NZ Real Estate Agent (L6) cheat sheet

The Real Estate Agents Act 2008 governs licensing, conduct and discipline; the Real Estate Authority (REA) administers licensing and the Complaints Assessment Committee (CAC) and Real Estate Agents Disciplinary Tribunal (READT) handle discipline.

Licence classes are salesperson, branch manager and agent (agent licence required to carry on business or be a branch manager); a salesperson must work under the supervision of an agent or branch manager.

A licence must be current and the licensee must hold a verifiable continuing professional development record; practising without a current licence is an offence.

A person cannot carry out agency work for reward unless licensed or acting under a licence; unlicensed assistants may do administrative tasks but not agency work such as negotiating or signing on behalf of a client.

The Code of Professional Conduct and Client Care (the Code) is a regulation made under the Act; breaches can found a complaint even where no contractual loss is proven.

Disclosure duties flow from the Act and the Code: a licensee must disclose conflicts of interest, known defects, and any relationship that could influence the transaction.

The REA publishes guidance and the Rules; the Act's consumer-focused purpose means disciplinary findings focus on protecting the public, not punishing the licensee.

Agency work includes selling, buying, leasing, managing, and advising on real estate for another person for reward; private sales are outside the Act's licensing regime.

Code standard 5.1: a licensee must exercise skill, care, competence and diligence; standard 6.1: must not mislead or withhold information a customer needs.

Standard 9.1 requires a licensee to act in the client's best interests within the law; standard 9.2 requires obedience to lawful instructions.

Confidentiality (standard 8) survives the end of the agency relationship; personal information is also governed by the Privacy Act 2020.

A licensee must not use a client's money or property for the licensee's own benefit, and must not acquire a client's property without full written disclosure and consent.

Gift-giving or inducements to a client's decision-maker must be disclosed; undisclosed benefits to a licensee from a third party (e.g. a developer) breach the Code.

The Code requires fair treatment of all parties: a licensee owes honesty to a buyer even when acting for the seller, including disclosing known material defects.

Bullying, harassment and discrimination are conduct breaches; the REA can act on conduct occurring in the course of agency work, including online.

When a complaint is made, the CAC may dismiss, refer to the Tribunal, or make orders including censure, fines (up to $10,000 for an individual) and licence suspension or cancellation.

Agency agreements must be in writing and signed by the client; the agreement must contain the commission, the expiry date, and a statement of the client's right to cancel.

A sole agency agreement cannot exceed 90 days; a general agency agreement is also capped, and after expiry the agreement continues only if the client agrees in writing.

The client may cancel a sole agency agreement before expiry by giving written notice; the agent may claim commission only for a buyer introduced before cancellation, subject to the agreement's terms.

Before signing, the agent must give the client the REA's approved guide to agency agreements and explain the agreement's effect.

Commission is not payable unless the agent has a valid written agency agreement and the event triggering commission has occurred as defined in it.

Disclosure of a conflict of interest, a personal interest in the property, or a referral fee must be made in writing before the client commits.

Agency agreements must not contain terms that are unfair or that contract out of the Act; unfair contract terms may be unenforceable.

Where a buyer is also a client (e.g. a buyer's agent arrangement), separate written agreements and clear disclosure of the dual role are required.

Advertisements must be truthful, not misleading, and must not create a false impression about the property, price, or the agent's role; this applies to online listings and social media.

A licensee must have the seller's written authority before advertising a property, and must not advertise a property that is already under an exclusive agency with another agent.

The advertised price must not be deliberately understated to attract enquiry; a price guide must reflect the seller's genuine expectations.

Testimonials and statistics used in marketing must be genuine, current and able to be substantiated.

Marketing costs must be disclosed and agreed in writing; the agent must account for marketing spend and refund unused amounts where the agreement requires.

Photographs and floor plans must accurately represent the property; digitally altered images that mislead about size or condition breach the Code.

The REA and the Advertising Standards Authority both apply; misleading conduct can also breach the Fair Trading Act 1986.

Auction advertising must state the method of sale and whether a reserve exists; advertising a property as 'by negotiation' when it is to be auctioned can mislead.

The standard ADLS/REINZ Agreement for Sale and Purchase is the usual contract; key terms include settlement date, deposit, conditions, and the default clauses.

A sale becomes unconditional when all conditions are satisfied or waived; the deposit is usually 10% and is held in trust pending settlement.

Auction: the property is offered without a reserve unless the seller sets one; the auctioneer may bid on the seller's behalf only if announced, and the seller's bid is not a genuine bid.

If the reserve is not reached, the auctioneer may negotiate with the highest bidder; a pre-auction offer must be disclosed to all registered bidders and the auction brought forward.

Tender: offers are submitted in writing by a closing date; the seller may accept, reject, or negotiate with any tender, and is not obliged to accept the highest.

Multi-offer: when several offers are presented, the agent must advise all parties in writing that a multi-offer situation exists and present all offers to the seller.

The agent must not disclose the amount of one offer to another buyer; the seller decides which offer to accept.

A buyer must be given the opportunity to seek legal advice and obtain a builder's report and LIM before bidding at auction, as auction sales are unconditional.

Money received for a client (deposits, rent, sale proceeds) must be paid into a trust account operated by the agent; it must not be mixed with the agent's own funds.

Trust accounts must be audited annually by an approved auditor, and the audit report is provided to the REA; a monthly reconciliation of the trust account is required.

A receipt must be issued for every trust receipt, and trust account records must be kept for at least six years.

An agent is responsible for supervising salespersons and must ensure they are licensed, trained and comply with the Act and Code.

A branch manager is responsible for the day-to-day supervision of the branch's agency work, including trust account compliance.

The agent must maintain professional indemnity insurance and have in place policies for complaints handling and record-keeping.

Trust account deficiencies must be reported to the REA; misappropriation is a disciplinary offence and may be a crime.

Commission can be paid from the trust account only after the agent is entitled to it under the agency agreement and settlement or the triggering event has occurred.