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RES420 (Module 3: Land ownership, transfer of ownership and titles …

- - - - Consumer law is a branch of law that has developed to promote fairness in commercial transactions.
- - - - You’re not a lawyer, but you’ll be working with contracts and other legal documents when you sell a property. If you don’t know what you’re doing, or if you make a mistake, the consequences could be serious. You could, for example, face fines, complaints, and potential cancellation of your licence. On the other hand, if you work within the law, you and your clients and customers will be protected. We all have to meet very high standards, which are based on three areas of the law.
        
        When things go wrong
        
        To illustrate the importance of understanding, and complying with, the relevant laws that affect people working in real estate, let’s look at some real-life cases. You’ll find it helpful to have a copy of the Code handy: we recommend you read through the rules of the Code mentioned in each case.
        
        A salesperson started marketing a property for sale without getting an agency agreement signed by the client (vendor) first. She was held to have breached rules 5.1, 5.2 and 9.6 of the Code. She also breached section 126 of the Real Estate Agents Act 2008. This meant that if the property sold neither she nor her agency would have been entitled to any commission on the sale. Her only punishment in this case was a reprimand from the Real Estate Authority Complaints Assessment Committee.
        
        A salesperson incorrectly advertised a property as being on a cross lease title, when in fact it was a fee simple (freehold) title. When she prepared to market the property, she didn’t get a certificate of title or any other evidence to confirm the property was a cross lease. As a result, she was found guilty of a breach of rule 5.1 of the Code and fined $1,000.
        
        A salesperson advertised a property as fully fenced. However, the fencing didn’t accurately reflect the boundary of the property, because it was partly built on Department of Conservation land. This breached rules 6.4 and 10.7 of the Code. He was fined $5,000 and ordered to pay costs to the complainant totalling more than $3,000.
        
        Two salespeople were found guilty of unsatisfactory conduct because they failed to disclose to a purchaser that the property was at risk of flooding. They had also told the purchaser that the property could be used as a home and income, which it couldn’t. Further, they also told the purchaser that he was in a multi-offer situation when he was the only one making an offer. One salesperson was fined $7,000 and the other fined $5,000. In this case the salespersons breached rules 5.1, 6.2, 6.3, 6.4 and 10.7.
  - - - This means that all staff must be supervised and managed throughout their career. It’s normal for a branch manager to conduct regular individual meetings with sales staff, to discuss each person’s progress and provide guidance where required.
        Most agencies have an induction process that helps introduce staff to their role. Your manager should also take an active interest in your work. This involves checking to ensure that you’re following correct procedures, and not doing anything that could potentially put you or your agency at risk of a complaint. You should always feel free to ask questions and get guidance from your manager when you're unsure.
        A manager must also ensure new salespeople don’t carry out certain real estate work in their first 6 months.
        
        What work can’t salespersons do in their first 6 months?
        This limitation applies to drafting, negotiating, or advising about real estate sale and purchase agreements. This work must be carried out by a person with more experience.
        This is specified in the reference to the Lawyers and Conveyancers Act 2006 in Schedule 2 of the Real Estate Agents Act 2008.
    - - The REA’s Professional Standard on Supervision sets out the framework for supervision, and provides guidance on each of the following areas:
        1.an overview of supervision from a real estate agency perspective
        2.supervision of the drafting of sale and purchase agreements
        3.obligations for supervision when the salesperson works at a different location than their supervisor
        4.record keeping.
        
        Maggie has been practising real estate for 8 months. What can Maggie expect from her branch manager, John?
        As a newly qualified salesperson, Maggie has a right to expect a high level of guidance and leadership. John should supervise her quite closely. Read, for example, section 50 of the Act:
        Also, rule 8.3 of the Code requires all Waterford Real Estate salespeople, regardless of their experience or length of service, to be fully supervised and managed by either Brenda (the agent) or John (their branch manager). They may have a front-line manager or team leader, but John and Brenda are responsible for supervision – for checking salespeople are working competently, ethically and within the law. You can also refer to the REA’s Professional Standard on Supervision (2017).
        
        Imagine you are in your fourth month working for in a real estate office. Your branch manager needs to go on leave for a couple of weeks. The agent is also away on extended sick leave. The branch manager asked a salesperson to supervise you while he’s away from the office. He says that the salesperson should check any sales and purchase agreements you arrange. Is this acceptable? If yes, why? If not, why not, and what could the consequences be?
        This is not acceptable. Paragraph 2.1 of the Professional Standard on Supervision says that salespeople must be properly supervised and managed by a licensed agent or licensed branch manager. David is currently a salesperson, so he can’t take on the responsibility of supervising you.
        Paragraph 5.5 of the Professional Standard on Supervision refers to the Lawyers and Conveyancers Act 2006. It says that salespeople with less than 6 months’ experience are not allowed to prepare sale and purchase agreements or advise clients or customers about these agreements.
        f you followed your branch manager’s instructions in either of these situations, you could find herself facing a charge of unsatisfactory conduct from the REA Complaints Assessment Committee.
        The Professional Standard on Supervision sets out the framework for supervision, and provides guidance on each of the following areas:
    - - You need to keep learning throughout your career. The REA requires salespeople to take 10 hours each of verifiable and non-verifiable continuing education.
        The REA sets the curriculum for verifiable continuing education.
        Non-verifiable CE is more flexible than compulsory verifiable continuing education. You may be able to complete this by attending REA-approved seminars.
        You need to submit proof of completion of your continuing education when you renew your licence each year.
        Note that If you complete one of the academic qualifications in the list below, you don’t have to do continuing education for that calendar year or the following calendar year.
        
        Specified academic qualifications:
        
        New Zealand Certificate (Salesperson)
        
        New Zealand Certificate (Branch Manager)
        
        New Zealand Diploma in Business (Real Estate).
        
        This means that if you are awarded the National Certificate (Salesperson) in 2019, you’ll be exempt for 2019 and 2020. However, some agencies expect all their licensees to complete continuing education each year, even if they receive a qualification.
  - - - An agent must clearly identify their name and the fact that they are licensed under the Act (section 121).
        If there’s a separate trading name, this must be clearly identiﬁed too. This information must appear prominently in the office and all communication (particularly advertising) from the real estate ofﬁce.
        Agencies that are part of a franchise or cooperative group use the brand name for marketing purposes, but must also display their company name. You’ll see this information on signs, websites, printed materials, business documents and advertising.
        Also, the Code must be clearly displayed, and agencies should have a link to the Code on their website. (There is a similar obligation for any licensee, such as a salesperson, who has a personal, work-related website) (rule 8.1.)
        
        The Code
        All licensees must make the Code available to anyone who requests it. It is best practice to supply a copy of the Code to new clients when they sign an agency agreement. For example, Waterford Real Estate salespeople give a copy to new customers and encourage them to read it. Note that this is helpful, but you’re not legally required to give either party a copy of the Code unless they ask for it (rule 8.2).
  - - - Skill comes from training and practice in the real world. The Code requires that every licensee has a level of skill consistent with their qualification. A salesperson must be skilled in the material taught in this programme. A branch manager or agent must have a higher level of skill, consistent with the requirements of their licence.
        
        If you don’t have the skill and experience to create and maintain a computerised database, ask for advice and guidance from someone more senior, such as your supervisor or branch manager. Be careful not to overestimate your skill level. It’s better to be cautious until you’ve had plenty of practical experience.
      - Care is about thinking before acting, and exercising caution and responsibility so that you avoid unnecessary mistakes.
        
        Part of the appraisal process is to record the details of what you inspect carefully. Can you do this by taking thorough notes? With the owner’s (or tenant’s) approval, you may also want to take photographs.
      - Competence is about the range of skills you have and how you apply those skills. It comes from learning how to identify the subtle differences between seemingly similar situations and applying the necessary skills in each case.
        
        You should refer the prospective client to a person who is more of an authority and explain to the client that it’s beyond your area of expertise.
      - Diligence is about striving to improve your performance and advancing your knowledge and understanding. It means you work hard with care.
        
        Ask staff at the local territorial authority whether the owner’s opinion is accurate. The word ’diligence’ means being careful, but we could also use ‘conscientious’ or ‘thorough’. How will you deal with unusual situations or those where you’re left with unanswered questions?