NZ Certificate in Real Estate (Salesperson, Level 4) cheat sheet

The Act commenced 17 November 2009; it replaced the Real Estate Agents Act 1976 and established the Real Estate Agents Authority (REAA) as an independent Crown entity.

Licensing classes: salesperson, branch manager, and agent (agent licence required to be a branch manager or to operate a business). A salesperson must work under the supervision of an agent.

Licence must be current and the person must be engaged by a licensed agent. Advertising or carrying out agency work without a licence is an offence under the Act.

REAA functions include licensing, providing information and guidance, and promoting public confidence; it does not adjudicate complaints - that is the Disciplinary Tribunal and Complaints Assessment Committee (CAC) role.

Complaints process: complaint to REAA -> CAC decides (no further action, or refer to Tribunal or to the licensee for resolution); CAC may also lay a charge. Tribunal can impose penalties including cancellation, suspension, fines up to $15,000 (individual) or $30,000 (company) per charge.

The Act requires licensees to act in accordance with the Code of Conduct and client care rules made under the Act; breaches can be unsatisfactory conduct or misconduct.

Continuing education: at least 10 hours of verifiable CPD per year for salespersons, plus mandatory topics set by the Authority each year.

Licensees must disclose conflicts of interest and must not act for both buyer and seller where there is a conflict without informed consent and proper disclosure; the Act also restricts the licensee from buying the client's property without disclosure.

The Code (Professional Conduct and Client Care Rules 2012) sets out standards; the rules cover fiduciary duties, disclosure, client care, and agency agreements.

Rule 5: licensees must be honest, fair, and must not mislead or withhold information that should by law or fairness be provided.

Rule 6: a licensee must act in the client's best interests and not act where there is a conflict of interest, unless the client gives informed consent in writing after disclosure.

Rule 9: before an agency agreement is signed, the licensee must provide a written appraisal of the property and disclose the estimated commission and any other charges in writing.

Rule 10: the agency agreement must be in writing, contain the required prescribed information, and be explained to the client before signing; a copy must be given to the client.

Rule 7: a licensee must not disclose confidential client information unless required by law, necessary to perform the agency work, or with the client's consent.

Rule 8: licensees must disclose known defects in the property and any other information that would materially affect the client's decision.

Rule 6.4: a licensee must not use a client's money for the licensee's own benefit; trust money must be handled per the Act and regulations.

A written appraisal must be provided before the agency agreement is signed; it must be realistic and based on comparable sales, not inflated to win the listing.

Agency agreement types: exclusive agency, general agency, and sole agency. Each has different commission obligations; the agreement must state the type clearly.

The agency agreement must specify: the parties, the property, the type of agency, the commission and how it is calculated, the term (with a maximum of 90 days for a sole agency unless the client agrees otherwise in writing), and a cancellation clause.

Under the Act, a sole agency agreement for a residential property cannot exceed 90 days without written renewal agreed by the client.

Marketing: any advertising must be accurate and not misleading; the licensee must not advertise a property without the owner's written authority.

Disclosure obligations include known defects, weathertightness issues, unconsented works, and any matter that could affect the property's value or the buyer's decision.

The agency agreement must be signed by the client and the licensee; a copy must be provided to the client immediately after signing.

Commission is negotiable; the agreement must state the commission amount or the method of calculation and any GST treatment.

Auction: the property is sold to the highest bidder; the sale is unconditional on the fall of the hammer (unless the auction is subject to conditions announced before bidding). The vendor may set a reserve.

Before auction, the licensee must have a written auction authority and provide the buyer with the terms of the auction, including the reserve and any conditions.

Tender: buyers submit written offers by a deadline; the vendor may accept, reject, or negotiate with any tenderer. Tenders are not opened publicly.

Multi-offer: when more than one offer is made, the licensee must inform all parties that a multi-offer situation exists and present all offers to the vendor; the vendor chooses.

Sale and purchase agreement: the standard REINZ/ADLS form includes the parties, property description, price, deposit, settlement date, conditions (finance, LIM, building report), and the vendor's warranties.

Deposit: usually 10% but negotiable; held in the agency's trust account until settlement or as agreed; the deposit must be receipted and banked promptly.

Conditions: the agreement is conditional until conditions are satisfied; the licensee must monitor deadlines and obtain written confirmation of satisfaction or waiver.

The vendor must provide a LIM and any required disclosures; the buyer has a right to a building report and to confirm finance within the agreed timeframe.

Trust money includes deposits, rent, and any money held on behalf of a client; it must be paid into a trust account at a New Zealand bank within 5 working days of receipt.

The trust account must be audited annually by an approved auditor; the audit report is provided to the REAA.

Trust account records must be kept for at least 6 years and must include receipts, payments, and a ledger for each client.

A salesperson must not operate a trust account; only the agent (or a person authorised by the agent) may operate it. The agent is responsible for supervision.

Trust money must not be mixed with the agency's own money; the agency must maintain a separate trust account and a separate general account.

Supervision: the agent must ensure salespersons are properly supervised, trained, and comply with the Act and Code; the agent is accountable for the branch's trust account.

Reconciliation: the trust account must be reconciled at least monthly, and the reconciliation must be reviewed by the agent.

Any deficiency in the trust account must be reported to the REAA immediately; the agent must take steps to rectify it.