Over the next 5 to 10 years the real estate industry across the country is going to undergo massive changes as we shift from a collection of state based industry's to a true national real estate industry. As we prepare to evolve into true national industry it makes sense that we ask ourselves just what role state based real estate institutes can play in that future.

So the million dollar question is how can the REIQ, REINSW, REIV, REISA, REIT, REINT, REIACT and REIWA survive with nationalisation of the property industry?

The first nationalisation initiative in place will be National Licensing for real estate agents and a little further down the track will be the much larger Real Property Law Reform.

National Licensing

The National Occupation Licensing Authority (NOLA) allows for the national licensing of real estate agents which is due to come into effect on 1 July 2012.

The stated aim of national licensing is to remove inconsistencies between the states and enhancing consumer protection. Under the new licensing regime, real estate agents will complete standardised training to achieve a national real estate license or registration certificate. This will allow far easier mobility in our industry with real estate agents more easily able to work in other states.

National licensing is going to arrive far quicker than most people in the industry realise but the change has been coming since 2009 when the Council of Australian Governments (COAG) signed an Intergovernmental Agreement to establish a national occupational licensing system for specified occupations which includes real estate agents.

Real Property Law Reform

Harminisation of various laws across the states has gained significant traction recently and a lot of attention from the Federal Government. One of the areas receiving significant attention is property laws.

National property laws are the goal of the Property Law Reform Alliance (PLRA). The PLRA is a coalition of legal and industry associations committed to bring about uniformity and the reform of property law and procedures in Australia.

The PLRA Alliance was formed in 2003 following discussions between the Property Council of Australia and the Australian Property Law Group of the Law Council of Australia about the need for uniform real property legislation.

The membership of the PLRA is quite large but includes the Law Society from each of the states and the Real Estate Institute of Australia.

The Alliance is working for the introduction of nationally consistent property law, practices, procedures and compliance requirements throughout Australia. In doing so, it is expected that cross-border property transactions will be simpler, more efficient, and more cost-effective.

As most land in Australia is now held under Torrens Title, it is a logical area to commence the harmonisation of property law as the application of Torrens Title varies so much from state to state. The PLRA has created a draft Uniform Torrens Title Act (UTTA) which they are seeking comments for until 28th of February 2012. Real Property Law Reform is going to be a slow process but the outcome seems inevitable. It is expected that the adoption of a UTTA would also provide a basis for further national reforms, in areas such as mortgage and lease legislation.

Property Law is highly complex and a national reform is not going to happen overnight but I think national property reform is a fait accompli and the only question will be the time it takes to get in place.

Do State REI's have a place in a Nationalised Industry?

In line with the nationalisation of our industry it makes sense to consider combining all state based institutes into one national body under the REIA banner. Under this sort of merger the current state institutes would become the state operation centres for the REIA.

In my mind the one main primary aim of each state based real estate institute is political advocacy and over the years they ave worked with the state governments on the state based legislation that effects their membership. The different state landscapes provided the justification for their existence. But as nationalisation increases and state based differentials disappear the viability of our state institutes seem to me to disappear along with it.

I therefore believe that to remain relevant to our industry that the state institutes need to combine under the REIA banner to create one large institute. A single powerful industry body would bring with it a consistent and more powerful advocacy for the national laws.

It's true that the REIA in its current form already provides advocacy on national stage but it does so with minimal funding from the state institutes and whilst property laws differ from state to state the role is very minor at the moment. A shift to harmonisation of property laws across the country will dramatically increase the this role.

Other major roles conducted by our state institutes would all seem to benefit from a larger national body and the economies of scale it would bring such as property research, training, advice, member to member and consumer to member dispute resolution.

As an example each institute would run their own training departments and CPD programs. Combining them all under one banner would provide greater economies of scale. All the major cost centres that are currently duplicated in each institute around Australia would provide significant savings in such a merger allowing for a greater return back to members. But it's more than just cost savings.

A powerful REIA would also be able to provide real direction for our industry that we desperatley need. In the past the fractured representation of members has allowed commercial entitites to have much more power in our industry than I believe they should. I believe that the REIA should provide leadership and direction in a similar vein to what I see NAR does in the USA>

The National Association of Realtors (NAR) in the USA provides a great model of a powerful national trade association. They provide a real difference in member recognition with its Realtor program where it has trademarked the name "Realtor". If you engage a realtor to sell your property you know they are member of NAR.

NAR conducts political advocacy on behalf of its members and is able to do so on a very massive scale as a national body. It is allegedly the third biggest contributor to political campaigns in the country. In addition to their normal membership the NAR also conducts a range of further accreditation for additional certifications after members conduct additional study.

NAR runs the Centre of Realtor Technology (CRT) which provides a range of member and industry services in the technology space that our state based real estate institutes could only dream of. Unlike our own state institutes it does not just write about technology in monthly journals but takes an active role in the technology space for its members.

The CRT creates a range of software for the exclusive use of members and maintains technology standards and protocols for all industry participants. It plays a leadership role in Technology throughout the industry providing training, surveys and white papers for members on technology issues.

A more efficient REIA could use some of the savings generated to provide additional member services like those above that NAR provides it's members.

The Australian state institutes cop some flack from members and much of it centres around the online space. Claims vary but essentially they focus on the institutes failure to counter the dominance of large industry players like Realestate.com.au and Domain.com.au. What they have done in the online space has been too little, too late and most importantly too fractured across the states which all results in a dramatic waste of members funds.

It is interesting to note that despite many more commercial players in the space than here in Australia, NAR runs the most popular real estate website for consumers at realtor.com which is completley seperate to their website for members at realtor.org. This is a free to list website for members with a range of premium add ons but it has none of the ads tat we see fill to overflowing our subscription portals here in Australia.

What are the Obstacles?

Initially I thought the major obstacles will come from within the institutes themselves but now I am not so sure. It's hard for people to agree to merge and essentially make their organisation and their own position redundant. I posed this scenario to the head of one of the state institutes recently and was honestly shocked with the response which recognised the challenges involved but in essensce agreed pretty much with the concept.

I sincerely believe that the executive and board members from each of the institutes are genuine in their desire to advance the industry. Whilst they may differ in approach and they certainly cant satisfy every member's expectations I think that they will probably be less of an obstacle that many will predict.

I think the biggest hurdle will be the mass of smaller issues that will need to be dealt with when you merge 9 separate organisations into one. That probably means the sooner the state institutes decide that this is their future and they create a working committee to identify the challenges and work through the solutions the better.

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