After industry leaders highlighted the need for zero tolerance around fraud cases, a real estate principal has said the Office of Fair Trading (OFT) is to blame for agents acting unethically.
Speaking to Real Estate Business, LJ Hooker Caboolture and Morayfield principal licensee Steve Hay said real estate licences are granted far too easily.
“The Office of Fair Trading is handing out licences like lollies – it is the joke of the industry,” he said.
Mr Hay said an agent in Queensland was given a real estate principal licence even after a dark history, which included serving three years for convicted rape as well as being booted from the car industry for taking “cash kick-backs”.
“I rang the Office of Fair Trading and broached this subject with them … and I asked how this guy can get a principal's licence to run a business, and have staff and run a trust account when this is his character,” he said.
“And they said if he hasn’t been in trouble with the law for the last five years, he is a fair and honourable character.”
Real estate coach and auctioneer Tom Panos said there is a “very low barrier to entry” to become a real estate agent.
“That low barrier to entry means it attracts a lot of people from various backgrounds – that is a good thing and a bad thing,” he told Real Estate Business.
“The good thing is you can have people mid-career, do a change of career and get into real estate and be very successful and add a lot of value to the community.
“The downside is if the barrier to entry is too low it is also going to attract people who may have histories of doing work that is unethical, and even though they may have not held trust monies in the past, all of a sudden they are given a role that has a requirement they hold other people’s money in trusts,” he added.
Mr Panos said he agrees “wholeheartedly” that the low barrier to entry is probably the reason we are seeing recurrent fraudulent offences being carried out.
“My advice would be that to reduce and eliminate the instances of these, [it] would be a combination of a few things,” he said.
“To be an agency principal owner should require a longer and more rigorous academic qualification [and] a longer and more rigorous investigation into the applicant’s previous history.
“The Office of Fair Trading should also have a more rigorous approach in monitoring the behaviours of agents, and most definitely I agree with zero tolerance on fraud,” he added.