New rules to protect NSW property investors.
New rules enforcing compulsory professional indemnity insurance for real estate agents will provide security for investors with multiple home loans and selling investment property in New South Wales.
According to NSW Minster of Fair Trading Anthony Roberts, the new rules for compulsory professional indemnity insurance will enforce real estate agents to be covered for claims by investors buying or selling property, and anyone living in a strata scheme, if they incur a loss from negligent service by their real estate agent. "Given the risks associated with liability confronting the property industry, appropriate professional indemnity insurance cover is a must" Mr Roberts said.
Real Estate agents will be required to hold coverage for a minimum of $1 million per a claim and no less than $3 million for multiple claims over the insurance period. The insurance will also cover circumstances such as misleading or deceptive conduct, breach of professional duty, defamation, interference with intellectual property and fraud or dishonesty by an agent and insure that investors are compensated for the result.
It may come as shock to many investors that the insurance was not previously compulsory in New South Wales, although up to 75 percent of agents are believed to already be covered for the risk.
With the news that property prices are to remain flat across most of Australia, investors should also look towards reducing their home loan repayments by doing a home loan comparison and finding the most competitive interest rates available.
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