Changes to Code of Conduct For Real Estate Agents

Changes to Code of Conduct For Real Estate Agents May See Sellers Providing Building Inspections.

"The Real Estate Agents Authority states The Professional Conduct and Client Care Practice Rules (the Code of Conduct) that set the minimum standards for New Zealand's real estate agents are changing."

(Friday 5th April, 2013) Victoria St, Wellington, NZ. It's been three years since the current Code of Conduct came into effect and it's time for it to be updated to better protect consumers and support a professional real estate industry.


The new Code of Conduct comes into effect on 8 April 2013.

According to the blog of Grimshaw and Co, best known for representing clients with leaky homes and buildings, "The obligation for an agent to disclose hidden defects, when the property is built of materials which are, or may be, at risk of weathertightness defects has been amended to require the agent to obtain confirmation from the client in the form of an experts report that the property does not have defects or to inform the purchaser of the significant risk of the defects and recommend the purchaser seeks expert advice."

John Brien owner of The HABiT Home & Building Inspections Team, one of the largest group of building inspection companies in New Zealand says "It make sense in a number of areas for Vendors to carry out a building inspection, whether the property is free from defects or not.
Sellers benefit by gaining knowledge of their property,which they may have overlooked, which buyers will otherwise discover. This can strengthen vendors negotiating power if they're better prepared. It can also clear the air between vendor and agent if there's any doubt about defects."

John also adds "With clause 9 of the Sale & Purchase agreement being recently introduced, we've seen a significant increase in new inspections from buyers. I think buyers can benefit in this situation at auction time if they miss out on the property, as well as potentially reducing buying costs by not having to get an inspection done themselves.

Now that real estate agents are held to account over what they do and don't say, it's highly likely they'll be suggesting the seller carries out an independent report to ensure there's no confusion between all parties.

Listed in the FAQ section of the new code at www.reaa.govt.nz was the explanation of why agents must ask vendors to prove there are no defects with the following statement. "A real estate professional who suspects that real estate may have a defect should not just take a client's word that their land is not subject to a defect without some form of dependable information."

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