BSRV4601 Fundamentals of Real Estate

Name | Manbir Kaur Student ID | 23933588

Learning Outcomes | Nga putunga ako:

1. Apply codes of conduct, rules, regulations, and legislation in the role of a real estate licensee.
3. Discuss laws relating to ownership and consumers protection in real estate practice.

Instructions | Tohutohu

 It is your responsibility to meet the submission deadline for each assignment.

 This is an individual task. You are to complete the assignment using your own words to demonstrate
understanding. Plagiarism will not be tolerated.
 Type your answers directly into the answer boxes within this Word document.
 Submit the entire Word document in Moodle via the submission link and instructions.
 The submission link in Moodle will close off on the deadline regardless of whether you have submitted
your assignment.

 No late submissions will be accepted without an approved extension.

Information | Nga korero

 These are competency-based assessments, which means no numeral mark or percentage is awarded.
Instead, you will receive an ‘Achieved’ or ‘Not Achieved’ grade.
 You must attain ALL key elements in each answer to gain an 'Achieved' grade for that question.
 If you attain an ‘Achieved’ grade in every question then you will be awarded an ‘Achieved’ grade for the
entire assignment.

Resubmission | Tuku ano

 If your initial result for your assignment is 'Not Achieved', you have TWO resubmission opportunities. This
means you can re-attempt those questions for which you attained a ‘Not Achieved’ grade.
 Upon resubmission, you will upload the entire Word document – but only re-attempt those questions for
which you attained a ‘Not Achieved’ grade. You will not resubmit your correct answers.
 Resubmissions must be made within 24 hours of the marked assignment being returned to you.

 It is your responsibility to submit the resubmission attempt/s within the 24 hour deadline.
BSRV4601 Fundamentals of Real Estate - Assignment 1

Question 1

John is a salesperson working for Sunflower Realty. John has listed a property for an elderly man,
Mr. Peters. Mr. Peters is not doing so well and now has to move into assisted living.
John thinks he should be able to negotiate a low price for the house because of Mr. Peters’ situation
and now considers buying the house himself as a rental investment.
John is very much aware of the provisions of the Real Estate Agents Act 2008 regarding contracts for
acquisition by a Licensee or related person. John knows that in order to comply with the provisions
of the Real Estate Agents Act 2008 he will have to pay market price for the house, and he will also
need to obtain a valuation from a Registered Valuer. However, John decides to ignore the Real
Estate Agents Act and he has a great idea to have his wife, Lynette, act as the buyer using her
maiden name.

1.1 John has breached a number of rules under the Client Care Rules. List any THREE of the Rules
John has breached and apply them to this situation, explaining in your own words how each rule has
been breached.

Do not copy and paste the rules/sections into your answer.

*2W.1 ord count guideline: 75-100 words.
Your answer:
1. John has violated rule 9 (client and customer care), specially rule 9.3 “Duties and Obligations of Agents”
by considering purchasing the property himself as Mr. Peters' agent. Therefore, his duty to get the best
price for Mr. Peters is compromised. Also, he has a personal interest in obtaining property at lower price.
2. Mr. Peters' decision-making process could have been influenced by John not telling him about his
intention to purchase the property, which was against the Rule 9.4 "Client and Customer Care for Seller’s
Agent".
3. By considering property purchase in his wife's name, John breached Rule 9.4 (Client and Customer Care
for seller’s agent). John's actions may not ensure fair treatment and proper handling of transaction, which
could jeopardize Mr. Peters' interests. Consequently, Mr. Peters may subject to financial or legal
repercussions.

1.2 If John, as the buyer of the property, continues with this proposal he will breach at
least TWO sections of the Real Estate Agents Act 2008. Identify TWO sections (including
subsections) and in applying them to this situation, briefly explain in your own words how John has
breached them.

Do not copy and paste the rules/sections into your answer.

2.2
*Word count guideline: 75-100 words.
Your answer:
1. Section (134) (2a)-Cancellation of acquisition contracts by the licensee or related persons: When John
attempts to acquire the property without complying with the Act's provisions regarding licensee
acquisition contracts, he violates this section. Despite following the required steps, he does not pay the
market price nor obtain a valuation from a Registered Valuer. In order for such transactions to be valid
under the Act, these steps must be taken.
2. Section (151) Offense to fail to disclose conflicts of interest: As per REA, Section 151 both a listing agent
and a potential buyer, John failed to disclose his conflict of interest (in accordance with section 136 (1)).
While representing Mr. Peters, he failed to disclose his intention to purchase the property for rental
investment purposes. In real estate transactions, licensees are required to disclose any conflicts of
interest.
Question 2
Use the following scenario to answer Questions 2.1-2.4.
Amanda is a licensed Real Estate Salesperson who works for Property R Us in Wellington, New
Zealand. Knowing that Amanda has a lot of experience and a good reputation, Hemi has come to
Amanda to ask her to list his property for sale at 19 Uptown Road, Wellington.
Hemi’s property is well-situated, with water views and a large back section. It is a four-bedroom
home with two bathrooms. When Hemi first purchased the property, the downstairs was a very
large rumpus room but Hemi converted it to a bedroom with kitchenette several years ago so that
his teenage son could live at home while he attended University.
During the process of researching this property Amanda has become aware that both the carport
and the converted rumpus room are unconsented. She raises this with Hemi, who says “ Oh don’t
worry about all that, the alterations were done years ago when consents weren’t required anyway.
And besides, I used to be a builder and did all of the work myself so I know it is to a high standard.
I’m the vendor and you’re acting for me so the buyers are covered by caveat emptor anyway. You are
not to draw anyone’s attention to this please.”
Amanda concedes and decides to gauge how much interest is generated before she takes any action
about this – or not.
Within the first three weeks of being listed, Amanda has shown 12 prospective buyers through the
property and is very excited about the high level of interest! Amanda does not mention the
unconsented work to anyone. One party has made a generous offer which matches the asking price.
Now Amanda is nervously awaiting the offer by way of signed Agreement for Sale and Purchase!
Answer the questions that follow.

2.1: Apply the provisions of the Real Estate Agents Act (Professional Conduct and Client Care) Rules
2012 to this situation and in your own words explain how or why you believe Amanda has or has not
breached them.

Your answer must include the identification and application of FOUR specific Rules (including
subsections where applicable) to this scenario to justify your answer.

Do not copy and paste the rules into your answer.

3.1
*Word count guideline: 150-200 words
Your answer:
According to the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012, Amanda
violated the following provisions:
1. Rule 6.2 - Standards of professional conduct: Amanda breaks this rule by not maintaining the
professional conduct expected of licensed agents. She violates the standards of professional
conduct by not disclosing the unconsented alterations to prospective buyers.
2. Rule 8.4 - Duties and obligations of agents (Agent should have a sound knowledge of act,
regulations, and rules given by the authority): In failing to address the issue of unconsented
alterations in a timely and transparent manner, Amanda failed in her duty to act in Hemi's best
interests. Having been unaware of the potential implications of the unconsented work on the sale
of Hemi's property, she should have informed him.
3. Rule 9.1 - Client and customer care: Amanda's lack of care towards Hemi and potential buyers
that she withheld information about the unconsented alterations. Clients and customers are not
adequately informed about relevant aspects of the property, as she neglects her duty.
4. Rule 10.7a -Client and customer care for sellers’ agents (Disclosure of Defects): A seller's agent
must provide accurate and complete information about properties to potential buyers. However,
Amanda failed to disclose unconsented alterations. She fails to meet the standard of client and
customer care expected of sellers' agents.
2.2
In light of Hemi’s instructions not to draw anyone’s attention to this situation;

(a) what do you think Amanda should have initially done?

(b) What should she do if Hemi insists on non-disclosure of this information?
(c) Identify TWO Rules upon which you based your answer.

Do not copy and paste the rule/legislation into your answer.

For clarity, please label your answers (a), (b) and (c).

4*.1Word count guideline: 75-100 words.

Your answer:
a. Amanda should have informed Hemi about her duties and obligations to disclose material information
to buyer. Her obligation was to emphasize on the potential consequences of non-disclosure and inform
her consent before taking any action.
b. As per Rule 10.7, it is the act to the duty of Amanda to clearly explain the risks of non-disclosures and
legal ramifications to Hemi in his best interests. However, despite the understandings of legal
consequences, if Hemi insists on non-disclosures, Amanda should seek guidance from her legal higher
authorities within the agency as per rule 10.8.
c. The rule 10.4 highlights that an advertised price must clearly reflect the pricing expectations set with
clients. In accordance to rule 10, Amanda failed to disclose unconsented alterations to the potential
buyers and does not align with client and customer care rules.

2.3
Imagine that you are also a Licensed Real Estate Salesperson and Amanda told you what she had
done. She asks you not to tell anyone.

Do the Professional Conduct and Client Care Rules 9.16, 9.17 and 9.18 (regarding confidentiality)
apply to this situation? Why/why not?

* Word count guideline: 75 words.

4 .2
Your answer:
The Professional Conduct and Client Care Rules 9.16, 9.17, and 9.18 concerning the confidentiality of client
information will apply in this case. Real estate salespeople must maintain confidentiality regarding information
obtained during their duties, unless disclosure is required by law or the client gives consent. The confidentiality
of Amanda's clients is still protected under these rules despite her request for confidentiality, unless she is
exempt. Considering the client/agent relationship, the duty of Amanda is to uphold the trust and interest of
Hemi. Amanda must navigate Hemi’s request to non-disclosure regarding unconsented alterations, while
ensuring that she remains complaint with her legal obligations. Amanda must maintain a delicate balance
between client’s confidentiality and her ethical duties as a real estate salesperson.
2.4

Is there anything that you - as a fellow Licensed Real Estate Salesperson - are obliged to do in this
situation?

Identify the Rule upon which you based your answer.

Do not copy and paste the rule into your answer.

4.3
*Word count guideline: 50 words.
Your answer:
I am responsible for ensuring compliance with the Real Estate Agents Act (Professional Conduct and Client
Care) Rules 2012. In accordance with Rule 7.2 (Duty to report misconduct or unsatisfactory conduct), I am
required to report any misconduct or unsatisfactory conduct observed.
Question 3

Robert owns a block of shops in Pleasantville, a small beach town. Whilst Pleasantville is small, it has
both 'good' and 'bad' areas and Robert’s shops are in the best part of town. He inherited these
shops from his late Uncle and has never actually seen them in person. In fact, he has not visited
Pleasantville since he was a child.

He has decided to sell the shops and has contacted Margaret of Pleasantville Real Estate for an
appraisal.

Margaret is aware that Robert has never seen his block of shops and he does not know its value. She
thinks that she can make a quick sale if she secures a listing at a cheap price.

In order to persuade him to do this she tells him that the shops are in a bad part of town and will be
difficult to sell unless he ‘meets the current market’. In order to prove her point she photographs
the shops on rubbish collection day (where the bags of rubbish are stacked outside on the kerb) and
got her brother to park his old rusty car in front of the shop.

Robert decides that he had better sell these shops as soon as possible and lists with Pleasantville
Real Estate under a Sole Agency for three months. He takes Margaret’s advice as to the listing price,
and at her request sends her $5,000.00 for advertising.

3.1 Explain how Margaret has engaged in misleading and deceptive conduct. In your answer:

 Name the statute that applies,

 Name any TWO sections she has breached.
 For each section chosen, in your own words, explain how she has breached them.

Do not copy and paste the sections into your answer.

*Word count guideline: 100 words.

Your answer:
Margaret violated the Fair-Trading Act 1986 by engaging in misleading and deceptive conduct. She violates
Section 9 of the Trade Practices Act, which prohibits misleading or deceptive conduct in trade, as well as
Section 13 of the Act, which prohibits false or misleading representations about goods or services. By staging
the photographs with rubbish and an old rusty car, Margaret portrays the shops as being in a bad part of town.
Consequently, Robert's decision to sell his property at a lower price is influenced by this misrepresentation.

3.2 What are the penalties for breaches of the Fair-Trading Act 1986 in the context of a false or
misleading representation concerning land? Name the section which supports your answer. Do not
copy and paste the section into your answer.

*Word count guideline: 100 words.

Your answer:
False or misleading representations regarding land can result in penalties up to $600,000 for corporations and
$200,000 for individuals under the Fair-Trading Act 1986. A breach of the provisions of the Act would be
penalized under Section 40 of the Act.
Question 4

Imagine you are an experienced Licensed Salesperson working for the firm Harrington Real Estate
Limited. The property market is booming! One day the Branch Manager, Toni, comes to you and
says, “Because the market has picked up so rapidly I will be employing three new Salespeople in the
next month. We really need to get Harrington’s name out there while the going is good!”

She also says, “Oh by the way, I’m keen for the three new Salespeople to benefit from your
experience and knowledge. Can you please prepare a presentation in readiness for their arrival and
on their second day, we will put aside two hours for this purpose. The presentation is to be titled
“Licensing and You” and is to cover the foundational principles of conduct expected of Licensed
Salespeople, and also ensure that they understand the limitations of their role when first employed.
I’ll come along to listen as well. Thanks!”

Fast forward five weeks and you make your presentation to the three new Salespeople: Mikaere,
Anna and Niko. All goes well and at the end you hold a Q&A session.
Answer each of the following questions from the participants and for each question, include ONE
relevant section (and subsection if applicable) of the Real Estate Agents Act 2008 which supports
your answer.

4.1 Anna asks, “Oh wow, I have misunderstood this whole time! I thought that passing my NZ
Certificate in Real Estate (Salesperson) (Level 4) meant I could call myself a Real Estate “ Agent” but
technically speaking I am only able to call myself a “Salesperson”! What is the difference between a
Licensed Agent and a Real Estate Salesperson?”

*Word count guideline: 50-75 words per response.

Your answer:
Anna, the difference lies in the roles and responsibilities, according to Section 49 of the Real Estate Agents Act
2008. While a licensed agent can operate their own real estate agency and employ salespeople, a real estate
salesperson is supervised by a licensed agent or branch manager and cannot operate independently.

4.2 Niko asks, “Toni, this question is for you. I’d love to really get ahead in my career and ultimately
become a Branch Manager. What qualifications or experience would I need before I could apply for
my Branch Manager’s License?”
6.1
*Word count guideline: 50-75 words per response.
Your answer:
Niko, according to Section 46(1) (licenses are valid for 12 months after entry into the public register),
and to become a branch manager, you must hold a Branch Manager's License. Additionally, within
the last five years or the equivalent is required as a licensed salesperson. You must also complete
the necessary qualifications, such as the New Zealand Certificate in Real Estate (Branch Manager)
(Level 5).
4.3 Mikaere asks, “My friend Tane would love to become a Salesperson but he was convicted of a
dishonesty crime 13 years ago. Would he meet the licensing criteria? Why/why not? And what
section and subsection of the Real Estate Agents Act tells us this?”
6*.2Word count guideline: 50-75 words per response.

Your answer: Tane and Mikaere would not meet the criteria of licensing. Mikaere, a person convicted of
dishonesty within the past ten years cannot be licensed under Section 37(1)(c) (Real Estate Agents Act 1976
prohibits people with cancelled licenses or certificates of approval within the past (since Tane’s conviction
occurred 13 years ago, he is not eligible for salesperson license).
5 years or whose licenses are suspended at the time of application). Since Tane has a conviction dating back to
13 years ago, he would not be able to meet the licensing criteria if the conviction occurred now.
4.4 Mikaere also asks, “Sorry to bring this up now but I am seriously considering going to Australia in
six months’ time. I want to work in the mines for a couple of years. My cousin is there and has asked
me to go over. After two years – and hopefully a bank account full of money – I plan to come back to
New Zealand to sell real estate so I really don’t want to cancel my License altogether. Am I able to
voluntarily put my license on hold, and if so, how long can I put it on hold for? Which section and
subsection of the Real Estate Agents Act covers this?”

7*.1Word count guideline: 50-75 words per response.

Your answer:
Mikaere, yes, Section 58 of the Real Estate Agents Act 2008 allows you to put your license on hold
for a period of up to 12 months. You cannot work as a real estate agent during this period. Your
license would need to be temporarily cancelled if you plan to be away for an extended period of
time. According to section 54 110 (2)c or 115, the registrar will revive the license only if there are no
other ground for cancellation or suspension.

4.5 Anna asks, “This presentation has been incredibly helpful, thank you. I feel much more confident
now. But there’s one more thing: if someone wants to make a complaint about one of us, what are
the options for the complainant?”

Your answer to Anna’s question should be a summary of the complaints process. Your summary
should include:

 What options a complainant has for initiating a complaint.

 What the Real Estate Authority will consider when a complaint is received by them and how the
final decision is known.
 Whether, when and why you should involve your Branch Manager or Agent.
 What information you are obliged to provide any prospective client before/as they sign an
Agency Agreement.

*Word count guideline: 200-250 words

Your answer:
Anna, as per Section 74 of the Real Estate Agents Act 2008, complainants can lodge a complaint
directly with the Real Estate Authority (REA) or through a complaints assessment committee (CAC). If
necessary, the REA will investigate the complaint further. There will be a communication between
both parties regarding the final decision. Your branch manager or agent should be informed
immediately if a complaint is made against you. As outlined in Section 134, you must provide clients
with a copy of the REA's approved guide before signing an agency agreement.
Question 5

5.1 Name the section of the Real Estate Agent’s Act 2008 that describes Unsatisfactory conduct.

*Word count guideline: less than five words

Your answer:
Section 72: Unsatisfactory Conduct

5.2 Name the section of the Real Estate Agent’s Act 2008 that describes Misconduct.

*Word count guideline: less than five words

Your answer:
Section 73: Misconduct

Fact scenario
Mahe Fitzgerald recently graduated with his Certificate in Real Estate (Salesperson) Level 4 and is
two and a half weeks into his new job as a Licensed Salesperson. He works for the Real Estate firm
S&P Property Limited. Eric is the Branch Manager of S&P Property Limited.

One day Tom and Nicole Anderson visit the offices of S&P Property Limited. Mahe is the only one in
the office at that time as everyone else was either out with clients or on their lunch break. Tom and
Nicole chat with Mahe, explaining that they want to sell their property. Seizing the opportunity,
Mahe invites them to sit in the meeting room and he goes through the process of how listings work.

Tom and Nicole are impressed by Mahe’s enthusiasm and tell him they’d like him to be the
Salesperson who lists their property! Mahe is over the moon at securing his very first listing and tells
Tom and Nicole that he will need $3,500.00 from them so that he can begin the marketing
campaign. Mahe gives Tom and Nicole a bank account number and they make the bank transfer
then and there on Tom’s phone. Mahe farewells Tom and Nicole at the door of the office, promising
to be in touch soon.

After Tom and Nicole leave Mahe sets to work immediately, inputting the necessary details into S&P
Property Limited’s database to trigger the automatic processes and correspondence. The computer
system automatically generates an invoice for $3,500.00 and emails it to Tom’s email address.

Two days later Eric gets a phone call from Tom, who is very upset and confused. He says, “I received
an invoice from S&P Property Limited via email the other day and the bank account number on the
invoice is different to the bank account I paid $3,500.00 into when we were in the office! What’s
going on??”. Eric promises to investigate and get back to Tom as a matter of urgency.

Eric rushes into Mahe’s office to find out what happened. He discovers that Mahe had given Tom his
personal bank account number into which to pay the $3,500.00. Eric immediately phones Tom back
to apologize profusely and tells Tom that he will retrieve the money from Mahe.

5.3 Identify whether Mahe’s conduct was (a) unsatisfactory conduct, (b) misconduct, or (c)
satisfactory.

*Word count guideline: less than five words

Your answer:
(b) Misconduct
95.1.4 Identify THREE Rules from the Client Care Rules that have been breached.

*Word count guideline: less than ten words

Your answer:
Following Rules are breached:
9.1 Licensee must act in best interests
9.2 Avoid client’s undue pressure
9.4 Mislead Price Expectations on Client

59. . 52 In applying the THREE Rules you have identified, for each Rule and in your own words
briefly explain how Mahe’s conduct breached them.

*Word count guideline: 100 words.

Your answer:
Rule 9.1: Mahe has breached rule 9.1 by failing to act in best interests of Nicole and Tom. Mahe
directed them to make payments directly to his personal bank account, instead of ensuring their
interest’s protections. Therefore, this could have expose them to lack of accountability and financial
risk.
Rule 9.2: Mahe putted undue pressure on Nicole and Tom to make payment of $3500 immediately
without providing them alternative options, which leads to unfair decision.
Rule 9.4: Mahe provided misleading information about the payment process, and provided personal
bank account instead of company’s. Mahe misrepresented the proper payment process.
 Question 6

Imagine you are an experienced Licensee. Your branch manager approaches you to ask you to help
her develop some educational material for an in-house training session she would like to run next
month. In particular, she is stuck on two Statutes: The Human Rights Act 1993 and the Privacy Act
2020.

She asks you to prepare some notes to help her understand each of these Acts. For each Act:

 give a brief summary of the purpose of the Act

 discuss, in general, the advice you would provide (in the context of Real Estate) about how
to behave according to the law.
 give one example of how the Act would be applied to real estate work.

*Word count guideline: 150-250 words

Your answer:
Human Rights Act 1993
Purpose: In New Zealand, human rights are promoted and protected by the Human Rights Act 1993. Several
grounds, including race, sex, marital status, religious belief, disability, and sexual orientation, are prohibited
under the law.
General Advice: All individuals should be treated equally and have equal opportunities in real estate,
regardless of their protected characteristics. When advertising, showing properties, negotiating with clients,
and communicating with them, agents must avoid discriminatory practices. Customers and clients should be
treated with respect, fairness, and dignity, regardless of their background.
Example: Suppose a real estate agent rejects a potential buyer based on their ethnicity. The act violates the
buyer's right to equal treatment and equal opportunity under the Human Rights Act 1993. Agents who engage
in discriminatory behavior may face legal consequences and reputational damage.
Privacy Act 2020
Purpose: Personal information collected, used, and disclosed by agencies in New Zealand is governed by the
Privacy Act 2020. A necessary part of protecting individuals' privacy rights is formulating rules and principles
regarding how personal information is managed.
General Advice: Real estate agents had an obligation to keep clients' personal information safe and offer
transparency in a secure environment. They had a legitimate reason to hold it, meaning they needed consent
from the individual before collecting, using or disclosing personal information.
Example: Under the Privacy Act 2020, a real estate agent could not disclose personal information about a
client without their consent. Therefore, sharing a seller’s number with a sundry without the seller’s consent
was a clear breach of their privacy. Action could be taken against the agent/s and agencies.

END
Index of comments

2.1 Question 1.1

2.2 RESIT Q1.2

3.1 RESIT Q2.1

4.1 RESIT Q2.2

4.2 RESIT 2.3

4.3 RESIT 2.4

6.1 RESIT Q4.2

6.2 RESIT Q4.3

7.1 RESIT 4.4

9.1 RESIT Q5.4

9.2 RESIT Q5.5