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In The Know

2 March 2018

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REINZ Information Sheet on New Anti-Competition Laws

This week we have released an Information Sheet on anti-competitive conduct, which covers what you should know about the new anti-competition provisions introduced to the Commerce Act in mid-2017. Businesses have until May 2018 to ensure your existing commercial arrangements comply with the new provisions.

It is important to understand what you can and cannot discuss with competitor agencies, since breaching competition laws can generate substantial penalties and negative publicity. Our Information Sheet is intended as a guide that is easy to understand with practical examples.

If you have any questions about the Information Sheet, please contact Sonia Ng, Lawyer, REINZ Advisory Services.

2018 Verifiable Education

The Queenstown Verifiable Training Seminar is scheduled for 21 – 22 March.
Registrations close on Monday 12 March - a late fee of $50 +GST per person will be applicable after this date.

All Verifiable Education Videos will be available online from Monday 5 March.

Check out our Education page for all our nationwide sessions happening this year.

PLUS exciting new Non-Verifiable courses have been added for 2018, you can find them all here.

Please note: numbers are limited in some locations, so please make sure you secure your spot.

Region Dates Location  
Queenstown 21 - 22 Mercure Queenstown Book Now
Auckland Central 4 - 5 REINZ Centre of Excellence - Grafton Book Now
Dunedin 11 - 12 The Dunedin Centre Book Now
Gisborne 11 - 12 Emerald Hotel Book Now
Thames 2 - 3 War Memorial Civic Centre Book Now
Whangarei 9 - 10 Toll Stadium Book Now
New Plymouth 16 - 17 Novotel Book Now
Hamilton 23 - 24 Hamilton Working Mans Club Book Now
Invercargill 23 - 24 Ascot Park Hotel Book Now

Upcoming REINZ Regional Meetings

This is your chance to hear Bindi Norwell speak about what’s happening at REINZ and your region. Also join Dame Rosanne Meo in her final year as Chair.

Ashuburton Regional Meeting
Friday 23rd of March
10am – 12pm

Christchurch Regional Meeting
Friday 23rd March
3pm – 5pm

RPM Sector Breakfast 6 March 7.30am – 10am Wellington
Ashburton Regional Meeting 23 March 10am – 12pm Hotel Asburton, Ashburton
Christchurch Regional Meeting 23 March 2pm – 4pm The Tannery, Christchurch
Gisborne Regional Meeting 6 April 4pm – 6pm Emerald Hotel, Gisborne
C&I Sector Breakfast 10 April 7.30am – 10am Hotel Pullman, Auckland
Superstars Breakfast 1 May 7.30am– 10am Grand Millennium, Auckland
NZ Auctioneering Championships Draw 17 June 5.30pm – 7.30pm REINZ, Auckland
NZ Auctioneering Championships Heats 18 June 10am – 5pm REINZ, Auckland
NZ Auctioneering Championships Finals 19 June 10am – 6pm REINZ, Auckland
Manawatu & Wanganui Regional Meeting 20 June 4pm – 6pm Manawatu Golf Club, Palmerston North

Auckland Property Management Forum

REINZ’s inaugural Auckland Property Management Forum was held on 27 February. Steve Watson, National Manager Compliance & Investigations from MBIE’s Housing and Tenancy Services, addressed the Forum and provided useful information about the Compliance and Investigation Team’s focus and objectives in the coming months. Information and statistics about the types of claims being brought through the Tenancy Tribunal were presented, followed by some robust discussion about insulation requirements. Finally, attendees were given a sneak preview of the new data products REINZ is developing for Property Managers. Excellent feedback has been received from those who attended the Forum and REINZ will be holding another in the coming months.

Case Update: Unconsented building works and unlawful rental premises

Facts: The Tenant complained about several matters, one of which concerned the legality of the premises. The tenanted premises were permitted for use as a sleepout or “garage workshop”, but not as a separate dwelling.

The Tenant produced a letter from the local council (dated after the tenancy had ended) which stated that no approval was given for the conversion of the building, no resource consent was issued for the dwelling, and no building consent was issued for the building work. The letter required the Landlord to apply for a change of use for the building, or to remove the kitchen if they no longer wish to use the building as a dwelling.

Decision: The Tribunal declined the Tenant’s claim to refund all rent paid.

The Tribunal first discussed relevant case law which held that premises which can’t lawfully be used for residential purposes are not “residential tenancies” for the purposes of the Residential Tenancies Act (RTA), and could constitute a “prohibited transaction” under section 137 of the RTA. The tenant can recover “all money paid” to the landlord if a “prohibited transaction” is entered into under section 137.

However, the Tribunal noted this general position has been significantly narrowed by the recent District Court decision Inglis v Parry [2017] NZDC 26036. The starting point for the Tribunal should be whether the premises were safe and habitable rather than whether they were “legal” (in the sense of being compliant with Council requirements).

The Tribunal found there was no evidence suggesting the premises were unsafe or that the building work was not done to code. The Council letter indicated a retrospective “change of use” application can be sought. The Tribunal held that section 137 of the RTA does not apply in this instance.

The Tribunal also found the Landlord did not breach any maintenance obligations, as she did not carry out the unconsented building work herself (it appeared the Landlord had bought the property with the unconsented work) and had not refused to comply with the Council’s request to either apply for a retrospective consent or revert the building to a non-habitable garage/workshop. The position may be different if the Landlord had carried out the building work herself or refused to comply with the Council’s request.

Property managers are encouraged to read this case as it contains a useful example of how the Tribunal may approach the issue of unlawful premises or unconsented building works at the premises.

Click here for the decision

Case Update: Providing ventilation at rental premises

Facts: The Tenant alleged the Landlord had breached section 45 of the RTA by failing to provide and maintain the premises in a reasonable state of repair. Amongst other matters, the Tenant said the front bedroom had a problem with mould since the start of the tenancy and nobody had been able to use the room during and since 2016. She presented a video of the mould in that room.

The Tenant said she raised the mould issue with the Landlord and panel heaters, window stays and a heat pump had been fitted in response. However, none of these measures had solved the problem. The Tenant produced a report from her own builder which recommended installing a window in the south side of the room to increase sunlight.

The Landlord said he was never made aware that the room could not be used during and since 2016 and that the mould had grown to the extent shown in the video. He agreed from seeing the video that the mould was unacceptable and would investigate further.

Decision: The Tribunal dismissed the Tenant’s claim in respect of the mould.

The Tribunal emphasised constant ventilation is the most basic requirement to reduce humidity at the premises. If a tenant fails to ventilate and heat the premises when the means to do so were available, then it is the tenant’s problem. The landlord must provide the necessary means to heat and air the premises.

The Tribunal accepted that the Landlord in this case had provided the Tenant with the means to ventilate the premises, but the Tenant had not utilised them to the full extent. It does not accept the recommendation from the Tenant’s builder that an extra window be installed. That is beyond what would be expected from a landlord. It further accepted the Landlord’s undertaking that he will investigate further now that he is aware of the true condition of the mould as shown through the video.

Click here for the decision

Disclaimer: The information in these case summaries is for general informational purposes only and may only discuss some, not all, aspects of a case. It does not constitute legal or other professional advice and does not replace your company’s internal policies and guidelines. Always check your company’s guidelines, policies and information first and seek legal advice if you have any queries.

Case Update: Non-disclosure of Land Fill Activity a Breach of Rules

Facts: The Licensee was selling a property. The complaint concerned several matters, but the main allegation related to the Licensee’s duty of disclosure about a land fill activity that she knew or should have known about.

The Complainant advised that the consented activity was for up to 93 truck and trailer loads per day, 6 days a week for 10 years. The activity came within 20m of the boundary and would have adverse impacts on the property due to noise, dust and vibration.

The Licensee said she was not aware of the land fill proposal until the Complainant told her about it shortly before the property was due to settle. The Licensee said she had researched the property but did not discover any information about the activity. She believed the Complainant should pursue the matter with the vendor for failing to disclose the matter to the Licensee.

Decision: The CAC found the Licensee guilty of unsatisfactory conduct.

Evidence from third parties showed the proposal regarding the activity was well known in the local community and generated significant concern amongst residents. At the time there was also media coverage along with signs erected by residents opposing the proposal.

Back in 2009, the Licensee was also involved in a conjunctional sale of the Property to the current vendor, where full disclosure about the proposed activity was made. The proposal failed at the time but a consent was eventually granted for the activity in 2011.

The CAC determined that the Licensee should have known about the activity and her prior knowledge of the failed application back in 2009 should have warranted further investigation of this issue when she was engaged by the current vendor to sell.

Click here for the decision

Feedback welcomed for review of Agreement for Sale and Purchase of Real Estate

REINZ and the Auckland District Law Society are undertaking a full review of the standard REINZ/ADLS Agreement for Sale and Purchase of Real Estate form. This revision concerns the content and clauses within the Agreement (not just formatting and style). We welcome any industry feedback on changes you would like to see to the agreement. We are especially interested to hear about issues that are prominent for the industry, e.g. methamphetamine testing. Comments can be sent to Sonia Ng.

Reminder about compliance when using drones

There have been a number of negative articles in the press recently about the use of drones. As drone photography and footage is increasingly utilised in real estate marketing we encourage ethical and legally compliant usage of drones and remind you to please be aware of relevant civil aviation and privacy laws to prevent complaints.

Please refer to our Information Sheet on drones for an overview of your obligations.

REINZ works in partnership with NetYourJob recruitment to provide maximum industry coverage when you’re looking for real estate staff. NetYourJob can provide REINZ Members with competitive marketing rates for job advertising. Contact NetYourJob on 0800 638 968 to find out more or click here to view new jobs this week.