In New Zealand a real estate agent who is licensed under the Real Estate Agent's Act (Professional Conduct and Client Care) Rules 2012 ('the Act') is subject to a set of rules when it comes to disclosing defects in a property they are selling. Put most simply, an agent must tell you if there is a known defect to the property. Further, if there is a hidden or underlying defect a reasonably competent licensee would deem likely, the Act also requires the agent to request the vendor and an expert confirms the defect doesn't exist, or advise the purchaser of that likely hidden defect. Finally, if the vendor asks their agent to keep something hidden, the Act requires the agent to stop acting for that vendor. In a nutshell, a licensed real estate agent:
- Must tell you about any known defects
- Must advise your of any likely hidden defects that the vendor has failed to confirm as otherwise
- Must cease acting for a vendor who asks them to withhold information on defects
With all of these protections in place, if you are purchasing a property off a licensed real estate agent, you should feel more confident that you know of the defects of the property you are purchasing. However, a prudent purchaser will always do their own due diligence, letting a law firm check over their documentation, requesting a builders report and thoroughly background checking a property. It's also important to remember that in a private sale where an agent isn't acting, the Act doesn't offer the above protection. While at times it is a case of 'buyer beware', at least when it comes to Real Estate Agents, you can be sure that the law requires them to keep you informed of both the good and the bad of every property they are selling.
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