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New Sale and Purchase Agreement!

We are pleased to announce that a new edition of the REINZ/ADLS Agreement for Sale and Purchase will be released on 6 December 2019 via eforms. The new edition (Edition 10) has taken 18 months to prepare, following feedback from our industry and legal experts. The changes bring the Agreement up to date with current laws and include a number of significant and useful changes that licensees need to be aware of, including:

• Changes to the finance condition, requiring purchasers to provide evidence if they can’t raise finance
• A toxicology report condition has been included in the general terms
• A detailed process to resolve compensation disputes between vendors and purchasers has been added
• 'Fixtures' and ‘chattels’ have been removed and replaced with new definitions and warranties
• The GST clauses have been revised
• The timeframe in which deposits may be released has been clarified
• References to fax machines have been removed
• Various other changes to language and formatting.

A marked up copy with all the changes is now available here.

REINZ has released two free webinars explaining the changes and we strongly urge agencies to ensure that licensees have viewed these webinars before the new form is released. Webinar details are as follows:

1. 10th Edition: Key Changes for Real Estate Agents (45 mins)
   Lisa Gerrard, REINZ
2. GST Changes (30 mins)
   Allan Bullot, Deloitte

Click here to register for the Key changes webinar

Click here to register for the GST changes webinar

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Case Update: Great example of a professional agent here!

The complaint was made by a purchaser of the property which was listed by the Licensee.

What was the complaint?

1. On 23 October 2018, the purchaser met with the Licensee to make a backup offer of less than $770,000. The Licensee allegedly refused to let them sign an offer less than $770,000 as the existing conditional offer in place was greater than $770,000.
2. The Licensee allegedly told the purchaser to not arrange for a building inspection until the finance condition was satisfied
3. Prior to the purchaser declaring the contract unconditional, the Licensee allegedly advised him that the purchasers of the first offer had advised the Licensee that they were now able to represent another backup offer to the Vendor. The purchaser then felt pressured
4. After settlement the purchaser had a further building report that showed the roof had a leak and rotten borer timber and the bathroom floor needed repairs.

What did the Complaints Assessment Committee (CAC) decide?

Offer

The CAC decided that the Licensee was acting on the vendor’s instruction in that he was permitted to only present offers greater than the purchaser’s original offer. The Licensee corroborated this by providing an email evidencing that the vendor refused to negotiate with prior offers of below $753,000 and was considering taking the property off the market.

The CAC noted that the purchaser resubmitted a higher offer two days later and the vendor accepted this.

Building Report

The CAC found that the Licensee was trying to act in the purchaser’s best interest, just in case their finance was not approved, to save them costs.

The CAC found that the purchaser still had 5 working days once finance was approved to find the builder’s report acceptable. The CAC noted that a building inspection took place on 5 November 2018 which was five days prior to satisfaction.

Pressure situation

The CAC found that the Licensee had a duty of care to the purchaser to advise that the original purchasers were able to make another offer (they had arranged a new finance lender).

Not misleading

The CAC found that the Licensee had not misled the purchaser about the property insulation and had referred them to getting their building inspection company to check it out.

The CAC also acknowledged that the Licensee provided a tv aerial, phone line, power point repair at his own costs.

No disclosure issue

The CAC found that the Licensee had no red flag indicators of the issues (roof leak/borer) and that a reasonable competent Licensee would not be expected to inspect a roof cavity or crawl under the house to inspect a sub-flooring framing area.

The CAC further noted that the purchaser had building inspections carried out and these reports included inspections of the roof cavity and under house structure. The vendor subsequently carried out some repairs and reduced the settlement price by $700.00. After settlement, in June 2019, the subsequent building report highlighted deficiencies in the quality of the previous builder’s reports.

Electrical certificates of compliance/warranties and LIM

The CAC stated the electrical certificates of compliance were the responsibility of the vendor.

The purchaser had stated that the Licensee had not disclosed information about the flood zone. The CAC found that the LIM report that the purchaser was referring to was before the property was placed on the market on 10 August 2018 and addressed to a third party.

The purchaser’s agreement was subject to LIM approval therefore, the CAC took no further action.

Finding

The CAC decided not to inquire into any of the complaints.

Click here for the decision

Tips:

• Always obtain vendor’s instructions in writing or confirm their instructions in writing.
• Always ensure that any red flags are duly noted and acted on.

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2019 Financial Intelligence Unit National Risk Assessment released

The New Zealand Police Financial Intelligence Unit (FIU) published an updated assessment of the money laundering and terrorism financing risks New Zealand faces.

REINZ provided feedback on the National Risk Assessment and is happy to see that most of our feedback has been taken on board by the FIU.

The National Risk Assessment sits at the top of New Zealand’s three-tier AML/CFT risk assessment system, above sector risk assessments by the AML/CFT supervisors and assessments by individual businesses of their own operations.

The National Risk Assessment provides an overview of:

• the nature of money laundering and financing of terrorism (ML/FT) threats, both domestic and offshore, faced by New Zealand
• the development of the regime
• the key ML/FT vulnerabilities faced by New Zealand, including:
  • high-value goods and real estate assets – given their ability to store wealth or move value
  • international wire transfers – given the scale of money moving through those channels
  • alternative payment methods and remittance systems – allowing the movement of value in a potentially less-regulated manner
  • new technology – where the environment allows vulnerabilities to emerge quickly and alternative methods for moving value to develop
  • gatekeeper professional services – that may conceal beneficial ownership, create further steps in the chain to frustrate detection
  • the use of cash - given its anonymity, flexibility, independence from formal financial institutions and general lack of records or a transactional trail
  • the use of businesses as fronts.
• the estimated volume of domestic criminal proceeds generated in New Zealand, being NZ$1.35 billion (consisting of NZ$750 million from drug offending, NZ$500 million from fraud and NZ$100 million from other offences, and excluding tax offending and overseas offences)
• the interaction between the New Zealand and the global AML/CFT landscapes, and the attractiveness of New Zealand to those seeking to commit ML/FT
• the conclusions drawn by sector risk assessments
• risks and ongoing issues anticipated to emerge, including around:
  • correspondent relationships – creating a chain of relationships rather than direct transactions between the parties
  • the displacement of transactions from more regulated sectors to less controlled sectors
  • de-risking by deciding not to conduct business with entire classes of customer rather than managing the risks posed by individual customers, which does not align with the risk-based approach to combating ML/FT and may have wider social consequences
  • technological change in – particular, the generation of proceeds through cybercrime, the development of technology that increases anonymity, the increasing speed of transactions and the facilitation of international transactions.

We recommend members read the National Risk Assessment as it may assist you in developing a deeper understanding of the reasons behind your obligations.

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Working days over Christmas

For the purposes of the REINZ/ADLS Agreement for Sale and Purchase of Real Estate, ‘working days’ over the Christmas break do not include any day beginning from Tuesday 24 December and ending on Friday 3 January (inclusive). The first working day is Monday 6 January. This is in clause 1.1 (33)(c) of the sale and purchase agreement.

The exception to the above is the calculation of the 15 working days approval period for the LIM report under clause 10.2 (2). In that case, ‘working days’ does not include any day beginning from 24 December and ending on 15 January (both days inclusive).’

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Unsure about something? Head to Advisory Resources on our website

Advisory Resources is a virtual library that provides members with a variety of information, best practice guides and templates to assist with the compliance and legal aspects of real estate.

You can find help on various topics such as:

Click here to access Advisory Resources

Feel free to direct any compliance related questions you have to advisory@reinz.co.nz

• Agency Agreements
• Anti-Money Laundering
• Advertising and Marketing
• Auctions
• Conjunctional Arrangements
• Disclosure
• Overseas Investment Act
• Privacy
• Tenders

Health & Wellbeing Survey - just two weeks left to complete!

We would appreciate your views on this important area.

In July we surveyed our members on general aspects of health, wellbeing and workplace performance. Based on general findings we identified a significant number of people were concerned about work/life balance and stress in the workplace. REINZ is currently developing a 6-month programme to help address these, alongside other wellbeing issues, so that you can optimise your performance in 2020.

We need your feedback to help shed more light on the issues identified in our earlier survey and to help shape our new 6-month programme. We’d appreciate you taking some time to complete our survey. You’ll also go into the draw to win a $150 Prezzy Card.

Click here to complete the survey.

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Non-Verifiable Webinar Packages

REINZ is pleased to have launched 4 brand-new non-verifiable webinar packages. These have a great variety of topics and speakers and are an excellent way of completing your CPD hours before the year is over.

Click here for more information

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Anti-Money Laundering online verifiable training

There are no exemptions from this topic in 2019 so make sure you complete this by 31 December 2019.

Book Here.

Thank you to everyone who came along to the REINZ | Real Women in Real Estate Cocktail evening and to those that came along to the 2019 REINZ Bowls Tournament. 

Click here for photos of the REINZ | Real Women in Real Estate Cocktail event.

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2020 REINZ Events

Check the REINZ Events Portal for 2020 event dates and details as they are confirmed.

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2020 REINZ Fishing Tournament

Friday 6 March, Royal Akarana Yacht Club

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Save the date

Commercial & Industrial Breakfast - Wednesday 25 March, Ostro Brasserie and Bar, Auckland

Residential Property Management Conference - Friday 7 August, Pullman Auckland

Awards for Excellence Gala Dinner - Tuesday 1 September, Cordis Auckland

Updated Statistics Portal tutorial videos

The tutorial videos for the Statistics Portal have now been updated and are available under the Help & Guides tab in the Statistics Platform.

If you would like any further assistance, please contact Gloria.

REINZ warns house hunters: Change coming this Friday

"This is a significant change to the sale and purchase agreement and it's imperative that consumers understand the implications as if they can't provide evidence they can't raise the finance, they could be forced to proceed with the purchase or face other legal action by the vendor," said Bindi Norwell, REINZ Chief Executive.

Read more here

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On the blog: Work smarter, not harder

It is so easy to get caught up in being busy, that we sometimes forget to slow down and focus on being productive. In a world that seems to value being “busy”, we need to restrategise the way we work and start working smarter, not harder.

Read the blog here

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.