The Department of Commerce has proven an effective overseer of the real estate industry, an auditor general report has found.
Following recent analysis, Western Australia auditor general Colin Murphy claims he found Commerce’s oversight of the real estate industry to be “generally sound”.
The report discusses how new measures will reduce the risk of fraudulent property sales following the recent sale of two Perth homes by Nigerian-based scammers without the owners knowing.
Though the department has effective arrangements in place to ensure the risk of financial loss to consumers remains low, Mr Murphy says it “could do better in ensuring agents’ ongoing suitability during their three year licence.”
“The vigilance of agents is still critical to preventing property fraud,” writes Mr Murphy in the report.
Around 5400 agents and 9320 sales representatives were licensed or registered as at August 2014. According to the report, Commerce proved suitably prompt in investigating over 3600 complaints and potential breaches since July 2011, with breaches found in 1995 cases.
“I am encouraged to see Commerce acknowledges the need to improve the timeliness of processing complaints about the real estate and settlement industries in some cases,” says Mr Murphy.
The most significant concerns were related to money held in trust accounts, as opposed to misleading and deceptive conduct or acting outside the customer’s best interest.
The Real Estate Institute of Western Australia (REIWA) has welcomed the auditor general’s findings, with President David Airey reiterating how complaints against the real estate industry were very low given the significant number of annual transactions.
“It’s gratifying to be reassured by the auditor general that the regulatory system is working well, not only for the industry but also for buyers, sellers and tenants,” Mr Airey says.
The report, Regulation of Real Estate and Settlement Agents (Report 1 – February 2015) can be downloaded from the Office of the Auditor General website.