More protection for buyers and sellers

More protection for buyers and sellers

Posted on Wednesday, January 02 2013 at 10:31 AM

Investors facing legal issues with the buying and selling process in New South Wales are likely to have better protection, thanks to the introduction of compulsory professional indemnity insurance for real estate agents.

NSW Minister for
Fair Trading, Anthony Roberts, says the changes will ensure consumers who are
buying or selling a property or renting or living in a strata scheme will have
the security of knowing that if they’re entitled to financial compensation, the
property agent will have insurance over the claim.

“Given the risks
associated with liability confronting the property industry, appropriate
professional indemnity insurance cover is a must,” he says.

“The majority of
professionals working in the property industry already hold this type of
insurance, however it’s essential that those who don’t are brought in line with
the best practice standards.”

All agents will
be required to hold at least $1 million coverage for any one claim and no less
than $3 million in the aggregate for all claims made during the period of

The regulation
also specifies mandatory coverage of certain insurable events such as
negligence, misleading or deceptive conduct, breach of professional duty,
defamation, interference with intellectual property and fraud or dishonesty by
an employee.

Real Estate
Institute of NSW chief executive Tim McKibbin welcomed the new regulation.

“This is a
win/win for consumers and agents,” he says.

professional indemnity insurance will provide the consumer with an avenue of
redress if they suffer a loss resulting from the provision of services provided
by an agent.

“In addition, it
will also provide business owners with the ability to respond to claims without
placing their businesses in jeopardy.”

The changes are now compulsory. However, if a
licensee already has insurance coverage under a policy issued before January 1,
2013, the policy will be considered to comply with the requirements of the
regulation until that existing policy expires, or until January 1, 2014 –
whichever first occurs.

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