposition on consumer and business services. It has been a busy period, I must say, with liquor licensing and other matters to be attended to.

This is a matter that comes before the house ostensibly, as far as the government is concerned, because of a need to have a registration process for property managers. It purports to be as a result of there not being an adequate way to manage the complaint in respect of conduct or misconduct of property managers. This model of registration is to be the basis upon which there will be some relief offered and will provide the opportunity for the commissioner for Consumer and Business Services to be able to deal with those matters, including disciplinary action for the recalcitrants. 

In the course of consulting on the bill, the commissioner, Mr Dini Soulio, was kind enough to make himself available to provide information in a briefing arranged by the government upon our request. Today, I was provided with some information about the history of prosecutions and action taken in respect of alleged acts of misconduct or underperformance of property managers. I thank those who attended to the provision of that information. 

Essentially, the bill requires employees of land agents to be registered. These are the property managers, sometimes those who are listed as those managing the rent role of an employer. Currently, a person must be registered as a land agent to sell or deal with land or a business and an employee must be registered as a sales representative. The rules relate to commercial property management but not residential property management. I am advised further that we are the only state that does not have a registration of property managers. Bearing this in mind, the opposition indicates that we will consent to this bill. 

There is some information I wish to place on the record. The second reading explanation of the minister asserts that there are some 180 calls per month in respect of the service or lack thereof, or the conduct or misconduct of property managers by both landlords and tenants. Essentially, the Consumer and Business Services department can pursue only criminal charges—that is, the stealing of trust money—and, further, can prosecute only the employer and not the individual employee. 

Historically, as I understand it on the information provided, of course an employee can be dismissed from their employment and the employer can be prosecuted, subject to there being some level of knowledge, acquiescence or lack of supervision in relation to that employee. The purpose of this registration is to give a direct link with the party whose conduct or misconduct is under question. 

The government claim that they are reducing a regulatory burden on commercial property managers as well under this bill, and there will be a lower overall cost. However, I am not sure how that can be either alleged or endorsed, because the Real Estate Institute of SA has indicated that there are no draft training requirements. No regulations have yet been prepared, and no costs or registration fees have been discussed or agreed to. Consumer and Business Services are apparently to arrange a round table with stakeholders, once the bill is passed. 

We have just dealt with legislation in respect of liquor licensing, and we had the same promise from the government with no indication of what is going to be charged, just claims that it will be better, quicker and cheaper. That is the usual chant from the government; I have heard it many times. The reality is that the outcome creates a very different picture, and the observance of this of course is more in the breach. 

It is a complete mystery as to what is going to be the required level of training and what the cost is going to be. I am told, at present, by the Real Estate Institute that they offer a course for something like $990. It comprises I think three or four units in an area of expertise and is a four-day course. They obviously provide this service primarily in respect of the legalities and ethics aspects of property management. 

We do not know who else is going to be a registered training authority or what agency will be. One can only assume that TAFE will be taking up this opportunity. If they undercut the Real Estate Institute and charge $650 for a course, we are yet to see how that is going to work out and what competition there will be in the market, or what unfair competition might come into the market. In any event, the Real Estate Institute, notwithstanding that it is a registered training organisation itself and is, I suggest, approaching this blind, is supportive of the proposal. 

The government's claim in the briefing was that, in respect of the allegations of some theft or fraud of the rent or bond moneys or trust account larcenies, these are matters that are referred to the police. There was some concern expressed at the briefing that there had been occasions when this had been referred to the police, but there had apparently been no appetite on the part of the Commissioner of Police to prosecute these matters. 

Today, I have received correspondence from the minister's office, signed by the Attorney, with information that he has doubtless been provided with by the commissioner for Consumer and Business Services. I will reflect on some of this information provided because it relates primarily to what action has been taken for prosecutions that have been referred to the SA Police. Firstly, in 2014 CBS issued 314 written warnings and 70 expiation notices. In 2015-16, they issued 438 written warnings and 57 expiation notices. These largely related to breaches arising out of their annual trust account audits. 

It does not necessarily mean that there was stealing, but I am assuming, on the basis of the action taken, that these were relatively low-level infringements. However, they go on to say that there are currently 18 ongoing real estate and conveyancing-related investigations. They of course do not necessarily identify them as being specifically regarding property managers but, in any event, these have been raised. What is important to note is that they also report: 

In recent years, CBS has referred three matters to SA P olice for prosecution, with an additional two matters referred by complainants. M atters referred to SA P olice by CBS are generally reserved for serious misconduct relating to major fraud . Four matters include alleged trust account theft and fraud of rent and bond monie s resulting in a combined estimated total of $1 million in claims to the A gents I ndemnity F und (with over $600,000 paid to date ) . 

The letter then goes on: 

Notable outcomes in recent years have included a successful prosecution , eight public warnings issued, fo u r assurances accepted an d a referral to the Australian C riminal I ntelligence C ommission. F urther , three additional matters were referred to SA P olice by registered land agents for trust account thefts by employees ( unregistered property managers ) . The agents were subject to written warnings as the C ommissioner was satis fied with their actions of self- reporting and personally rectifying the issues ( i.e. terminating e mployment, replacing trust monie s and strengthening safeguards against further misconduct ) . 

What is not clear from that information is why only one of these matters was successfully prosecuted, and, more importantly, which commissioner made the decision to issue written warnings in respect of matters that were serious enough to report to the police for prosecution and have been identified as being from a serious misconduct relating to major fraud, yet they were not apparently prosecuted. 

It may be that the Commissioner of Police and/or the commissioner for Consumer and Business Services took the view that the explanation given by the employee, or the commitment to repay the moneys or leave the employment and go and work somewhere else (hopefully not perpetuating that conduct anywhere else), was sufficient to deal with the matter. So, I think we need some explanation as to what is going on here. 

If on the one hand cases are being referred to the police and they elect not to prosecute, or they make a determination that there is inadequate evidence or insufficient support statements from witnesses or documents to corroborate the evidence in respect to the charge, then I think we should note that. If they have simply elected not to proceed with the investigation and prosecution of these matters, then I think we need an explanation, because if these are—which is stated in this letter—matters of serious misconduct relating to major fraud that are being referred, then we as a parliament need to know that they are being acted on. 

Certainly, we have seen fraud in the Attorney-General's own office, in his own department. We have seen a major fraud in recent years in respect of the Victims of Crime Fund, which was under his very nose. More recently, there has been a very significant fraud in the Public Trustee, so, frankly, I do not have a lot of confidence that there is adequate supervision under the Attorney-General's watch. However, I do expect that if an enforcement agency has referred to it serious matters from the commissioner of Consumer and Business Services, particularly serious misconduct relating to a major fraud, it should be acted on and, if it is not acted on, we should know about it. That is not a matter that should, in my view, attract some lesser action, particularly when the government is now coming to us saying that we need to have a registration process with a significant stick, namely, enabling us to empower the commissioner to implement disciplinary action or prosecution, with penalties up to $100,000 and/or five years' imprisonment. 

There is not much point in coming to the parliament and asking us to support a regime that may or may not be effective in ensuring that we have a better system in respect of the services provided by property managers, more particularly to provide a means by which there can be adequate discipline in relation to this field if in fact, with the law as it currently stands, they are not actually acting on it. I think we do need some answers from the government as to what is going on in this regard and not just impose another level of bureaucracy, for which the terms and conditions are yet to be defined, on that particular profession. 

I say that because this is a professional service provided to the public, in this case to ensure that the rights and entitlements of a tenant and a landlord are properly administered and that there is a process for the payment of bonds, the maintaining of properties in a fit state and, of course, the provision of services in them on a fit-for-purpose basis by the landlords for the tenants. There are interests to be protected on both sides, and the property manager has significant obligations in respect of that in addition to the management of the timely return of bonds and the like when, inevitably, there is a transfer of tenancy or one party seeks to leave the arrangement. 

That is frequent in the residential tenancy world for lots of reasons—I am not casting any aspersions on that—but obviously people's employment changes, they go to live in another town, state or suburb and they need to change their residential arrangements. It is a fairly high turnover, possibly much higher than in the commercial tenancy world. I make the point that we offer, and have offered for a number of decades, a residential tribunal-type process for the speedy management of tenancy disputes. Recently, it was absorbed into the new South Australian Civil and Administrative Tribunal, but it essentially operates in the same manner. 

Consistent with that, we need to make sure that there is a process to ensure that the standard of the profession of property managers is maintained. I think that members can see that I am not overjoyed at the prospect of having another level of registration and regulation, and I do want some answers in response to why there has been no following through on the prosecutions by the police and/or the commissioner, whoever made that decision, in respect of the information that has been provided. Otherwise, the opposition will not oppose the bill. 

In respect of tenancies generally, I think that two things need to be looked at; one is the electronic equipment and program used by SACAT for the purposes of the receiving and return and/or adjudication on bonds. I am told by those who work in the profession that a number of circumstances have been raised with the government in respect of the timely attention to the payment out and/or debiting against and/or refunding of the bond. This is obviously unsatisfactory for both landlords and tenants and needs to be remedied. Multiple concerns have been raised, and I think that matter should be addressed. 

If it is not going to be addressed in this week's state budget, I think the Attorney-General needs to beef up his position in the cabinet and make sure that some of these things happen. It is not acceptable in this area of the property world—namely, the tenancy management for which property managers and the real estate industry generally pay very significant fees, and will pay a lot more and be involved in funding the costs of further training and, while we are at it, providing an annual revenue to the state of nearly $9 million net or probably more in this financial year. In fact, this is the only part of the Attorney-General's responsibility that actually makes money for the government. 

I just make the point that you cannot rape and pillage those in the industry because they are bound by a licensing-type scheme or registration and expect that they not have adequate and proper services, including the electronic management of bonds, in this case, for the industry in which they are regulated. The Attorney-General clearly needs to step up and say, 'You can't just rape and pillage this industry. You need to make sure that they have proper services that go with it.' 

The other matter I want to raise is that, as the Attorney knows, we have passed legislation in this parliament to deal with prescribed addresses that are identified as bikie places of occupation. This was largely to deal with the non-consorting of members of bikie gangs. In that legislation, we have listed a whole lot of proscribed addresses. The purpose of that was to identify them as places where there is not to be any meeting of more than two persons in an outlaw motorcycle gang. 

This proscriptive process was a rather novel approach. Nevertheless, we worked with the Attorney to try to make sure that we were not unfairly dealing with not just the subsequent use but whether the government were inadvertently including in their list of proscribed addresses those that had lawful and legitimate tenants in them. In fact, when the list first came to the parliament I think two properties were identified as having families living in them. 

For some reason, they were put on the list, and we had to redo the list and they had to be removed. I think there was a list amongst the outlaw motorcycle gangs of a poor, innocent and hapless motorcycle club that was accidentally put on the list, and we had to take that group off the list when it was found that it was just a group of 60-plus blokes who liked wearing leather jackets and riding around on motorcycles in a perfectly lawful way. 

Here is the problem now: we have created a system in which the identification of these properties has been made. As best I can see, it has had the desirable effect of breaking up a meeting place for the outlaw motorcycle gang. I drove past one out towards Wakefield Road the other day and saw that it was completely demolished and being rebuilt into another premises, which is pleasing to see. Hopefully, the next enterprise will be lawful, productive and useful to the community. 

The process of being able to move on and have that address removed as a proscribed address, as being a place at which there was a fortress or headquarters of a bikie gang, appears to be very cumbersome and can take months and months. If the property is sold and it is determined that the purchaser wants to redevelop the property for the purposes of a lawful enterprise, that exercise is both expensive and time consuming and it needs to be looked at. When the Attorney‑General considers the practical implications of that legislation, I would ask him to look at that aspect. 

If it is established that the person or entity who has acquired the property clearly has no association with the former group—that is, the outlaw motorcycle gang, most of whom are now operating just over the border in Victoria or in their lounge rooms in South Australia, so we have not got rid of them or their activities per se—they ought to be able to get on with the development of those assets ASAP. That is a matter I ask the Attorney to have a look at. 

I want some answers in relation to the prosecution—there is not much point in setting up a new system if, in fact, they are not even utilising the old one—and I would like some commitment in respect of the programming of the material and bond moneys that go in and out of the CBS. Finally, while he is at it, I would ask him to look at the proscribed places for the purposes of serious and organised crime and the impediment that is having on the prospects of redevelopment of those properties in a timely manner for a productive and lawful purpose. With those few comments, I indicate that we will not be opposing the bill.