The Western Australia state government believes buyers and sellers of property in the state won’t be worse off after announcing fees charged by settlement agents and land valuers will no longer be capped.
From 3 February, the government will no longer enforce a maximum limit on what can be charged by settlement agents and valuers, believing there is sufficient competition to ensure consumers are not faced with exorbitant fees.
“The fee caps for settlement agents and land valuers were imposed in pre-internet days when information on charges wasn’t easily accessible, and there was a risk that consumers could be charged excessive fees,” WA Commerce Minister Michael Mischin said.
“Industry data also reveals that, in practice, our competitive marketplace has resulted in the fees charged by settlement agents and land valuers being reasonable and well below the maximum amounts set by the Government,” Mischin said.
While the government will no longer regulate what can be charged, it is requiring greater transparency by strengthening codes of conduct for those in the industry.
Valuers and settlement agents will be required to disclose their prices in writing before entering into an agreement with a client and they will be prohibited from charging clients a higher fee unless there is a significant change in the scope of the work.
“Removing the cap and deregulating fees will allow service providers greater flexibility to cater for the differing needs of their clients and the varying complexity of work involved,” Mischin said.
“The strengthening of the codes of conduct as well as stronger safeguards contained in the Australian Consumer Law means that WA consumers will be well protected when engaging the services of a settlement agent or land valuer after the fee caps are removed,” he said.
The move has been welcomed by the Real Estate Institute of Western Australia (REIWA), who believes similar deregulation in the past shows there will be no adverse impacts.
“REIWA supports the Government’s decision to deregulate the fees charged by settlement agents and land valuers,” Neville Pozzi, REIWA chief executive officer, said.
“We support any initiative that streamlines processes without threatening consumer protection. The Western Australian real estate fees were deregulated in November 1998 and there were no adverse impacts on agents or consumers,” Pozzi said.
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