Tony Brazier

www.braziers.co.nz

Tony Brazier

The Press - Wednesday 21 October 2009

Agents in a Flurry

Scanning the papers in more recent times one could be excused for thinking that a huge sigh of relief is happening within the real estate industry. After all, interest rates are down, prices have firmed, if not risen, and the future looks much rosier as immigration and a lack of listings put pressure on the markets to move forward.

However, scratch the surface of most agencies and one will find much head scratching and grinding of teeth as the Principals and Managers get their heads around the new Real Estate Agents Act due to be implemented on 18th November next month. Although the agencies have had over a year’s notice of some changes the finished product and its obligatory road show of explanation has only really come to fruition in recent weeks. Anyone familiar with the time frames required to rewrite legal documents and have time to proof read before printing, knows that a month can go by very quickly.

A fly on the wall of a Real Estate Principal’s office will find them filling out a whole new licence application in their own name to compliment the one they already have for their company (S44). This is an addition to the old Act whereby the hoops jumped through to get the company licence sufficed. A glance at the Public Notices will be evidence of this.

All company’s Listing Authorities will need to be revisited. Under S128 of the new Act an agency must disclose all rebates, discounts and other commissions they may receive in the act of marketing the vendor’s property. For example, as a paid up member of the Real Estate Network which produces the Realtor we achieve rebates as shareholders which are paid out once a year.

Under S130 of the Act the vendor has one working day after receipt of a copy to cancel a sole agency he/she has previously signed. The copy must be given to the vendor within 48 hours of signing. Also under S131 the vendor can cancel any agreement after the maximum 90 day listing period for normal residential housing. All of this will need to be included in the revised Listing Authority.

Along with this revision each agency or its sales consultant will need to get a signed receipt from the vendor at the time of the listing to show that the vendor has been given guidelines as to what his/her rights are under the act and the agreement they’ve signed.

The most important change many vendors will notice in their relationship with their chosen sales consultant and agency is that there will be very few, if any, who will market a property without a signed listing authority. Our agency and many others who work with many repeat clients will need to risk insulting previous long term relationships by insisting upon a written instruction to act. Many readers will relate to this as their own accountants and solicitors have had to implement similar measures in their new legislative changes. This will effect commercial, industrial and anyone with high repeat clientele but under S126(1)(a) it is clear that, “the work is performed under a written agency agreement signed…”

These changes come with a considerable amount of cost to agencies, many of whom have struggled through the recession like most in other industries. Although there is no need now to put MREINZ as the membership is voluntary it is a requirement anytime the agency’s name is used to display the fact that “… the agent is licensed under this act …” We grumbled at the space we had to pay for in advertising just to put the MREINZ in. The cost of adding this lengthier requirement will unfortunately need to be added onto the cost of advertising, often paid for by the vendor.

Another issue for vendors to be aware of it that they will now have to wait 10 working days for deposit monies to be disbursed from the Trust Account and not just the 10 days as it is now. This is important to remember when waiting for a deposit disbursal that, in turn, is to pay for a purchase deposit.

Although there is much to do in the coming month with new licences, revising documents and retraining sales consultants I believe we will look back on this as a much needed ‘Spring clean’ throughout our industry. As much as we can see some glaring holes in the new system they will eventually be patched and we will all settle back in to provide much leaner, transparent and accountable systems of service to the public. We just hope you see the benefits after all this upheaval.