The Real Estate Agents Authority is a New Zealand Crown agency that is responsible for the regulation of the New Zealand real estate industry as well as the agents within it. The agency is responsible for many things, but is most known for its responsibilities regarding regulation and licensing within the real estate industry. The agency was established in 2008 under the Real Estate Agents Act, 2008; it became functional on 17 November 2009. The Crown entity falls under the jurisdiction of the Ministry of Justice.
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History
The Real Estate Agents Authority was established in 2009, after the enactment of the Real Estate Agents Act in 2008. The Real Estate Agents Authority took control of, and maintained, the roles of the now-defunct Real Estate Agents Licensing Board
In 2011, the Authority increased the operating levy from $494 per annum to $690 per annum, excluding GST.
In the period of 2011-2012, the Authority introduced a 'Education Annual Programme' whereby all licensee's are required to complete 20 hours of education, of which 10 hours are prescribed by directly by the Authority. In 2012, 11 licensees had their licenses cancelled on the basis of non-completion of the 20 hours of education.
During 2012-2013, the Authority found 124 complaints were consistent with unsatisfactory conduct, down from 152 in the 2011-2012 financial period, and a further 16 determinations of serious misconduct, up from 14 in the previous financial period.
In the aftermath of the Kaikoura earthquake, the REAA temporarily moved its headquarters from Level 2, 10 Brandon Street, Wellington to Level 3, 3 The Terrace, Wellington. According to the 2016-2017 Annual Report, the reasoning for the headquarters relocation was due to Deloitte House, its former headquarters, being deemed unsafe. In the days following the decision, the Authority instructed its workers to work from home until a suitable building is found for the interim headquarters. An interim headquarters was located on 5 December 2017, the current headquarters at 3 The Terrace, Wellington.
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Divisions
According to the 2009-2010 Annual Report, the Authority was separated into 3 distinct business areas; however, the 2010-2011 report disclosed a fourth division of the Authority, The Policy and Legal Team.
The Compliance Unit
The Compliance Unit is the division of the Authority that is responsible or the complaints process. The Unit is the ultimate recipient of complaints laid, and is responsible for investigating complaints, allegations, and offences committed under the Act. The Unit also provides administrative support for the Complaints Assessments Committee.
The Licensing Team
The Licensing Team is responsible for the administration of the licensing functions of the Authority. The Team is also responsible for maintaining the register of licensees as well as Maintaining the Applications, Suspensions, Renewals, and Surrendering of licenses.
The Operations Team
The Operations Team is the division responsible for corporate support, communications, information technology, human resource management, government relations, external and internal compliance, office support, and contract management. One of the main functions of the Team is its responsibility of maintaining the Authorities finances.
The Policy and Legal Team
The Policy and Legal Team is responsible for providing legal and operational policy advice to the Authority, for its functions in relation to the development of education framework.
Partners
According to the 2011-2012 Annual Report, the Authority, as a constituent department of the Ministry of Justice, undertakes its duties alongside, and with the help of, a multitude of Government Agencies. As a part of the Authority's monitoring and enforcing roles, they deal directly with the New Zealand Police, the Commerce Commission, the Serious Fraud Office, the Department of Internal Affairs, the Financial Markets Authority, and the Ministry of Business, Innovation and Employment (MBIE).
According to the 2012-2013 Annual report, other relationships include,
- In relation to guidance and policy, the Authority relies on information and the advice from, Real Estate Advisory Groups, the New Zealand Law Society, the Home Owners and Buyers Association of New Zealand, Consumer NZ, the New Zealand Citizens Advice Bureau, and Community Law New Zealand.
- In relation to helping with the licensing process, the Authority relies on the Police and MBIE to ensure only "fit and proper" people are licensed.
- In relation to ensuring licensees are compliant with New Zealand regulation and legislation of the real estate industry, the Authority maintains relationships with, the Real Estate Institute of New Zealand, the Royal Institution of Chartered Surveyors, and Industry representatives.
- In relation to the detection and monitoring of licencees, the Authority maintains relationships with the MBIE, the Commerce Commission, the Financial Markets Authority, and Inland Revenue.
- In relation to taking action against those who do not comply with the Authorities rules and regulations, the Authority maintains relationships with, Complaints Assessment Committees, the Real Estate Agents Disciplinary Tribunal, the District and High Courts, and the Ministry of Justice.
Roles and Powers
Primary Role
The Agency is responsible for 15 primary objectives.
The responsibilities, according to the Real Estate Agents Act of 2008, of the Real Estate Agents Authority are to,
- Administer the licensing regime for agents, branch managers, and salespeople, including the granting and renewal of licence applications.
- Appoint a Registrar to the Register of Licencees.
- Ensure the register of licencees to be established, kept, and maintained.
- Develop practice rules for the Ministers approval, and maintain these rules for licensees, including ethical responsibilities.
- Set fees and levies.
- Appoint Complaints Assessment Committees and maintain a panel of persons suitable to serve as members of Complaints Assessment Committees.
- Develop consumer information on matters relating to the provision of real estate services, including providing the public with information on how to make a complaint
- Develop and provide consumer information on matters relating to the provision of real estate services, including providing the public with information on how to make a complaint.
- Set professional standards for agents.
- Investigate and initiate proceedings in relation to offences under the Act, and any other enactment.
- Investigate of its own motion any act, omission, allegation, practice, or other matter which indicates or appears to indicate unsatisfactory conduct or misconduct on the part of a licensee.
- Provide procedures for the lodging of complaints.
- Receive complaints relating to the conduct of licensees.
- Carry out any other function that the Minister may direct the Authority to perform with Section 112 of the Crown Entities Act, 2004.
- Carry out any other functions that may be conferred on the Authority by this act or any other enactment.
Additional Role(s)
- The Agency maintains the right to consult with representatives of the Real Estate Industry of New Zealand about any matter with a relation to the Authority and its functions.
- The Agency is tasked with promoting and protecting the interests of consumers within the Real Estate industry.
- The Agency is tasked with promoting public confidence in real estate agency work.
- The Agency is tasked with maintaining a publicly-accessible registered agents register.
- The Agency is tasked with presenting their Annual Report to the House of Representatives, pursuant to the provisions of the Crown Entities Act of 2004.
Additional Legislation
Real Estate Agents (Audit) Regulations Act (2009)
This piece of legislation provides regulations for the appointment and duties of an auditor. The legislation also provides framework for the auditing of all trust accounts that are agent-operated. The legislation furthers the regulations by prescribing how, when, what, and the powers of, an auditor and their audits are presented.
Some regulations have been Amended by the Real Estate Agents (Audit) Amendment Regulations Act, 2014.
Real Estate Agents (Complaints and Discipline) Act (2009)
This piece of legislation provides a framework for the application, and its processes, of complaints, as well as the framework for resolving said issues. The legislation sets regulations for the charging, suspension, and reviews of real estate agents in New Zealand.
Real Estate Agents (Duties of Licensees) Act (2009)
This piece of legislation provides a legal template for how an Agent must state their rebates, discounts, and/or commissions earned, or not, directly under their capacity as a licensed Real Estate Agent.
Real Estate Agents (Licensing) Act (2009)
The legislation outlines how forms are to be formatted, as well as what forms there are, and their purpose.
Complaints Assessment Committee
A Complaints Assessment Committee is a three-member executive committee appointed to act independent of the Authority and tasked with making impartial decisions based on complaints, referred to them by the Authority, in regards to the behavior of licensees. The Committee must include a lawyer, a representative from the Real Estate Industry, and a consumer advocate.
According to the 2010-2011 Annual Report, "The Authority must refer every complaint to a CAC and when directed by a CAC it must carry out further investigations. This includes all costs associated with investigations and any procedural costs.". The cost of managing the work of the CAC's, in the 2010-2011 period, amaunted to $2,612,000.
The findings that can be reached, in regards to complaints, by the Complaints Assessment Committees are,
- A finding of no further actions needed
- Investigate the complaint further
- Consider using alternative dispute resolution processes
- A finding of unsatisfactory conduct
- Referral of the matter to another agency
If the Committee deems the behavior of a licensee to be of unsatisfactory conduct, the Committee can impose sanctions against the licensee, and a public notice will be issued notifying the public of the unsatisfactory conduct committed.
The sanctions that can be imposed against a licensee are,
- Requiring the agent to apologise
- Ordering agent to pay costs
- Requiring the agent to undergo further training and/or education
- Ordering agent to reduce, cancel, or refund fees, or fix an error or omission
- Fining the agent up to $10,000 (individual) or $20,000 (company)
- Censuring or reprimanding the agent
Finances
The Agency receives no funding from the New Zealand Government and relies on fees and levies collected from licensed real estate agents. The financial situation of the Agency has been described as stable in relation to the stability of the number of licensees.
The initial funding of the Authority consisted of capital funding and an interest free loan, to the values of $2,078,000 and $6,307,000 respectively, with a total value of $8,385,000. The loan, from the Crown, must be paid in full by 30 April 2016. In the period 2009-2010, the Authority made a $4,683,000 deficit; however, maintained $7,105,000 in cash on hand.
The net surplus of the Authority, for the financial period of 2010-2011, was $237,000; however, maintained $2,876,000 in cash and cash equivalents. The Authority's investments totaled $4,700,000 in term deposits.
The total revenue of the Authority, for the 2011-2012 financial period, was approximately $10,014,000; however, total comprehensive revenue was $1,015,000. Cash and Cash equivalents stood at $5,590,000.
The total revenue, for the 2012-2013 financial period, was $10,418,000; however, total comprehensive income totaled 15.75% of total revenue, at $1,418,000. Cash and cash equivalents stood at $6,376,000.
According to the Annual Report, of the 2013-2014 financial period, the Total Revenue of the Authority was $10,754,000, and the Comprehensive Income was $1,616,000. The asset base of the Authority stood at $10,443,000, with Cash and Cash equivalents at $2,111,000 and other investments accounting for $8,107,000.
In the financial period for 2016-2017, the Total Revenue of the Authority was $11,888,000 and the Comprehensive Revenue amounted to $1,439,000. In the same period, Cash and Cash equivalents amounted to $1,578,000, whilst Total Assets were valued at $10,232,000.
Operating Statistics
Legend for table,
- Renewal applications are applications made throughout the given financial period where an existing licensee has applied for a renewal of their license.
- New applications are license applications from an entity/person who does not already have a license.
- Voluntary Suspensions are licensees of whom have voluntarily suspended their licenses, ultimately ending their license.
- Complaints received are the number of complaints received within the given period.
Management
Ministers Responsible
Chief Executives
Board of Directors
All members of the Board of Directors are directly appointed by the Minister of Justice. The Board is responsible for the overall governance of the organisation. The composition of the Board consists of experts in the legal, real estate, risk management, finance, and consumer rights sectors.
The Board can have up to seven members, of which two must be either licencees or former licencees.
The current Board of Directors, according to the REAA website, is:
- John Auld - Chairperson
- Denese Bates, QC
- Aaron Bhatnagar
- Marion Cowden
- Elizabeth Nidd
- Anthony Stack
Notable cases
- On 3 March 2010, the Authority, acting on the advice of an appointed CAC, censured North Shore-based Real Estate Agent Tip Spooner, then working for Milford's Prestige Real Estate International, for sending an elderly woman a business card and a valuation on her property not long after her husbands death. This act was deemed as a breach of the Authority's Code of Professional Conduct and Client Care. This case was also the first censuring undertaken by the Authority.
- On 27 April 2010, the Authority, acting on the advice of an appointed CAC, found Auckland-based Real Estate Agent Lawrence Lalit Naidu, then working for Sega Realty, guilty of unsatisfactory conduct after charging a client over $5,000 more than what was previously agreed to. Due to the offence occurring prior to the enactment of the Real Estate Agents Act in 2008, the offence was punishable under the previous real estate governing act, the Real Estates Agents Act, 1976.
- On 20 August 2010, the Authority ruled that North Shore-based Real Estate Agent Darryn Laskey, who was New Zealand's 4th best salesman at the time, was guilty of "unsatisfactory conduct in his response to emails he felt attacked him". The CAC appointed to determine the case found that some comments made by the agent amounted to personal abuse, and that verdict led to the guilty ruling.
References
Source of article : Wikipedia
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