Police vetting and licence applications

A recent decision by the Court of Appeal has brought to a close a series of proceedings that have focused on what information the Registrar of the Real Estate Agents Authority (REAA) can take into account when licensees apply for the annual renewal of the

A recent decision by the Court of Appeal has brought to a close a series of proceedings that have focused on what information the Registrar of the Real Estate Agents Authority (REAA) can take into account when licensees apply for the annual renewal of their licence. 


Previous vetting by REAA
From its establishment up until mid-2016, REAA obtained full criminal history information from NZ Police, including convictions, discharges and pending charges, when considering licence applications and renewals. The Registrar would also receive other information considered relevant by Police to the fit and proper decision. This practice is described as Police vetting. The majority of licensees will not have been affected by this practice, as we have had results returned from Police on only approximately 5% of all applications and renewals. Information from Police that went beyond pure conviction history was limited to an even smaller subset of licensees. Most information received from Police was generally not significant enough to prevent renewal of a licence. However, we considered that it was important to be aware of the small number of cases where it was.

The purpose of the Real Estate Agents Act is to promote and protect the interests of consumers in respect of transactions that relate to real estate agency work and to promote public confidence in the performance of real estate agency work. One of the ways REAA gives effect to this is by raising industry standards and administering the licensing regime. REAA carried out Police vetting because it considered it of utmost importance to take all relevant information into account when considering a person’s fitness to hold a licence. Real estate agents hold a position of trust and responsibility when they interact with their clients and members of the public and are routinely given unfettered access to their clients’ homes and businesses. REAA considers that it is in the best interests of consumers, and also those in the industry, to maintain a high standard for the granting and renewal of licences. Whether warranted or not, misdemeanours by a small few often make news headlines and can have the effect of tarnishing the whole industry, thereby leading to an overall decrease in public confidence. However, we know that, since the inception of REAA, standards of professionalism within the industry have increased, education levels have increased and the vast majority of licensees take their responsibilities under the Act and Code of Conduct very seriously. This is something REAA seeks to promote, and it goes hand in hand with ensuring that those entering and remaining in the industry are fit and proper to hold licences.

Litigation history
In 2016, following an application by a licensee, the High Court issued a declaratory judgment that limited the amount of information REAA could obtain from Police when carrying out checks on new and existing licensees. The High Court decision limited the information that could be obtained by REAA to the following categories:
  • Convictions and sentences, penalties or orders imposed as a result of conviction, including infringement offences with a maximum penalty of $10,000 or more.
  • Pending charges that a person may be facing, but only charges for which the person could elect trial by jury, or infringement offences with a maximum penalty of $10,000 or more.
  • A record of discharges without conviction or charges that resulted in diversion, but only in respect of charges for which a person could elect trial by jury, or infringement offences with a maximum penalty of $10,000 or more.

On receipt of the High Court’s decision, REAA amended its licensing forms and limited the information it obtained from Police to the terms set out by the Court.

Appeal by REAA
At the same time, REAA appealed the High Court decision because it was concerned that the limits placed on the information that could be obtained by the Registrar were arbitrary. REAA was also concerned because the decision had the effect of tying what information could be considered as part of the Registrar’s fit and proper assessment to the information that licensees could be compelled to consent to be provided by Police. This meant that information that might clearly be relevant to a person’s fitness to hold a licence would not be able to be taken into account by the Registrar unless it fell within one of the categories listed by the High Court. 

Court of Appeal decision
The Court of Appeal issued a decision at the end of May. The decision overturned the limits imposed by the High Court on the categories of information the Registrar could obtain from Police:

  • ​Licence applicants are required to authorise the disclosure of their criminal history to the Registrar at renewal time. Criminal history means:
    • a record of any convictions, sentences and orders received by a person 
    • a record of any charges that resulted in diversion
    • a record of any charges that resulted in discharge without conviction
    • but does not include pending charges or any interaction with Police in a capacity other than that of a defendant.
  • ​REAA can make specific enquiries of Police to obtain information relevant to a licence decision that falls outside of these parameters. but this cannot be on a mass or blanket scale.
  • The Registrar can require licence applicants to disclose relevant information regarding their fitness to hold a licence.
  • REAA cannot require applicants to submit to full Police vetting. 
On receipt of the Court of Appeal decision, REAA took immediate steps to ensure that the information we receive from Police complies with the term of the decision. While we are disappointed that REAA may not carry out full Police vetting, we consider the fact that the Court of Appeal removed the limits on the categories of information that can be obtained from Police to be positive. The Court has also confirmed that the Registrar’s inquiries about a person’s fitness to hold a licence are not limited to ‘criminal history’ information and go much wider than that. REAA considers this result in itself to be a much better position than where the High Court had left us.
 
What does all this mean for you?
When you next apply for a renewal of your licence, you may notice that the paper-based forms and forms on the online portal look different and you will no longer be required to fill out a separate Police consent form.
 
We are amending the forms to make it clearer to you what information is prescribed by legislation and what additional information is requested by the Registrar in order to make a fit and proper assessment.

If you have any questions about this, feel free to contact us at licensing@reaa.govt.nz​ ​