South Australia has been lagging behind other states in regulating the sector: it’s the only state that doesn’t require residential property managers to be licensed.

Consumer and Business Services Minister John Rau said commercial property managers must be registered as a land agent or sales representative under the Land Agents Act – but the requirement does not extend to the residential property sector.

He is promising to change that in order to “weed out” dodgy managers following a flood of complaints to the state’s consumer watchdog – Consumer and Business Services.

CBS receives about 180 calls a month about inadequate service or poor behaviour from property managers.

Rau said complaints included the failure of managers to repair faults such as broken hot water systems, property owners being billed for work that was never done, and the theft or misappropriation of funds.

He said two examples of the latter included alleged theft and/or misapplication of trust money – one case involving $25,000 in 2015 and the other more than $70,000 in 2014. In both cases the alleged offenders were residential property managers, but the state could only pursue the prosecution of their employers – not the individuals involved.

Under the proposed changes, CBS would be able to take disciplinary action against operators who are either unprofessional or breaking the law to ensure they either comply or can’t work in the industry.

The Government will also draft a code of conduct for the industry.

The Real Estate Institute of South Australia (REISA) welcomed the proposals, with CEO Greg Troughton saying the industry had been lobbying the State Government for years to have residential property managers licensed.

“Property managers manage vast portfolios of property worth many tens of millions of dollars and deal with complex issues between landlords and tenants every day,” Troughton said.

“It is therefore essential that they are as relevant, professional and educated as possible. This not only improves the reputation and accountability of the profession but also serves as a fantastic foundation for consumer protection.

“South Australia is the only state in Australia that currently has no requirements for residential property management licensing and it is fantastic that we are finally recognising the enormous skills and expertise required to become an effective residential property manager.”

Anglicare also welcomed the proposed reforms, with CEO Peter Sandeman saying tenants would benefit from a more consistent level of service expectations and support, and property managers would have an improved understanding of their obligations.

“A more consistent approach to property management will improve the quality of service to tenants and lead to a safer and more secure residential tenancy market,” he said.

“This will create a more robust and professional sector, where the interests of both tenants and property managers are taken into account.”

Rau said tenants and landlords should be able to have confidence that their property is being managed by a “qualified, professional property manager”.

“The proposed changes will offer better protection to both tenants and landlords,” he said.

“The code of conduct will ensure the industry is held to a clear, high standard.

“We will work with industry on what training managers might require, how standards will be set and enforced and how the scheme should be implemented.”

The registration requirement will only apply to people who are employed by a registered land agent, not those with informal arrangements to manage property for a relative, for example.

When asked by InDaily if this would create a loophole for dodgy operators, Rau’s office said anyone attempting to circumvent the rules by setting up an unregistered shop front could be prosecuted.

Rau said the Government would consult with the industry and non-government organisations before releasing a draft bill and code of conduct for public comment early next year.