In The Know
9 October 2019
Click the headings below to read more or visit the Property Management page
On-sold over-cap properties in Christchurch
There has been significant media attention around on-sold over-cap properties in Christchurch, which have been bought since the Canterbury earthquake sequence. They were later found to have missed or poorly repaired quake damage that exceeds the EQC cap to repair and the remaining cost cannot be recovered from the private insurer.
On 15 August, it was announced that the Government will pay for repairs to these – you can read more about this on the EQC website here.
*This payment for repairs only applies to properties purchased prior to the Government announcement on 15 August 2019 and after the September 2010 quake – any property purchased after that date will not be eligible*.
Homeowners have until 15 August 2020 (12 months from announcement of policy) to register their interest in becoming part of this process.
After that, it will make undertaking due diligence on Christchurch properties during the purchase process particularly important from this point, as if an independent property inspection is completed then there is a much greater chance that any repair issues will be spotted. EQC is developing a campaign which will clarify the intended purpose, scope and limitations of an EQC assessment and emphasise that an EQC assessment is not comparable to a pre-purchase inspection (builders report). This campaign will highlight the need for independent pre-purchase inspections as part of performing due diligence when purchasing a home.
Life Membership Nominations
Nominations for Life Membership of the Real Estate Institute of New Zealand are now open and close on Wednesday 23 October at 5pm.
Reminder: From 29 October 2019, the Real Estate Agents Disciplinary Tribunal will be able to order up to $100,000 compensation for an agent’s unsatisfactory conduct
This is in addition to the $100,000 compensation that they can order for an agent's misconduct.
The remaining provisions of the Tribunals Powers and Procedures Legislation Act 2018 (TPPL) will come into effect on 29 October 2019.
This means that section 110 (Determination of charges and orders that may be made if charge proved) of the Real Estate Agents Act 2008 (Act) will be amended to reflect the below:
If the Real Estate Agents Disciplinary Tribunal finds that an agent has engaged in unsatisfactory conduct and it appears that they have caused a person to suffer a loss as a result of their unsatisfactory conduct then, the Tribunal can order the agent to pay up to $100,000 in compensation but only if:
- the agent’s unsatisfactory conduct is more than a minor or technical breach of the Act; and
- the order is in line with what a court of competent jurisdiction would make in relation to a similar claim.
REINZ advocated against the implementation of this provision as REINZ was of the view that adding to the Tribunal powers to award civil damages in relation to unsatisfactory conduct would erode the distinction between the two levels of conduct (misconduct and unsatisfactory conduct). REINZ also provided evidence that that the disciplinary regime was working well based on the Real Estate Authority’s own research completed in June 2016. However, it is clear that Parliament could see more benefit arising out of increasing the Tribunal’s powers as opposed to not doing so.
We remind agents of the importance of adhering to the Code of Conduct Rules considering the financial repercussions associated with a finding of unsatisfactory conduct.
Agents should also be checking their insurance policies to ensure that they have appropriate cover.
Case Update: Agent rightfully holds deposit for more than 10 days
The complaint in this case concerns the attempted sale of a property and involved two licensed salespersons and the Agency.
The complaint was made by the vendor and it was claimed that the two licensees did not properly draft the Agreement for Sale and Purchase (ASP) which allowed the purchaser to avoid the contract and the Agency retained the deposit in their trust account for longer than required. The vendor also claimed that the attitude towards the vendor by the licensees and Agency was unprofessional.
What did the Complaints Assessment Committee (CAC) decide?
Drafting of the Agreement:
The vendor claimed that Licensee 1 presented an offer to the vendor and after negotiation, the offer was accepted. The settlement date was recorded as being “28 April 2017 or 10 working days after the code compliance certificate issue whichever is later.”
The Code Compliance Certificate (CCC) was issued on 31 January 2018 however, this was rejected by the purchaser and the agreement was void. The transaction failed to settle and the deposit was returned to the purchaser.
Licensee 2 was in her first six months as a licensed salesperson and was therefore not permitted to prepare an Agreement therefore, no finding of unsatisfactory conduct in this respect was found.
Licensee 1 drafted the Agreement. The vendor and purchaser argued about what the particular work the CCC related to. Evidence suggested that at the timing of signing the Agreement, the vendor, purchaser and the licensees understood that the CCC only related to work for which building consent had been issued.
No breach was found in this regard by Licensee 1 either.
Deposit
The vendor claimed that the Agency retained the deposit in their trust account for longer than required.
Section 122(2) of the Real Estate Agents Act 2008 states that where Agents are in doubt on reasonable grounds as to who is lawfully entitled to the deposit then, they may retain the money in their trust account until that person is ascertained.
The Agency had reasonable doubts as to who was owed the deposit and if they had released the deposit by way of a guess then, this would have been a serious breach.
The CAC found no unsatisfactory conduct in this regard.
Unprofessional dealing
The vendor provided no evidence that the Agency and Licensees acted unprofessionally, and this claim was dismissed.
Finding:
No finding of unsatisfactory conduct was made.
Tips:
1. Best practice when drafting clauses for an Agreement for Sale and Purchase is to provide absolute clarity and when it relates to Code Compliance Certificates then, the clause should state which work it relates to.
2. If in doubt as to who is entitled to the deposit then, Agents may retain the deposit until they can ascertain who is rightfully entitled to the amount.
Person dies after workplace incident involving a quad bike in Maungati, Canterbury
A woman was killed using a quad bike on a rural property last month (25 September 2019). The workplace incident was referred to WorkSafe and the Coroner to investigate.
We remind agents to please exercise care and caution in relation to the use of quad bikes.
WorkSafe recommends that an alternative vehicle be used, or different work practices be employed to avoid the risk of quad bike rollovers. If there is no reasonable alternative to using a quad bike, WorkSafe strongly recommend that a Crush Protection Device (CPD) is installed permanently as this is likely to prevent serious and fatal injury.
WorkSafe also recommend purchasing a CPD that is professionally designed and manufactured.
To access WorkSafe’s Policy Clarification, click here.
REINZ also has a Healthy and Safety Guide for general informational purposes which is available under ‘Advisory Resources’ and covers Rural Hazards including, safety tips pertaining to the use of quad bikes.
Head to the REINZ Advisory Services page here.
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:
- Agency Agreements
- Anti-Money Laundering
- Advertising and Marketing
- Auctions
- Conjunctional Arrangements
- Disclosure
- Overseas Investment Act
- Privacy
- Tenders
Click here to access Advisory Resources
Feel free to direct any compliance related questions you have to advisory@reinz.co.nz
Verifiable Training
Christchurch Verifiable Training - LAST CHANCE
Wednesday 16 & Thursday 17 October
Registration deadline Thursday 10 October - a $50 per person late fee will apply after this date.
Auckland Verifiable Training - FINAL CHANCE
Wednesday 20 & Thursday 21 November
Registration deadline Friday 15 November - a $50 per person late fee will apply after this date.
Auckland C&I Workshop
Wednesday 25 October
Unit Titles Act, disclosure, commission disputes and more.
Check out the poster | Book here
Running successful auction campaigns
Wednesday 6 November
A high energy, interactive session for all sales people and auctioneers alike. Presented by Aaron Davis, 2019 REINZ National Auctioneering Champion, who has property pulsing through his veins!
Book here
Christchurch Fresh Starter Auctioneer Training
Monday 25 & Tuesday 26 November
Fun, interactive and engaging 2-day rookie auctioneer training facilitated by Mark Sumich. NV = 7 hours.
Book here
Verifiable Dates for 2019
| Region | Dates | Location | |
|---|---|---|---|
| October | |||
| Christchurch 2 | 16 - 17 | The Atrium | Book Now |
| November | |||
| Auckland 3 | 20 - 21 | Events on Khyber | Book Now |
2019 REINZ Auckland | Waikato | Bay of Plenty | Taupo Golf Tournament
Monday 18 November, St Andrews Golf Course, Hamilton
Entry includes green fees, prize table, first drink and after match platters.
Thank you to our sponsors Ingham Prestige Mercedes-Benz and Skills.
This event is open to REINZ Members, partners and clients registrations close on Friday 8th November (unless sold prior). Registration will be open on the day from 10:30am with the Matte Black Restaurant open for Morning Tea, Lunch and Coffee. Shotgun start at 12:00pm.
Book here
REINZ | Real Women in Real Estate Cocktail Evening
Wednesday 27 November, Events on Khyber, Grafton, Auckland
Connect, engage and be inspired by like-minded, successful women in real estate!
Join REINZ and RWIRE as we partner together to bring three special guest speakers, Leanne Pilkington from Laing+Simmons Sydney, Megan Jaffe from Ray White Remuera and Lynette McFadden from Harcourts Gold for a cocktail evening with prize draws and goodie bags.
Book here
2019 Auckland Bowls Tournament
Thursday 28 November, Balmoral Bowling Club, Auckland
Each team is to be made up of at least one registered bowler and three other players. Please register the whole team in a single entry.
The tournament is open to REINZ agency members, their salespeople and administration staff. Friends and Family are welcome. At least one player from each team must have a REINZ ID number.
Registration closes Monday 25 November, 5pm.
Book here
| November | |||
| 2019 REINZ Golf Tournament | 18 November | 12pm - 5pm | St Andrews Golf Course, Hamilton |
| REINZ | Real Women in Real Estate Cocktail Evening | 27 November | 5.30pm - 8pm | Events on Khyber, Grafton, Auckland |
| 2019 REINZ Bowls Tournament | 28 November | 9am - 3pm | Balmoral Bowling Club, Auckland |
Additional Livestock Categories available
Thanks to the feedback from rural agents, REINZ has released an update to the Statistics platform.
Livestock Category: Improve your Rural sales search with the Livestock category filters available in the Map Search and Classic Search.
Run a search using the Livestock Finishing or Livestock Grazing filters and export your result!
This week on the blog: Styling for sale
First impressions count! Here are some home staging hacks to help you prepare your vendors place for market.
Warnings from police after reports of gang members at empty rental
REINZ Chief Executive Bindi Norwell said criminals were known to target vacant rentals or properties for sale.
"When it does happen, it causes immense stress and cost for everyone involved," Norwell said.
'If you complain, you won't be able to rent a property again'
Following REINZ's A Call For Change campaign launch, tenant advocates in Otago are also calling for the rental industry to be regulated.
Community lawyer, Caryl O'Connor says: "There have been tenancy issues throughout Otago but the first pressure point was Queenstown. Some of the practices there were really beyond the pale - trying to squash as many people into a house as possible, a lot of it has now grown into sheer ignorance or absolute inability to bother with any of the rental laws."
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.
