In The Know
20 November 2019
Click the headings below to read more or visit the Property Management page
Key Update: Proposed changes to the Residential Tenancies Act 1986
The Government has announced a suite of proposed changes to the Residential Tenancies Act 1986 (RTA). PLEASE NOTE: The proposed changes are not law yet and are still subject to change.
The proposed changes will be drafted into a Bill to amend the RTA which will be introduced in the first half of 2020. REINZ will file a submission on the Bill, once it is released for public consultation. REINZ will request to appear before the Select Committee to ensure that the view of our members is heard.
The key proposed changes include:
- Limiting rent increases to once every 12 months instead of once every six months
- Banning rental bidding
- Ending no cause terminations to end a periodic tenancy agreement. Currently, periodic tenancy agreements can be terminated without cause as long as the landlord gives 90 days’ notice. The RTA will now have a list of reasons for termination which will include new provisions to respond to antisocial behaviour
- Landlords will need to give tenants 63 days’ notice if the property is to be vacated for family use, and 90 days if the property has been sold. This is an increase from the current 42 days’ notice
- Increase in financial penalties and providing the Tenancy Compliance and Investigation team with new tools to take direct action against parties who are not meeting their obligations
- Require fixed term tenancy agreements to become periodic tenancy agreements upon expiry unless: both parties agree otherwise, the tenant is not meeting their obligation or specified grounds for the tenancy to end apply
- Anonymising complaints to the Tenancy Tribunal where a party has been wholly or substantially successful when taking a case to the Tenancy Tribunal
- Allowing tenants to add minor fittings such as brackets to secure furniture and appliances against earthquake risk, baby proof the property, install visual fire alarms and doorbells, and hang pictures.
Remember the proposed changes are not yet final and we will be given the opportunity to comment on them again with the guidance of industry feedback, once the Bill is released for consultation.
10th Edition Agreement for Sale and Purchase
A new edition of the REINZ/ADLS Agreement for Sale and Purchase will be released on 27 November 2019 via eForms. A highlighted version showing the changes made will also be available on the REINZ website on 27 November.
Two free webinars explaining the changes are available via the REINZ Education Portal and we strongly urge agencies to ensure that licensees have viewed these webinars before the new form is released.
From 27 November, all eForms within the REINZ eForms platform will automatically update to the 10th Edition.
Please see the Advisory section of this newsletter for more information about the 10th Edition.
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 27 November 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.
REINZ is releasing two free webinars on Monday, 18 November 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:
-
10th Edition: Key Changes for Real Estate Agents (45 mins)
Lisa Gerrard, REINZ -
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
Case Update: Agents may be liable in negligence for stating "plus GST, if any" on Sale and Purchase Agreements
This case involves a Complaints Assessment Committee (CAC) decision and a High Court finding.
CAC Decision
- In early 2017, the Agency was engaged by the vendor of five properties to market them for sale. The Licensee was assigned to the marketing campaign
- The properties were being used for commercial purposes but could be used for commercial or residential purposes
- The vendor was GST registered
- In February 2017, the purchaser contacted the Licensee expressing interest in purchasing one of the properties
- The Licensee informed her over the phone that the price would be “plus GST, if any”
- The Sale and Purchase Agreement (Agreement) was prepared by the Licensee and stated that the purchase price was “plus GST, if any”
- The offer was rejected in favour of all five properties being purchased however, that offer did not proceed. The purchaser then made offers for two properties
- The purchaser indicated an intent to use both properties for residential and commercial purposes
- The purchaser did not obtain legal advice before signing the agreements and did not register for GST
- The purchaser claimed that the Licensee did not recommend her to take legal advice. The Licensee responded and stated that the Sale and Purchase Guide informed her to take legal advice
- The Agreement had “inclusive of GST’ crossed out and “No” for GST registration status for the vendor as being crossed out
- The CAC stated that due to the complexity and risk associated with the GST status of the transaction and the liability for a purchaser to pay GST in addition to the purchase price, the Licensee was required to specifically advise the purchaser to seek legal advice about the transaction prior to her making her offers, which did not take place
- The CAC found that the Licensee only told the purchaser that the price was plus GST “if any” and that the qualification “if any” rendered his advice meaningless
- The purchaser was obliged to pay the vendor for GST on the purchase price which was an additional $394,500.
A finding of unsatisfactory conduct was made.
High Court Finding
- The purchasers also filed a claim against the Agency in the High Court to recover the GST
- The purchaser claimed that the Licensee was aware that GST was payable and therefore, he was negligent in failing to delete the “if any” proviso when preparing the Agreement. Further they claimed that the agent did not complete Schedule 2 and did not ensure that the purchaser initialed cross outs in the Agreement
- The Agency applied to strike out the claim on the basis that the purchaser did not have a reasonably arguable cause of action (arguable case on the facts)
- The Court assessed the facts and found that a claim in negligence was reasonably arguable.
What does this mean?
It should be noted that the purchaser has only established a reasonably arguable cause of action in negligence and that there are legal and factual issues that may ultimately defeat the claim if it goes to trial.
REINZ will follow the development of this case, whether it be an appeal to strike out the decision or a full hearing of the claim.
Tips:
- We recommend that agents advise all prospective purchasers clearly and in writing to obtain specialist advice on the tax implications of any purchase, and state in writing that they do not make any representations as to liability for GST
- Sale and Purchase Agreements must be prepared with care (with reference to legal advice as necessary)
- Any additions or deletions should be countersigned by prospective purchasers.
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).’
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
Christchurch Fresh Starter Auctioneer Training - LAST CHANCE
Monday 25 & Tuesday 26 November
Fun, interactive and engaging 2-day rookie auctioneer training facilitated by Mark Sumich. NV = 7 hours.
Book here
Health & Wellbeing Survey
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.
New 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
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.
Contact membership@reinz.org.nz to register.
REINZ | Real Women in Real Estate Cocktail Evening - LAST CHANCE!
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 - LAST CHANCE!
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 AGM | 26 November | 10am - 11.30am | Events on Khyber, REINZ, Auckland |
| 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 |
| 2019 Hawke's Bay Mini Conference | 28 November | 10am - 7pm | Brookfields Winery, Napier, Hawke's Bay |
REINZ is pleased to launch its newest Member Benefits Supplier: Millennium Hotels & Resorts
As a REINZ member you will receive exclusive corporate rates at selected Millennium, Copthorne and MSocial hotels and resorts throughout New Zealand.
Bookings can be made at the hotel, by emailing central.res@millenniumhotels.co.nz or by calling 0800 808 288.
Don’t forget to mention that you’re a REINZ member!
Sale Labels in Map View
You can assign a variety of different labels to the sale points in the Map View. Click on the ‘Label’ drop down menu underneath the legend, then select the type of label you wish to view. Options being:
- Sale price
- Owners
- Time since last sold
- Land area
- Selling Agency
- Bedrooms
- Sale Method
Email Gloria to find out more.
Receipt book orders
The cut-off date for Receipt Book orders is fast approaching. We recommend that you have your orders into us by the close of business on Wednesday 4 December for guaranteed delivery prior to Christmas.
You can start placing orders again from Monday 13 January 2020.
Order forms are available here.
REINZ AGM - Notice of Meeting - Last chance to register
Notice is hereby given that the Annual General Meeting of members will be held on Tuesday 26 November 2019.
Registrations will commence on the day from 9.30am. The Meeting will begin at 10.00am and close at 11.30am.
The meeting will be held at Events on Khyber, Level 2, 155 Khyber Pass Road, Grafton, Auckland.
Pre-registrations would be appreciated by Monday 18 November, for the purposes of voting and catering and can be sent to agm@reinz.co.nz
If you have any items of General Business or any enquiries, concerns or apologies to be noted, these can be submitted to agm@reinz.co.nz by Thursday 2 November 2019.
Notice of Meeting | Register attendance or apologies
The 2019 Annual Report is now available online.
Now and then: Landlord/tenant law overhaul, how 1.5m lives could change
Bindi Norwell, REINZ Chief Executive has welcomed many of the changes, supporting tenants' right to alter their places and for rent bidding to be outlawed. But she does not support an end to no-cause terminations.
On the blog: What is a social mortgage?
With the release of New Zealand’s first Wellbeing budget in late May 2019, it’s more obvious than ever that the built environment needs to move towards planning models that deliver social and environmental sustainability. This latest blog piece is from Otago University PhD student, James Berghan, and discusses the ideas around a "social mortgage".
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.
