NZLS disagrees with NZIF exemption application
The New Zealand Law Society does not favour granting New Zealand Institute of Forestry (NZIF) registered members an exemption from the requirement to be licensed under the Real Estate Agents Act 2008.
In response to the Ministry of Justice's request for comments on the NZIF application for the exemption, the Law Society says there are several matters of concern.
"The Real Estate Agents Act is a sound consumer-oriented piece of legislation and it is preferable that those engaged in real estate agency work are governed by the Act rather than by some separate regime unless in the particular circumstances there is a compelling reason why a separate regime should apply," it says.
While the NZIF Rules and Code of Ethics provide for various consumer protections, they are not specific enough in relation to a number of matters, the Law Society says.
Obligations under the NZIF Code of Ethics are not directed to disclosure of defects in land, and are open to interpretation particularly in terms of whether inquiry in respect of hidden or underlying defects would be necessary.
While real estate agents have an obligation under the Real Estate Agents Profession Conduct and Client Care Rules (REAA Rules) not to mislead customers about the price expectations of the client, there is no similar obligation in the Code of Ethics or NZIF Rules.
Also, while the NZIF Rules require members to inform their clients of any conflicts of interest in writing, there are no provisions concerning the form of consent that must be received by the registered members before proceeding with the work.
"The Real Estate Agents Act provides that real estate agents must obtain the consent of their client before carrying out work if a conflict of interest may exist, and such consent must be in a prescribed form and accompanied by the relevant valuation," the Law Society says.
It also notes that the Act says lawyers or conveyancing practitioners carrying out real estate agency work are not entitled to be remunerated by commission in addition to, or instead of, their ordinary professional charges.
"The Law Society submits that consideration should be given to imposing the same restriction on registered members of the NZIF. There would appear to be no principled reason why a different approach should be taken to the charging of commission by registered members on the one hand and by lawyers on the other."
Last updated on the 16th September 2019