The Real Estate Institute of South Australia (REISA) has reacted with horror at government plans to access funds in the state's agent indemnity fund, claiming it will be "bled dry".
“If the government is able to access this fund for general administration purposes, it may be bled dry and not be able to provide adequate compensation for those who have a genuine need in the future,” REISA president Greg Moulton said.
According to REISA, under legislative amendments currently proposed by the state government, the Agent’s Indemnity Fund could be accessed by the SA government for the purposes of “administering the Land Agents Act and the costs of administering the Land and Business (Sale and Conveyancing) Act 1994 in relation to agent or sales representative”.
The Agents Indemnity Fund is comprised of the interest earned from agent and covenyancer trust accounts.
Kevin Magee, head of Raine & Horne South Australia, also expressed his doubts that the government should be trusted with access to the fund.
“Everytime the government has used the words ‘helping’, ‘administration’ and ‘money’ [together], alarm bells start going off … I haven’t ever found it that helpful in the past.
“It just sounds like several more layers of bureaucracy to me,” he told Real Estate Business.
Mr Moulton also claimed that the industry already contributes enough money to the state through stamp duty and taxation.
“Vendors and purchasers already contribute over a billion dollars to state government coffers every year in property taxation and other impositions to fund the state,” he said.
“Now the government wants to take the interest on consumers' money to fund a government department. Where does it stop?”
“Each sales representative and agent already pays at least $197 per year to retain their license and new entrants pay this amount, plus a $255 application fee, so this totals significant funds, not to mention the burden of property taxation our sector bears the brunt of.”
“Fundamentally, REISA is opposed to this change as the Fund is all about consumer money," Mr Moulton continued. "It needs to be preserved to ensure that consumers always recourse to financial compensation in the case of a serious financial loss at the hands of an unscrupulous agent or conveyancer."
Real Estate Business contacted the South Australian government for a response, however they did not reply by the time of publication.