If you want to do real estate agency work you must have a licence unless you are exempt. There are exemptions for:
- lawyers and conveyancing practitioners, within the meaning of the Lawyers and Conveyancers Act (section 7 of the Real Estate Agents Act 2008 (the Act))
- licensed auctioneers (section 8 of the Act)
- any person exempted by regulation under section 156(1)(a) of the Act. There are currently no such exemptions.
What is real estate agency work?
Real estate agency work is defined in section 4 of the Act as follows:
"real estate agency work or agency work -
(a) means any work done or services provided, in trade, on behalf of another person for the purpose of bringing about a transaction; and
(b) includes any work done by a branch manager or salesperson under the direction of, or on behalf of an agent to enable the agent to do the work or provide the services described in paragraph (a); but
(c) does not include -
(i) the provision of general advice or materials to assist owners to locate and negotiate with potential buyers; or
(ii) the publication of newspapers, journals, magazines, or websites that include advertisements for the sale or other disposal of any land or business; or
(iii) the broadcasting of television or radio programmes that include advertisements for the sale or other disposal of any land or business; or
(iv) the lending of money on mortgages or otherwise; or
(v) the provision of investment advice; or
(vi) the provision of conveyancing services within the meaning of the Lawyers and Conveyancers Act 2006"
The test for real estate agency work
The five key elements of the definition of real estate agency work are listed below. If these five elements are present, then providing the work is not excluded under part (c) of the definition above, it will be real estate agency work and a licence is required.
1. any work done or services provided
"Any" means that the work done or services provided do not have to be a substantial part of the overall work done or services provided.
2. in trade
"Trade" is not defined in the Act. Section 2 of the Fair Trading Act 1986 defines "trade" as:
"Trade means any trade, business, industry, profession, occupation, activity of commerce, or undertaking relating to the supply or acquisition of goods or services or to the disposition or acquisition of any interest in land"
3. on behalf of other persons
Acting on behalf of another is of the essence of any agency.
4. for the purpose
The purpose of the provider in doing the work or services on behalf of the other person must be for the specific purpose of bringing about a transaction.
5. of bringing about a transaction
"Transaction" is defined in section 4 of the Act as:
"transaction means any 1 or more of the following:
(a) the sale, purchase, or other disposal or acquisition of a freehold estate or interest in land;
(b) the grant, sale, purchase, or other disposal or acquisition of a leasehold estate or interest in land (other than a tenancy to which the Residential Tenancies Act 1986 applies);
(c) the grant, sale, purchase, or other disposal or acquisition of a licence that is registrable under the Land Transfer Act 1952;
(d) the grant, sale, purchase, or other disposal or acquisition of an occupation right agreement within the meaning of the Retirement Villages Act 2003;
(e) the sale, purchase, or other disposal or acquisition of any business (either with or without any interest in land)."
Do trustees or investment managers dealing in trust property on behalf of a trust need to be licensed?
In general, if a trustee or investment manager is directly going out to market on behalf of their client and is facilitating a transaction, they require a licence. They are providing a service, in trade, on behalf of another for the purpose of bringing about a transaction. The five elements of the test for real estate agency work (mentioned above) are present.
If a trustee or investment manager does not directly bring about the transaction, e.g. they engage others to provide this aspect of the service, they do not require a licence.
Do agricultural consultants need to be licensed?
In general, if an agricultural consultant is bringing about the lease of a farm or property, they require a licence. They are providing a service in trade, on behalf of another for the purpose of bringing about a transaction. The five elements of the test for real estate agency work (mentioned above) are present.
Do property advisors need to be licensed?
Whether a property advisor need to be licensed or not depends on whether they are bringing about a transaction.
If they are only providing advice, they do not require a licence.
If they are marketing properties to the public, they do require a licence. They are providing a service in trade, on behalf of another for the purpose of bringing about a transaction. The five elements of the test for real estate agency work (mentioned above) are present.
Can you get an exemption from the requirement to be licensed?
Exemptions from the requirement to be licensed can be granted under the Act (section 156(1)(a)). Exemptions are granted by the Minister of Justice.
What do I do if I am not sure whether I need a licence or not?
If you are unsure about whether you need to be licensed or not, please give us a call on 0800 367 7322 or 04 471 8930 or email us at info@reaa.govt.nz and we can discuss this with you.
