Other laws and legislation
As a licensee, you should have a sound knowledge of the Real Estate Agents Act 2008 as well as other legislation that is relevant to real estate agency work.
This page contains brief overviews of key pieces of legislation that impose obligations on you as a licensee or are more broadly relevant to real estate agency work.
This is not a full list of such laws, and the laws that are covered are not comprehensively explained in terms of the obligations they impose on licensees or otherwise impact on real estate agency work.
Anti-Money Laundering (AML) and Countering Financing of Terrorism Act 2009
Specific information for licensees can be found here.
The AML/CFT Act introduces customer due diligence requirements on agents and requires agencies to complete risk profiles and have an established AML/CFT compliance programme in place.
Guidelines and resources for licensees can be found on the Department of Internal Affairs website here.
Building Act 2004
This Act sets clear building expectations around health and safety standards, fire escape routes and building sustainability. It also sets out expectations around the accountability of owners, designers and building consent authorities.
Residential and commercial buildings may be affected by certain provisions under the Building Act. The Act requires the owner of a building with specified systems (such as sprinklers, lifts and fire alarms) to have a compliance schedule. The owner must provide the local council with an annual building warrant of fitness to confirm that the building’s specified systems are being maintained and are operating effectively. Licensees should be aware of this when undertaking agency work in respect of such a property.
For information about compliance schedules and other current building legislation matters, visit the Ministry of Business, Innovation & Employment Building Performance website, here.
Read the Building Act 2004 here.
Commerce Act 1986
A recent example of this Act being used in the real estate industry was the proceedings taken by the Commerce Commission against a number of licensees in relation to anti-competitive behaviour when Trade Me increased its advertising prices.
You can find information about price fixing and cartels here.
Fair Trading Act 1986
A key aspect of the Fair Trading Act relevant to licensees’ work is the prohibition against false or misleading representations about the sale or possible sale of land (section 14). This includes representations made in advertising when marketing a property. A similar prohibition can be found in rule 6.4 of the Code of Conduct.
The Commerce Commission has useful factsheets about advertising — for example, see here.
The Fair Trading Act also sets out the terms on which auctions must be run (sections 36X – 36ZF). See the Commerce Commission’s fact sheet on auctions here.
Read more about unsubstantiated representations here.
Health and Safety at Work Act 2015
It’s important that agency owners and licensees employed or contracted to an agency understand their rights and obligations under the Health and Safety at Work Act. In particular, licensees should be aware of the health and safety implications when visiting properties and when travelling to and from them.
WorkSafe New Zealand has a lot of valuable resources and guides about the Health and Safety at Work Act.
Local council bylaws
Any local laws passed by the council are designed to ensure that the actions of an individual or group do not have an adverse impact on the rest of the community. The bylaws apply only within the municipality in which they are passed, though many councils share similar laws.
It is important to be aware of local bylaws because they can impact the way you carry out real estate agency work. For example, bylaws can restrict where you can place signage.
Councils must make all copies of local laws available for public inspection and purchase. You can contact your local council for details of the bylaws in your area.
Overseas Investment Amendment Act (OIA) 2018
The Investment Amendment Act 2018 came into force on 22 October 2018. The Act restricts overseas persons purchasing residential land. Residential land has now been classified as “sensitive land”. People overseas will generally be unable to buy existing homes in New Zealand and consent from the Overseas Investment Office is required. A person is not required to obtain consent if they are a New Zealand citizen or “ordinarily resident” in New Zealand.
Under the Act, someone who holds a residence class visa granted under the Immigration Act 2009, has been living in New Zealand for the last 12 months (including being present in New Zealand for at least 183 days in those 12 months) and is a tax resident in New Zealand will generally be able to purchase a home.
You can read more here.
The LINZ website includes consent information for investors who want to develop residential land, invest in forestry, invest in significant business assets, or in land that is sensitive for reasons other than being residential.
Privacy Act 1993
Licensees collect information about private individuals every day on listing agreements, open home registers, auction registers or, sale and purchase agreements via online or email correspondence with consumers.
The Privacy Act governs how people’s personal information is collected, stored, used and disclosed.
It sets out rules around individuals’ rights to access information about themselves and to have that information corrected. It also provides a mechanism for people to make a complaint about matters to do with their personal information. The Office of the Privacy Commissioner has a helpful website that explains your obligations under the Privacy Act.
The Public Works Act 1981
The Real Estate Authority does not consider that work undertaken by LINZ Crown Property accredited suppliers is ‘real estate agency work’ under the Real Estate Agents Act 2008 (REAA). Note, this may differ from what LINZ requires from an accredited supplier. See the LINZ website for more information.
The Public Works Act 1981 (PWA) gives authority to the Crown to acquire land it needs for public works such as schools or roads.
Although part of the process involves negotiation with the land owner, this is a ‘good faith’ process. If the Crown needs land for a public work, and a land owner does not agree to the acquisition, the Crown retains the power under the PWA to acquire the land compulsorily. REA does not consider this to be a ‘sale and purchase’ transaction because we do not consider this to be a transaction ‘in trade’.
Accredited suppliers negotiate for the land on behalf of the Crown. The LINZ website defines ‘accredited supplier’ as: A company that, or individual who, has been accredited to carry out specific Crown property work that supports LINZ’s discharge of a Statutory Function. LINZ has set PWA standards that accredited suppliers must adhere to, and compliance is audited by LINZ.
Although some of the work undertaken by accredited suppliers under the PWA may be similar to work done for a private sale, we consider this is different because accredited suppliers are likely to be limited in how far they can go under the PWA provisions. Also, if an agreement cannot be reached with the Crown, land owners may have their land taken, unless they successfully appeal an acquisition in the Environment Court.
The purpose of the Real Estate Agents Act 2008 and licensing of real estate agents is focused on consumer protection. If accredited suppliers were also licenced real estate agents, it might result in duplicate regulation. Accredited suppliers are acting on behalf of the Crown and are limited to the provisions of the PWA, in that they will be directed to negotiate land which is needed by the Government, acting through LINZ. See the LINZ website for further information on the PWA process.
Note that when land acquired for public works is no longer needed for that purpose, there are options for disposal of the land, one being an open market sale. Disposal through open market sale would need to be completed by a licensed salesperson.
Residential Tenancies Act 1986
It’s important that licensees and agencies understand the respective rights and responsibilities of landlords and tenants. Licensees need to pay special attention when listing a residential property that is occupied by tenants because there may be issues with access rights for viewing and notice periods for ending a tenancy agreement.
(There are also rights and responsibilities to be aware of when selling commercial property, but these come under other laws, not the Residential Tenancies Act).
Read the Residential Tenancies Act here.
Unit Titles Act 2010
All licensees working in residential sales should be aware of the requirements of the Unit Titles Act, particularly as they relate to disclosure.
Read the Unit Titles Act 2010 here.
Read more about unit titles on the Tenancy Services website.