The Australian Competition and Consumer Commission has revoked its authorisation of the Real Estate Institute of Australia's Code of Ethics, ACCC Chairman, Professor Allan Fels, said today.
"In revoking authorisation, the ACCC was critical of:
- the absence of administration and review procedures in the Code of Ethics; and
- the failure by the real estate institutes of South Australia, Tasmania and the Northern Territory to establish an independent appeal mechanism in accordance with article 2 of the Code of Ethics.
"It has granted a substitute authorisation for the REIA's new Code of Conduct for Real Estate Agents".
The new code will benefit consumers by providing, for example, that:
- member real estate agents must make all reasonable efforts to ascertain and verify the material facts in a transaction to avoid error, exaggeration or misrepresentation;
- each member real estate agent must protect the public against fraud, misrepresentation or unethical practices in real estate transactions; and
- member real estate agents must complete all work on behalf of clients as soon as possible and in the best interests of clients.
The ACCC notes that the Code will only benefit consumers if agents comply with it.
"The ACCC expects the REIA and its affiliated State and Territory real estate institutes to robustly promote compliance with the new Code by its members.
"The ACCC has a number of concerns about the REIA's new Code, particularly the complaint handling mechanisms operated by the State and Territory real estate institutes which:
- provide only limited consumer access;
- in some cases do not make adequate provision for decisions to be made in accordance with the principles of procedural fairness; and
- in some cases do not make adequate provision for appeals to an independent arbitrator.
"Because of these limitations, the ACCC excluded these complaint handling mechanisms from authorisation.
"The ACCC also authorised the REIA's Code on condition that a new provision is included requiring that the complaint handling mechanism in the Code must make adequate provision for:
- consumer access to the complaint handling mechanism;
- appeals to an independent arbitrator;
- the making of decisions in accordance with the principles of procedural fairness; and
- annual reporting on the operation and effectiveness of the Code".
A number of other conditions were imposed on the REIA. In view of this, the ACCC granted the authorisation for only 3 years.
Under authorisation the ACCC grants an exemption, on public benefit grounds, from the parts of the Trade Practices Act 1974 that prohibit certain anti-competitive practices. It allows the ACCC to ensure that the statutory prohibition of certain types of anti-competitive practices does not prevent arrangements likely to benefit the public.
The ACCC grants authorisation if the conduct is likely to result in a benefit to the public and that benefit outweighs any anti-competitive detriment.
In this case, the ACCC granted an authorisation that exempts the proposed new Code from the statutory prohibition on arrangements that would or might substantially lessen competition in a market.
This decision provides a further example of the ACCC recognising non-economic benefits when assessing applications for authorisation. This decision also demonstrates that the ACCC can facilitate the development of industry based self-regulatory schemes designed to achieve fair trading outcomes.