The Real Estate Institute will be stripped of its powers over the country's 18,000 agents and a new, independent authority will be set up under legislation passed by Parliament last night.
The Real Estate Agents Bill establishes the Real Estate Agents Authority, which will oversee licensing, set industry standards, set fees and levies and deal with complaints and disciplinary action against agents.
Associate Justice Minister Clayton Cosgrove introduced the bill after numerous buyers and sellers complained about being ripped off by agents, and the lengthy and often ineffective in-house procedure for dealing with those who broke the rules.
Mr Cosgrove went head to head with the institute and he was criticised for talking about sharks and rogues in the industry.
The bill passed its final stages under urgency last night and Mr Cosgrove said people who had problems with agents would get a fair go for the first time.
"The new authority will deal with complaints quickly and effectively," he said.
"It will not cost consumers anything to lodge a complaint and they will not be required to hire lawyers because the authority will represent their case if it is referred to the disciplinary tribunal."
For the first time there would be consumer redress, including compensation of up to $100,000.
"The most important people in this whole deal are the honest real estate agents and the consumers," he said during the bill's third reading debate.
"I look forward to working with the industry. We will get rid of the bad guys. We will restore and promote the positive work of those in real estate, and restore the faith consumers should have in this industry."
National opposed the bill, and MP Kate Wilkinson said property managers should be covered by its provisions.
"Property management isn't in it, although it's an integral part of the industry," she said.
"Of course we support legislation that protects consumers but this legislation is a missed opportunity, a disappointment.
"We do not have a workable piece of legislation and at the end of the day the consumer will not have more protection than under existing legislation."
Mr Cosgrove said property managers could easily be brought under the legislation if there was evidence that they should be.
The bill passed its third reading by 65 votes to 53.
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