Complying with the REAA 2008

 

The following clause should be included in every sale and purchase agreement unless there are reasons why it is not correct in a particular situation in which case the appropriate disclosures must be made, or, if the sale is not for a residential property.  In the latter case, see below for the alternative clause.

 

In compliance with the Real Estate Agents Act 2008, the parties acknowledge that prior to signing this agreement they have been provided with, and signed an acknowledgment to that effect, a copy of the New Zealand Residential Property Sale and Purchase Agreement Guide (REAA 2008 Sect 133) and advised that:
• Other than their professional fees, none of the Agency Licensees or any persons related to them have any beneficial financial interest in this transaction. (Sect 136)
• They have been advised of the Agents in-house written Complaints and Disputes Resolution Procedures and that in the event of any matters of dissatisfaction, they may refer their issues to the Agency for consideration as provided for in those procedures. (Rule 10.2)
• Any matter of dissatisfaction may be referred by them to the Real Estate Agents Authority (
www.reaa.govt.nz) whether or not it has been addressed through the Agency procedures.  (Rule 10.3)
• They are entitled to take a reasonable time to seek legal, technical or other advice and information prior to signing this agreement. (Rule 9.9)

 

Note: in non-residential agreements the clause should read:

 

In compliance with the Real Estate Agents Act 2008, the parties acknowledge that :
• Other than their professional fees, none of the Agency Licensees or any persons related to them have any beneficial financial interest in this transaction. (Sect 136)
• They have been advised of the Agents in-house written Complaints and Disputes Resolution Procedures and that in the event of any matters of dissatisfaction, they may refer their issues to the Agency for consideration as provided for in those procedures. (Rule 10.2)
• Any matter of dissatisfaction may be referred by them to the Real Estate Agents Authority (
www.reaa.govt.nz) whether or not it has been addressed through the Agency procedures.  (Rule 10.3)
• They are entitled to take a reasonable time to seek legal, technical or other advice and information prior to signing this agreement. (Rule 9.9)

 

Note:     While the REAA 2008 provides for issues which must be disclosed, sometimes there are issues which should be declared even though they are not required under the Act. For example, if the purchaser has used the agents services a number of times (Stevens vs Premium Real Estate Ltd), or perhaps are a speculator, or if one of the parties is related to the agent but the relationship is not covered under the Act.

 

The simple rule is:   If in doubt as to whether or not make a disclosure, make the disclosure.    It pays to consider how the matter would be viewed if the sale turns nasty and the matter is uncovered after the fact. If it is considered that the issue could have influenced the purchaser's decision to buy, it should always be disclosed. If a party is going to be unhappy with the matter before the transaction is completed then they would be far more so after the transaction has gone bad.

 

Disclosures of this type can be made by including an acknowledgement in the agreement. Examples follow:

 

The Purchaser acknowledges that the Purchaser is a personal friend of the Agent.

 

The Vendor acknowledges that the Purchaser has been involved in previous transactions with the Agent.

 

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