Real Estate Authority Explained

Real Estate Authority
Native Name:Te Mana Papawhenua
Formed:[1]
Preceding6:-->
Superseding1:Real Estate Licensing Board
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Jurisdiction:New Zealand
Headquarters:95 Customhouse Quay, Wellington, New Zealand[2]
Employees:48 (2019/20)
Minister1 Name:Paul Goldsmith
Minister1 Pfo:Minister of Justice[3]
Minister8 Name:-->
Deputyminister8 Name:-->
Chief1 Name:Belinda Moffat
Chief1 Position:Chief Executive and Registrar
Chief2 Name:Denese Bates
Chief2 Position:Chairperson
Chief9 Name:-->
Child25 Agency:-->
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The Real Estate Authority (REA), formerly the Real Estate Agents Authority (REAA), is the New Zealand Crown entity responsible for the regulation of the New Zealand real estate industry as well as the agents within it.[4]

The purpose of REA is to promote and protect the interests of consumers with respect to property transactions, and to promote confidence in real estate agency work. The organisation's strategic goal is to see empowered consumers working with trusted real estate professionals.

The agency was established in 2008 under the Real Estate Agents Act, 2008. It became functional on 17 November 2009.[5] [6] The Crown entity falls under the jurisdiction of the Ministry of Justice.

History

The Real Estate Agents Authority (REAA), now the Real Estate Authority (REA) was established in 2009, after the enactment of the Real Estate Agents Act in 2008. The organisation took control of, and maintained, the roles of the now-defunct Real Estate Agents Licensing Board[7]

In February 2018, the organisation's operating name was changed from Real Estate Agents Authority to the Real Estate Authority. Also in February 2018, the REA launched settled.govt.nz, an independent and comprehensive government website for property buyers and sellers.

In 2011, REAA increased the operating levy from $494 per annum to $690 per annum, excluding GST.[8]

In the period of 2011-2012, REAA introduced a continuing education programme whereby all licensee's are required to complete 20 hours of education, of which 10 hours are prescribed by directly by REA. In 2012, 11 licensees had their licences cancelled on the basis of non-completion of the 20 hours of education. The continuing education programme was replaced with a continuing professional development (CPD) programme in 2019.

During 2012-2013, REAA found 124 complaints were consistent with unsatisfactory conduct, down from 152 in the 2011-2012 financial period, and a further 16 determinations of serious misconduct, up from 14 in the previous financial period.

In the aftermath of the 2016 Kaikōura earthquake, the REAA temporarily moved its headquarters from Level 2, 10 Brandon Street, Wellington to Level 3, 3 The Terrace, Wellington. According to the 2016-2017 Annual Report, the reasoning for the headquarters relocation was due to Deloitte House, its former headquarters, being deemed unsafe. In the days following the decision, REAA instructed its workers to work from home until a suitable building is found for the interim headquarters. An interim headquarters was located on 5 December 2017, the current headquarters at 3 The Terrace, Wellington.[9] REA then relocated to more permanent premises at 95 Customhouse Quay, Wellington.

In June 2020, REA announced the appointment of Belinda Moffat as its new Chief Executive, replacing Kevin Lampen-Smith who left in May.

Partners

According to the 2011-2012 Annual Report, REA, as a constituent department of the Ministry of Justice, undertakes its duties alongside, and with the help of, a multitude of Government Agencies. As a part of REA's monitoring and enforcing roles, they deal directly with the New Zealand Police, the Commerce Commission, the Serious Fraud Office, the Department of Internal Affairs, the Financial Markets Authority, and the Ministry of Business, Innovation and Employment (MBIE).

According to the 2012-2013 Annual report, other relationships include,[10]

Roles and Powers

Primary Role
REA is tasked with promoting and protecting the interests of consumers within the real estate industry and is tasked with promoting public confidence in real estate agency work.REA is tasked with maintaining a publicly-accessible register of licensees.

REA is responsible for 15 primary objectives.[11]

The responsibilities, according to the Real Estate Agents Act of 2008, of the Real Estate Authority are to,

Additional Role(s)

Legislative Instruments

Details about the regulations can be found on the REA website.

Form NumberSectionPurpose of FormNotes
138Application by an individual for an agent's licence.[12]
238Application by a company for an agent's licence.
338Application for a branch manager's licence.
438Application for a salesperson's licence.
538Declaration in support of an application by an individual for an agent's, branch manager's, or salesperson's licence.
638Declaration of support of an application by a company for an agents licence.
752Application for renewal of an agent's licence issued to an individual, a branch manager's licence, or a salesperson's licence.
8 52Application for renewal of an agent's licence issued to a company.
962 Application for temporary licence to carry on business as an agent.
1043(2)Evidence of issue or renewal of licence.

Complaints Assessment Committee

A Complaints Assessment Committee is a three-member executive committee tasked with making impartial decisions based on complaints, referred to them by REA in regards to the behavior of licensees. The membership of the Committees are drawn from a panel maintained by REA. People are appointed to the panel based on their personal attributes and their knowledge and experience of matters likely to come before a Committee, including knowledge and experience of the real estate industry, the law and consumer affairs. Every Committee must include a lawyer of at least 7 years’ legal experience.[13]

According to the 2010-2011 Annual Report, "The Authority must refer every complaint to a CAC and when directed by a CAC it must carry out further investigations. This includes all costs associated with investigations and any procedural costs.". The cost of managing the work of the CAC's, in the 2010-2011 period, amounted to $2,612,000.

Finances

REA receives no funding from the New Zealand Government and relies on fees and levies collected from licensed real estate agents. The financial situation of REA has been described as stable in relation to the stability of the number of licensees.[14]

The initial funding of REA consisted of capital funding and an interest free loan, to the values of $2,078,000 and $6,307,000 respectively, with a total value of $8,385,000. The loan, from the Crown, must be paid in full by 30 April 2016. In the period 2009-2010, REA made a $4,683,000 deficit; however, maintained $7,105,000 in cash on hand.

The net surplus of REA, for the financial period of 2010-2011, was $237,000; however, maintained $2,876,000 in cash and cash equivalents. REA's investments totaled $4,700,000 in term deposits.

The total revenue of REA, for the 2011-2012 financial period, was approximately $10,014,000; however, total comprehensive revenue was $1,015,000. Cash and Cash equivalents stood at $5,590,000.[15]

The total revenue, for the 2012-2013 financial period, was $10,418,000; however, total comprehensive income totaled 15.75% of total revenue, at $1,418,000. Cash and cash equivalents stood at $6,376,000.

According to the Annual Report, of the 2013-2014 financial period, the Total Revenue of REA was $10,754,000, and the Comprehensive Income was $1,616,000. The asset base of REA stood at $10,443,000, with Cash and Cash equivalents at $2,111,000 and other investments accounting for $8,107,000.[16]

In the financial period for 2016-2017, the Total Revenue of REA was $11,888,000 and the Comprehensive Revenue amounted to $1,439,000. In the same period, Cash and Cash equivalents amounted to $1,578,000, whilst Total Assets were valued at $10,232,000.

Operating Statistics

PeriodRenewal ApplicationsNew ApplicationsVoluntary SuspensionsComplaints ReceivedNotes
2009-201015,0301,8271,333456[17]
2010-201111,8121,2812,662598
2011-201212,6281,111 3,584749
2012-201311,5551,6243,132778
2013-201411,9831,9013,203685
2014-201512,3741,9213,213627[18]
2015-201612,9702,2043,999564[19]
2016-201713,5293,2862,279477
Total 101,88115,15523,4054,934

Management

Ministers Responsible

No.NamePortraitTerm of OfficePrime Minister
1Annette King31 October 200719 November 2008Clark
2Simon Power19 November 200812 December 2011Key
3Judith Collins12 December 201130 August 2014
4Amy Adams30 August 201425 October 2017
English
5Andrew Little26 October 201716 October 2020 Ardern
6William Sio17 October 2020Incumbent

Chief Executives

ExecutiveAppointmentEndNotes
Janet Mazenier1 January 200930 June 2010
Kieth Manch4 November 201012 December 2011[20] [21]
Kevin Lampen-Smith12 December 201113 May 2020[22]
Belinda Moffat8 September 2020Incumbent[23]

Board of directors

All members of the Board of Directors are directly appointed by the Minister of Justice. The Board is responsible for the overall governance of the organisation. The composition of the Board consists of experts in the legal, real estate, risk management, finance, and consumer rights sectors.[24]

The Board can have up to seven members, of which two must be either licensees or former licensees.

The current Board of Directors, according to the REA website, is:[25]

Notable cases

Notes and References

  1. Web site: Real Estate Agents Act 2008. legislation.govt.nz. Parliamentary Counsel Office. 10 November 2017.
  2. Web site: Contact Us. reaa.govt.nz. Real Estate Agents Authority. 10 November 2017.
  3. Web site: Real Estate Authority . Govt.nz . New Zealand Government . 2024-05-09.
  4. Web site: Welcome to the Real Estate Agents Authority . rea.govt.nz. Real Estate Agents Authority. 22 November 2017.
  5. Annual Report 2009-2010. Real Estate Agents Authority. 20 June 2010 . 1–58 . 28 November 2017.
  6. News: The Chief Executive/Registrar of the Real Estate Agents Authority, Janet Mazenier has resigned. 27 November 2017. Real Estate Agents Authority. 30 June 2010.
  7. Web site: Repeal of Real Estate Agents Act 1976. legislation.govt.nz. Government of New Zealand. 18 November 2017.
  8. 30 June 2011. Annual Report 2010-2011. Real Estate Agents Authority. 16. 29 November 2017.
  9. Annual Report 2016-2017. Real Estate Agents Authority. 17 October 2017. 1–60. 30 November 2017.
  10. Annual Report 2012-2013. Real Estate Agents Authority. 30 June 2013. 1–57. 30 November 2017.
  11. Web site: Real Estate Agents Act 2008. legislation.govt.nz. Parliamentary Counsel Office. 22 November 2017.
  12. Web site: Real Estate Agents (Licensing) Regulations 2009. legislation.govt.nz. Parliamentary Counsel Office. 22 November 2017.
  13. Web site: Complaints Assessment Committees. reaa.govt.nz. Real Estate Agents Authority. 28 November 2017.
  14. Lampen-Smith. Kevin. BRIEFING TO THE INCOMING MINISTER OF JUSTICE ON THE REAL ESTATE AGENTS AUTHORITY. Real Estate Agents Authority. 10 October 2014. 1–8. 28 November 2017.
  15. Annual Report 2011-2012. Real Estate Agents Authority. 20 June 2012. 1–68. 30 November 2017.
  16. Annual Report 2013-2014. Real Estate Agents Authority. 20 June 2014. 1–42. 30 November 2017.
  17. News: Nash. Kieran. Real estate agents slump. 3 December 2017. New Zealand Herald. 25 September 2010.
  18. Annual Report 2014-2015. Real Estate Agents Authority. 20 June 2015. 1–41. 30 November 2017.
  19. Annual Report 2015-2016. Real Estate Agents Authority. 30 June 2016. 1–54. 30 November 2017.
  20. News: Ormond. Dan. Real Estate Agents Authority Appoints New CEO. 28 November 2017. Real Estate Agents Authority. 4 November 2010.
  21. Manch. Kieth. Authority Update - September 2011. Real Estate Agents Authority. 8 September 2011. 1–9. 28 November 2017.
  22. News: Vanderhoof. Ngaire. Real Estate Agents Authority appoints new Chief Executive. 28 November 2017. Real Estate Agents Authority. 12 December 2011.
  23. Web site: Real Estate Authority (REA) welcomes a new Chief Executive. 2021-02-22. The Real Estate Authority. en-US.
  24. Web site: Our People. reaa.govt.nz. Real Estate Agents Authority. 28 November 2017.
  25. Web site: Our Board members. reaa.govt.nz. Real Estate Agents Authority. 27 November 2017.
  26. News: Gibson. Anne. Estate agent censured for cold-call offer to grieving widow. 3 December 2017. New Zealand Herald. 23 March 2010.
  27. News: Ormond. Dan. Real estate agent censured for ethical wrongdoing. 3 December 2017. Real Estate Agents Authority. 22 March 2010.
  28. News: Ormond. Dan. Real estate licensee found guilty of unsatisfactory conduct. 3 December 2017. Real Estate Agents Authority. 27 April 2010.
  29. News: Gibson. Anne. Estate agent censured over $5000 discrepancy in commission fee. 3 December 2017. New Zealand Herald. 27 April 2010.
  30. News: Gibson. Anne. Top real estate agent in the gun. 3 December 2017. New Zealand Herald. 20 August 2010.