Here are some frequently asked questions on the Real Estate Agents Act 2008 and the Real Estate Agents Authority.
If you are about to buy or sell a property, you can find out more in the Buyers and Sellers section of this website.
What changes does the 2008 Act make?
Why was the law changed?
What do the new licensing requirements mean for buyers and sellers of property?
How does the Real Estate Agents Authority benefit buyers and sellers of property?
What happens when I raise a concern about a licensee's behaviour?
What penalties can a Complaints Assessment Committee (CAC) order?
What happens in serious cases?
Can decisions of the Complaints Assessment Committee and the Real Estate Agents Disciplinary Tribunal be appealed?
Who sits on the Real Estate Agents Authority Board and the Real Estate Agents Disciplinary Tribunal?
Do the law changes affect what I pay for real estate services?
How can I find out more?
What changes does the 2008 Act make?
The key changes introduced by the new Act are:
- agents, branch managers and salespersons must all be licensed individually
- an independent Real Estate Agents Authority is established that is responsible for licensing, complaints, disciplinary action in relation to unsatisfactory conduct, industry standards, and providing information for buyers and sellers
- new independent, fair and open process for addressing concerns about licensee's behaviour, including the appointment of Complaints Assessment Committees and the establishment of an independent Real Estate Agents Disciplinary Tribunal
- new responsibilities apply to real estate licensees, including duties in relation to the information that must be provided to buyers
- it is no longer compulsory for agents to be members of the Real Estate Institute of New Zealand (REINZ).
Why was the law changed?
In 2007 the Government issued a public consultation paper, The Government's Preferred Options for Reform of the Real Estate Agents Act 1976. The report identified a number of issues that needed to be addressed, including:
- a need for more independent oversight of entry standards, conduct and complaints handling
- people did not have sufficient information about how to make complaints
- there was a lack of independence and transparency in the complaints process, and penalties were inadequate
- people needed more information when buying or selling property.
What do the licensing requirements mean for buyers and sellers of property?
All agents, branch managers and salespersons have to be licensed and people have better access to information about people working in the industry. There is a public register which shows who has a licence, and records whether a licensee has had any disciplinary action taken against them as an individual in the last three years by the Real Estate Agents Authority or the Real Estate Licensing Board.
How does the Real Estate Agents Authority (REAA) benefit buyers and sellers of property?
The REAA plays a key role in ensuring the quality and professionalism of the real estate industry. The REAA:
- provides a code of professional conduct and client care for agents, branch managers and salespersons which those working in real estate must follow
- provides higher industry standards through increased entry requirements and continuing education
- provides information for buyers and sellers of property
- investigates concerns about the behaviour of licensee's.
What happens when I raise a concern about a licensee's behaviour?
We have a fair and impartial process for addressing concerns about a licensee's behaviour. The first thing that will happen when you contact us is that your concern will be assessed to determine the most appropriate response. The response will be one of the following:
- Information: if the concern does not relate to real estate agency work and the behaviour is not misconduct, we will provide you with the appropriate information and refer you to an agency that can help you.
- Compliance advice: if little or no detriment resulted from the licensee's behaviour, the behaviour is not on-going, the licensee has not had any previous compliance problems and there are no other wider public interest issues as a result of the behaviour, we will send the licensee a compliance advice letter.
- Alternative Dispute Resolution (ADR): if the concern is only between you and the licensee doesn’t involve issues of wider public interest and is capable of being resolved between you and the licensee, ADR is the best way to resolve your concern.
- Enforcement: if it is a serious concern and does not fit into one of the above categories it will be heard and dealt with by a Complaints Assessment Committee as a formal complaint. Generally these are concerns where there was an intention to breach the law or the relevant Rules and Regulations, the licensee has previously engaged in similar behaviour or there is a wider public interest in the behaviour being fully investigated and considered.
This approach means that concerns will be responded to in a way that is appropriate to their seriousness and both the person raising the concern and the licensee will have timely and satisfactory resolution of concerns.
What penalties can a Complaints Assessment Committee (CAC) order?
Where a CAC finds that the licensee has engaged in unsatisfactory conduct, it has a range of measures at its disposal to deal with the complaint, such as:
- reprimanding the agent, branch manager or salesperson
- requiring the agent, branch manager or salesperson to do any of the following:
- make an apology
- undergo further training
- refund fees
- rectify an error
- pay a fine of up to $10,000 in the case of an individual or $20,000 in the case of a company
- pay the complainants costs of the inquiry or investigation.
What happens in serious cases?
In serious cases appearing to involve misconduct, a Complaints Assessment Committee can lay a charge with the Real Estate Agents Disciplinary Tribunal (the Tribunal).
If the Tribunal determines that the licensee is guilty of misconduct it can impose a more serious range of penalties, including:
- cancelling or suspending the agent's, branch manager's or salesperson's licence
- ordering the licensee's employment be terminated and order that no agent employ or engage that person in connection with any real estate agency work
- ordering the licensee to pay compensation to the complainant for any actual loss suffered up to $100,000.
Can decisions of the Complaints Assessment Committee and the Real Estate Agents Disciplinary Tribunal be appealed?
A decision made by a Complaints Assessment Committee on a complaint can be appealed to the Real Estate Agents Disciplinary Tribunal. A decision of the Tribunal can be appealed to the High Court, whose decision is final, apart from questions of law, which can be appealed to the Court of Appeal.
Who sits on the Real Estate Agents Authority Board and the Real Estate Agents Disciplinary Tribunal?
The Real Estate Agents Authority (REAA) Board has seven members appointed by the Minister of Justice, with members representing a broad range of interests, including consumer and industry interests. The Chairperson must be a lawyer with not less than seven years legal experience. Two members must be licensees or former licensees. Details of our current Board can be found here.
Complaints Assessment Committees are appointed by the REAA and must have three members, one of whom must be a REAA member. One member must be a lawyer with not less than seven years legal experience.
The Real Estate Agents Disciplinary Tribunal has a Chairperson and up to four other members, who are also appointed by the Minister of Justice. The Chairperson must be a barrister or solicitor with not less than seven years legal experience. One member must be a member of the real estate industry. The Disciplinary Tribunal is serviced by the Ministry of Justice.
Do the law changes affect what I pay for real estate services?
Fees and commission continue to be something that clients should negotiate with their agent.
How can I find out more?
You can find out more in the buyers and sellers section of this website, or by calling us on 0800 367 7322 or (04) 471 8930 or emailing us at info@reaa.govt.nz.
