In The Know
27 November 2019
Click the headings below to read more or visit the Property Management page
2019 REINZ Annual General Meeting
The 2019 REINZ Annual General Meeting was hosted at Events on Khyber yesterday, Tuesday 26 November.
Bryan Thomson was elected as a new Life Member and officially stepped down from the REINZ Board.
Read the official blog post here.
Jo-Anne Clifford officially started her role as Region One Appointed Director.
Read the official blog post here.
10th Edition Agreement for Sale and Purchase
To further assist the industry and provide members with more time to understand the changes to the Agreement for Sale and Purchase of Real Estate, we are deferring the release of the 10th Edition to Friday 6 December to allow members time to understand the changes.
From 6 December, agreements within eForms will be updated to the 10th Edition. From 6 December 2019, you should not be creating any new agreements using the old 9th Edition form.
A highlighted version of the 10th Edition showing the changes is now available to further help with understanding the changes.
We encourage all members to view the free webinars below that outline the key changes.
We will be unable to defer the release beyond 6 December so please ensure your teams are ready by this date.
Please Note: The auction and tender forms will also be updated. We will alert you to the release date for these forms as soon as it is confirmed by Auckland District Law Society (likely to be Feb/March 2020).
FREE WEBINAR: 10th Edition Agreement for Sale & Purchase: Key changes for real estate agents
FREE WEBINAR: 10th Edition Agreement for Sale & Purchase: GST changes
For more information, please contact Lisa Gerrard, REINZ Chief Legal Officer
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:
-
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
Agents beware: scams left, right and centre
Business Email Compromise (BEC)/Email Account Compromise (EAC) is scam that is targeting the real estate sector and causing significant losses as reported by the FBI Internet Crime Complaint Centre.
The information has indicated that the real estate sector is being heavily targeted and that victims such as real estate agents, law firms, vendors and purchasers are reporting the highest monetary loss to them.
Victims have reported a spoofed email being sent or received on behalf of one of these real estate transaction participants with instructions directing the recipient to change the payment type and/or payment location to a fraudulent account. The funds are usually directed to a fraudulent account which quickly disperse through cash or cheque withdrawals. The funds may also be transferred to a secondary fraudulent domestic or international account. Funds sent to domestic accounts are often depleted rapidly making recovery difficult.
What can you do to protect yourself?
- Verify all requests for a change in payment type and/or location
- Be wary of any communication that is exclusively email based and establish a secondary means of communication for verification. BEC/EAC actors will use publicly available information on real estate listings sites to target victims which will usually contain the agent’s contact details and information on the progress of the sale
- Establish code phrases that would only be known to the two legitimate parties. Victims have reported receiving phone calls from BEC/EAC actors requesting personal information for verification purposes.
Also, click here to read on 'New Zealanders at risk of being money mules for fraudsters'
Rural land directive and 'National interest test' to be included in Overseas Investment Rules
The Government has announced that assets such as ports, airports, telecommunications infrastructure, electricity and other critical infrastructure will be assessed through a national interest lens.
This means that the Government will be given broad discretion to reach into those transactions and decline to approve where it thinks that it may not be in the best interests of the country.
Enforcement powers will also be improved. The maximum fixed penalties for not complying will rise from $300,000 to $10 million for corporates.
Provisions of an existing Ministerial directive will be written into the Act, which requires overseas investments in farmland to show substantial benefit to New Zealand, by adding something substantially new or creating additional value to New Zealand’s economy.
A Bill implementing the changes will be introduced in early 2020.
Case Update: Agent never engaged in unsatisfactory conduct when appraising property (CAC ruling overturned)
An appeal against a Complaints Assessment Committee (CAC) ruling has been allowed by the Real Estate Agents Disciplinary Tribunal.
The complaint was that the Licensee misled the vendor in relation to the actual value of the property. The property was resold three months later for $150,000 more than the amount the Licensee had sold it for.
Appraisal
The Licensee provided a list of recent and current sales which he regarded as comparable properties in his appraisal. The recently sold properties had sold within the previous 12 months and were reasonably similar land and building sizes, and in the same general location. It also included some real estate statistics and a list of schools situated nearby the property.
The CAC had found that the Licensee had not provided sufficient analysis of the appraisal and had not explained the reasons as to why certain properties were included in it. The CAC also stated that the Licensee failed to explain why each property was inferior or superior to the vendor’s property.
The CAC found that the Licensee had breached Rule 5.1 and Rule 6.3 of the Professional Conduct and Client Care Rules 2012 (the Rules).
The Real Estate Authority (the Authority) disagreed with this and stated that the Rules, in particular, Rule 10.2 and Rule 10.3 did not extend so far to cover the alleged failure. It was noted that as long as a licensee provided sufficient detail on the comparable features of the properties such as land use, age, nature and condition of the property then, this could be deemed as supporting the appraised price.
The READT accepted this submission.
Appraised price
The CAC found that the Licensee’s selling range conclusions were not reasonable and that this was reinforced when the property was appraised by the on-selling agency at higher price range.
The second agency’s appraisal was conducted after the property had been renovated by the purchaser hence, a higher appraised price. The second agency’s appraisal followed the same format as the agent’s appraisal and also did not contain an analysis.
The READT accepted this.
Familiarity with property
The CAC found that when conducting the appraisal, the Licensee had not taken into account, that the property had compliance issues relating to unconsented/unpermitted work.
The Authority found that the CAC incorrectly extended the obligation on licensees to provide comprehensive appraisals with an obligation that the licensee requires sufficient knowledge of the property when marketing and selling the property.
It was found that there was insufficient evidence on which the CAC could have concluded that the risk of unconsented work ought reasonably to have been apparent to the agent or any reasonably competent licensee.
Tips:
- There is no requirement on a licensee to explain why each property is inferior or superior to their client’s property when preparing an appraisal.
- An appraisal is not intended to be a registered valuation.
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).’
Ever wondered how a bill becomes law?
Click here to see the flow chart.
Source: www.parliament.nz
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
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.
Important Notice: REINZ Security Update
To improve the security of the REINZ Statistics Portal, some old versions of Internet Explorer, Firefox and Chrome will no longer be supported after 16 December. This is part of a global migration to up to date and supported web browsers.
To ensure an uninterrupted service, we ask that you update your web browser to the latest version as these use more up to date protocols for encryption and authorisation.
As a quick guide, these are the minimum supported versions. Note that not all of these versions can use the full functionality of the Portal.
| Browser | Version |
|---|---|
| Internet Explorer | 8-10** |
| Internet Explorer | 11 |
| Edge | 12+ |
| Firefox | 27+ |
| Chrome | 30+ |
| Safari | 7+ |
**requires operating system configuration, and has limitations.
Please feel free to forward any queries or concerns to the REINZ Digital team at statistics@reinz.co.nz.
Updated Statistics Portal User Guide
The user guide for the Statistics Portal has now been updated and is available to download here.
If you would like any further assistance, please contact Gloria.
Receipt book orders - last week to order
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 not surprised Reserve Bank kept LVRs on hold
Bindi Norwell, REINZ Chief Executive says: “Today’s announcement from the Reserve Bank of New Zealand to keep LVRs at their current level was not surprising. All the data we’ve analysed over the past 12 months has shown that house prices have risen significantly across most parts of the country. In many towns and cities record median prices are being recorded, so to ease restrictions could create an uplift in the market that would be unsustainable in the long term."
Real estate professionals suffering lack of work-life balance
Real Estate Institute research shows problems with work/life balance were affecting 74% of people in the industry. Stress affected 69% of branch managers and 68% of those working in property management, too.
"It's inevitable that the real estate profession is prone to pressure by its very nature," said Bindi Norwell, REINZ Chief Executive.
On the blog: Authenticity matters
It is widely understood and accepted by most users today that an online persona very rarely, if ever, portrays the full truth of a person’s life or a company’s impact. Consequently, staged posts have far less impact. Today, consumers long for organic, real content.
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.
