New Conduct and Client Care Rules will apply to all Real Estate agents from Monday 8 April 2013.

While the new rules are largely very similar to what was in place previously, they do include some important changes which all agents should be aware of.  The changes include:

  • An expansion of the requirements about obtaining legal or other technical advice before signing agency agreements and Agreements for Sale and Purchase.  Agents must now expressly recommend that legal and/or other advice is obtained before signing, rather than merely making the client and/or customer aware of the need for such advice as was required under the previous rules;
  • Once notice of cancellation of an agency agreement has been given or received by the agent, the agent must advise the client, in writing, of the name of each customer (if any) in respect of whom the agent would claim a commission, were the customer to conclude a transaction with the client;
  • Agents must explain in writing to clients when there is no direct or semi-direct comparison in sales data to base appraisals on;
  • Before an agency agreement is signed, agents must explain to the prospective client that how they choose to sell their property can impact on the benefits the agent receives.
  • An agent who is operating as a business must ensure that all salespersons employed or engaged by the agent are properly supervised;
  • Before signing any potential agency agreement, a licensee must explain to the prospective client, and set out in writing, exactly when the agreement will end;
  • The requirements regarding disclosure of defects have been amended to refer to defects that a “reasonably competent licensee” would have deemed likely to be a defect, rather than what was included in the previous rules (defects that “based on the licensee’s knowledge and experience” the agent should have known);
  • New rules regarding buyer’s agency agreements about what information must be explained before an agency agreement is signed, including only working within the terms agreed to by the client, submitting offers, and record-keeping obligations.

As with the previous rules, agents are expected to be aware of, and of course comply with, these rules, so we recommend agents familiarise themselves with the new rules as soon as possible.