Victoria's proposed commercial licensing changes: Q&A with the REIV's Enzo Raimondo

There has been fierce debate around commercial licensing recently. The Real Estate Institute of Victoria's (REIV) Enzo Raimondo is particularly against the recent changes.

Here's a Q&A with Raimondo explainging why they oppose the gazetted regulatory changes.

What are the changes to commercial licensing?

The Victorian government has gazetted a regulatory change which enables anyone involved in the sale of real estate other than residential or rural land, will be exempt from the licensing requirements of the Estate Agents Act where,

• The price in the contract of sale is at least $15 million or the property has a total gross floor space of at least 10,000 square metres.
• Each party to the sale purchase or exchange of real estate owns other real estate with a total value of at least $15 million or a total floor space of at least 10,000 square metres.

Anyone involved in the leasing of real estate other than residential property or rural land, will be exempt from the licensing requirements of the act if the person or company for whom the person is acting owns property with a total of at least $15 million or a total floor space of at least 10,000 square metres.

It should be noted that the ALP, on Monday announced that it will review these changes if elected in Victoria at the upcoming state election on 29 November.

How does the REIV believe this will affect the industry and consumers?

It will create a two-tiered system where some agents will be licensed (for sales and leasing transactions below the threshold) and others won’t be licensed.

This will open the industry up to unqualified and inexperienced operators - and potentially criminals - because there will be no probity checks, and the operators will not be required to maintain an audited trust account or comply with the requirements of the estate agents act.

This will lead to a high level of financial risk to vendors, purchasers, landlords and tenants and means that thousand s of small businesses in Victoria will lose the inherent safeguards provided by the estate agents act.

This will hurt small business tenant in Victoria and may lead to increased rents, prices and put thousands of jobs at risk.  

What will the REIV be doing to stop the changes?

The REIV continues to lobby both sides of government in regard to the changes, and is running a public campaign leading up the state election (and beyond).

Are there any other changes to commercial licensing that should be implemented?

There is already an exemption in place for large commercial transactions between related parties, which the REIV believes is sufficient to meet the needs of a wide variety of stakeholders involved in these transactions. For this reason there is no need for the changes that have been proposed.

They represent deregulation of the commercial and industrial estate agency practice, yet are being promoted as red tape reduction.