RVC chalet service legality challenge defence successful

Ruapehu Bulletin, Volume 13, Issue 612, 14 November 1995, Page 1

RVC chalet service legality challenge defence successful

The Ruapehu Visitors' Centre is legally entitled to continue to rent chalets out to tourists on behalf of absentee owners on a fee referral basis. The confirmation of the centre' s existing activity comes as a result of a hearing before the Real Estate Agency Licensing Board, of a challenge by Terry Podmore of Ruapehu Realty regarding the legality of the centre being granted a licence. Mr Podmore' s case concerning chalet management was hinged on three factors: the council was not licensed to manage property; any need in the community for property management services was now filled with the establishment of Ruapehu Realty; and the Council had a competitive advantage over Ruapehu Realty. He challenged the council' s legality to operate without a permit under the Real Estate Agent's Act 1 976. Under a clause in the REA Act a departure from the licensing scheme is legal if special circumstances apply. Mr Podmore contended that before he set up business special circumstances applied — there was no

permanently established real estate agency in Ohakune, and so council and Alpine Property Management, and others were supplying property management services where otherwise there would be none. He argued that now Ruapehu Realty existed, council had no grounds to apply for special dispensation and therefore would have to become "duly and properly" licensed before it

could legally operate. Giving evidence on behalf of Ruapehu District Council was a barrister from Auckland (MrVane), Bruce Rollinson marketing manager for Ruapehu District Council and Katie Bramwell, supervising information officer at the Ruapehu Visitors' Centre. Activity insignificant Mr Vane said that council did not concede that its Turn to Page 2

RVC chalet service legality challenged

Frorn Page 1 activities fell within the scope of the REA act as only one service was provided and that servicing 18 chalets, council's activity was insignificant, but council was going to apply for a permit any way so as to erase any possibility of doubt. Mr Podmore charged that Ruapehu Realty fully serviced the community and the council's presence was superfluous as were the presence of Rodger Bransgrove, Anne Cuttelli and Laurie Hocquard who hold remote salespersons certificates. Mr Podmore also applied for the cancellation of the remote salesperson certificates held by Rodger Bransgrove, Anne Cuttelli and Laurie Hocquard ( W anganui). As evidence he presented

results of a telephone survey where 1 30 people more or less affirmed his view. Miss Bramwell and Mr Rollinson argued that short term accommodation was a service that tourists associated with a visitors' centre, rather than a real estate office. Mr Podmore reluctantly agreed. The Real Estate Institute found that Mr Podmore' s survey results were invalid and should therefore be disregarded as evidence. Competitive advantage Mr Podmore said that the council had a competitive advantage over private enterprise. Mr Vane said council's property management operations did not interfere with competition as Mr Podmore himself had

proved by securing 15 chalets for Ruapehu Realty in the three months that Ruapehu Realty had been operating. Miss Bramwell added that the visitors' centre did not actively advertise or solicit management of additional properties to the 1 8 it currently has on its books. She said their advertising is directed more to publicising its ability to make accommodation arrangements upon request. When questioned by the Bulletin about the council operating alongside the private sector, Bruce Rollinson said "in this case the council was on very firm ground," and "it was a matter of the public good (services provided by the information centre) outweighing the good of private individuals." Mr Rollinson also said it was council's intention to make the visitor's centre more commercial. Mr Vane said the visitors' centre had an invaluable role in the local economy as staff often directed visitors to tourism ventures. However, directing tourists was not a viable activity in itself and the commission received from managing the chalets was

used so the information centre could stay open and disperse information that was of benefit to the local economy. He said if the information centre lost the right to manage chalets, the loss of revenue would be reflected in the services and the hours the visitor's centre could be open. Mr Podmore, when questioned by the Bulletin said "I don't believe a local authority should be actively competing with its ratepayers in other than its standalone established companies." In conclusion the Real Estate Institute said that the law as it stands permits the Ruapehu District Council to legally operate. It also noted that a principle of the act was that competition could not a be factor in its decision. Ruapehu District Council was granted a permit to operate, on the conditions that it established a trust account and appoint an independent auditor. Lack of competition unhealthy The holders of remote salesperson certificates presented strong cases for the retention of their certificates. They expressed con-

cern that if their licences were cancelled real estate services would only be supplied by one agency and they argued the lack of competition would be unhealthy, Ruapehu Realty was a new and yet unproved agency, the holders of the certificates have been operating for five years and an adverse decision would see them lose their livelihoods. Jan Carver of Alpine Property Management was not required to attend the hearing, although in a written submission Alpine Property Management supported the people holding the remote salesperson' s licences and the Ruapehu District Council. "There is enough business in this area to go around for everyone," she said. Mr Podmore also told the Bulletin that he had no intention of opposing the granting of licences in the future and that the hearing was a process that was necessary because of the changing real estate environment.