Regulating residential property managers

Property managers in New Zealand aren’t regulated, which can mean inconsistent quality of services for tenants and owners. Regulations would introduce national standards around training, licencing and practice for all professional property managers, giving tenants and landlords confidence in the quality of the property management services they receive.

Property managers in New Zealand aren’t regulated, which can mean inconsistent quality of services for tenants and owners. Key stakeholders have highlighted the risk that the lack of common standards and an accessible, independent, disciplinary and dispute resolution process pose to property owners, tenants, and the reputation of property managers. Regulating residential property managers would introduce national standards around training, licensing, and practice for all professional property managers, giving tenants and landlords confidence in the quality of the property management services they receive. 

About the proposed regulations 

Nearly a third of New Zealand households live in rental accommodation and more than 40 per cent of those residential rental properties are looked after by property managers. Although property managers who are members of an industry association are required to comply with competency and practice standards, the sector as a whole isn’t regulated.  

The proposed new regulatory system will include:  

  • compulsory registration and licensing for individual property managers and property management organisations, 
  • training and entry requirements,  
  • industry practice standards, and  
  • a complaints and disciplinary process. 

The key features of the proposed regime are set out in the table below: 

Feature  

Detail  

Scope  

In scope  

  • Individual residential property managers (RPMs)  
  • Residential property management organisations (RPMOs)  

  

Out of scope  

  • Private landlords (including their employees where relevant)  
  • Public landlords, including Kāinga Ora and Community Housing Providers  
  • Residential property management activities where there is no expectation of payment  
  • Commercial property managers  

Compulsory licensing and registration  

Licensees to appear on a public register   

  

Tiered licensing structure  

  

Minimum qualification and training requirements for each licence class  

Further entry requirements   

Minimum age of 18  

  

Fit and proper person test  

  

Industry experience requirements for full and supervisory licence classes (but not provisional)  

Professional and industry practice requirements  

Continuing professional development (CPD)  

  

Code of professional conduct and client care  

  

RPMOs to operate trust accounts that are subject to an annual audit  

  

RPMOs to meet prescribed insurance requirements  

Regulatory authority  

The Real Estate Authority (REA)  

  

Complaints and discipline  

Independent complaints and disciplinary framework to address complaints relating to the professional conduct of a property manager or property management organisation, which involves a breach of the legislation or its associated regulations   

  

Complaints Assessment Committees can order fines not exceeding $10,000 (individual) and $20,000 (corporate organisation)  

  

‘No wrong door’ for complaints and disciplinary matters  

Independent Disciplinary Tribunal  

REA Disciplinary Tribunal  

  

Powers aligned with those in respect to real estate agents  

  • Fines not exceeding $15,000 (individual) and $30,000 (corporate organisation)  
  • Level of compensation ordered can be up to $100,000  

  

Offences and penalties  

To address issues relating to:  

  • Providing false or misleading information  
  • Practicing, trading, or employing while unregistered or unlicensed  
  • Failing to produce financial records  
  • Failing to hold money in audited trust accounts or rendering false accounts  
  • Failing to disclose a conflict of interest that results in financial benefits  
  • Failing to comply with a lawful summons  
  • Acting in contempt of the Tribunal  

  

Fines not exceeding $40,000 (individual) and $100,000 (corporate organisation)  

Regulatory stewardship and monitoring  

Te Tūāpapa Kura Kāinga (HUD) to act as regulatory steward for the property managers regime  

Timing  

Legislation to be introduced to the House in May 2023  

  

Commencement mid-2025  

  

Transitional period of 12 months to provide time for regulated parties to meet their requirements and for the regulator to complete licensing and registration of affected parties.  

  

All provisions in force mid-2026  

Public consultation 

Public consultation on the proposed regulations closed in April. Cabinet has now agreed on the proposals to regulate the property management sector.  

Indicative implementation timeframes 

Milestone 

Target date 

Bill introduced to Parliament. 

May 2023 

First reading: Members of Parliament debate and vote on the Bill. If successful, the Bill is sent to a Select Committee. 

June 2023 

Select Committee consults on the draft Bill. 

Mid 2023 

Select Committee presents a report on the Bill that includes recommendations on any changes that may be needed. 

Early 2024 

The Bill passes and becomes an Act. 

Mid 2024 

All provisions (including any required regulations) in force. 

Mid 2026 

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