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Inquiry into Property Investment Advisers and Marketeers
- 10 April 2008: Parliamentary Committee calls for more protection for property investors
- 29 June 2007: Parliamentary Inquiry into Property Investment Advice: Call for submissions
From Johan Scheffer MLC, Chair
10 April 2008
The Victorian Parliament's Law Reform Committee today released a report calling for more protection for investors against unscrupulous property investment advisers and marketeers.
The Chair of the Committee Mr Johan Scheffer MLC said that, “The Committee was asked to review the regulation of property investment advisers and marketeers. The aim of the Committee's inquiry was to identify strategies that would help protect Victorian consumers from exploitation while minimising costs to business.”
“More Victorians have been investing in property than ever before and the Committee heard that many are just not aware of the financial risks involved.”
The Committee heard that advisers and marketeers dealing with direct property investment are relatively unregulated compared with financial product advisers, who have to meet licensing, conduct and disclosure requirements under the Commonwealth Government's financial services regulation.
“Anyone can set up business as a property investment adviser or marketeer in Victoria ,” Mr Scheffer said.
The Committee has recommended that the Victorian Government renew calls for the Commonwealth Government to extend its financial services regulation to property investment advisers.
“The Ministerial Council on Consumer Affairs, which consists of Commonwealth, state and territory consumer affairs ministers, has been looking at this issue since 2003 but there has been no agreement on a national solution so far,” Mr Scheffer said.
The Committee has recommended that the Victorian Government introduce its own regulation to protect Victorians if governments cannot agree on a national solution at the Ministerial Council's next meeting.
The Committee has also recommended that the Victorian Government:
- legislate to require all property investment marketers and sellers to provide simple ‘product disclosure' information to potential investors
- develop a strategy for timely and targeted consumer warnings about unscrupulous property investment advisers and marketeers
- publish a free information booklet about property investment and examine other ways to improve financial and consumer literacy
- publish more information about property sales in Victoria to improve transparency in the property investment market
- urge lenders to alert borrowers when the lender's valuation of a property is 10% or more below the sale price for the property
- take steps to improve access to dispute resolution services.
“The Committee has tried to strike a fair balance between the interests of consumers and the interests of legitimate businesses in this industry,” Mr Scheffer said.
The Committee has recommended that governments work with the industry to implement a number of its proposals. The Committee has also called on the Victorian Government to urge industry associations to review and enforce their own codes of conduct.
“On behalf of the Committee, I would like to thank everyone who participated in the inquiry,” Mr Scheffer said.
The Victorian Government has six months to table its response to the Committee's recommendations in the Parliament.
A copy of the Committee's report can be obtained from the Committee's website http://www.parliament.vic.gov.au/lawreform or by contacting the Committee on 03 8682 2851.
For further information or comment contact Ms Kerryn Riseley, Executive Officer, Victorian Parliament Law Reform Committee: 03 8682 2850
From Brian Tee MLC, Chair
29 June 2007
Today the Law Reform Parliamentary Committee called for public submissions on the provision of property investment advice in Victoria.
The chair of the Committee Brian Tee said that, “the emphasis of the Committee’s Inquiry is on preventing the exploitation of Victorians.”
“The inquiry will also consider the respective roles of the Victorian and Commonwealth Governments in regulating financial and property investment advice.”
“Unlike investment advice or advice on financial products, property investment advice is largely unregulated in Victoria.”
“There are a variety of people offering property investment advice ranging from real estate agents and financial advisors to property marketing companies.”
“We are conducting a health check on the industry in Victoria,” Mr Tee said.
“I encourage all sectors of the industry, those who give and those who receive advice, including mum and dad investors who have relied on advice, to put in a submission.”
“For the purposes of the Committee’s inquiry, ‘property investment advice’ includes advice from an individual advisor, as well as marketing campaigns and ‘educational seminars’ promoting investment in a particular property or property in general.”
The closing date for submissions is 7 September 2007. The Committee is due to table its final report in Parliament on 31 March 2008.
A copy of the terms and reference and call for submissions can be obtained from the Committee’s website http://www.parliament.vic.gov.au/lawreform