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The New Real Estate Agents Act - December 2009

The New Real Estate Agents Act

 

The Real Estate Agents Act 2008 came into force on 17 November 2009 and replaces the old 1976 Act.  The aims of the new Act are to promote and protect the interests of consumers in relation to real estate transactions and promote public confidence in the performance of real estate agency work.  The Act aims to achieve this by regulating agents, branch managers and salespersons, raising industry standards and providing accountability through a disciplinary process that is independent, transparent and effective.

 

The Act establishes a new regulatory body known as the Real Estate Agents Authority, (Authority) which is independent and replaces the previous Real Estate Agents Licensing Board, which was operated by the industry.  The new Authority is responsible for licensing, complaints, disciplinary action, developing industry standards and the provision of consumer information.

 

Agents are required to provide information to consumers at various stages during the sale and purchase process.  The Authority has prepared two guide books.  The first must be given to a client when they enter into an agency agreement with the agent.  The client will sign an acknowledgment that they have received the guide.  There is a cooling off period if the client enters into a sole agency agreement.  The client can cancel in the period up to 5:00pm on the working day following the signing of the sole agency agreement (provided that if the agent does any work during that period which results in a contract for the sale of the property being entered into then that contract will be binding).  The second guide must be handed to both vendors and purchasers of residential property prior to signing an agreement for sale and purchase.  That guide sets out the process for completing the agreement and some of the main features of the agreement.  Again vendors and purchasers must sign an acknowledgment that they have received the guide.

 

The Act also introduces a new complaints and disciplinary process with less serious complaints being determined by a Complaints Assessment Committee and more serious complaints (where there are allegations of disgraceful conduct or where the agent has been seriously incompetent or seriously negligent) being determined by a new Real Estate Disciplinary Tribunal.  Both disciplinary processes can result in significant fines and other penalties.

 

Further information can be found on the Real Estate Authority website www.reaa.govt.nz.

 

Should you be considering buying or selling commercial or residential real estate, be sure to give us a call before you sign.  Please contact Tony Walker, Partner on 303 9916 or Sarah Edmondson, Associate on 303 9915 if you would like further advice on this matter.

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