Tough new rules will be introduced next year to stop house sellers getting caught in disputes between real estate agents, avoid fights over commission and usher in more transparency on leaky buildings.

Changes announced by the Real Estate Agents Authority demand agents tell people to get legal advice, be more open about complaints, disclose more about how they get paid and toughen up rules around selling defective properties.

The new regime, due to come into force in April, will introduce a more consistent test of whether agents should know about a hidden or underlying defect, such as problems with leaky homes.

Authority chief executive Kevin Lampen-Smith said the industry's code of conduct was working well but needed updating so it continued to protect buyers and sellers and improve standards.


The authority has heard 692 cases since it came into force more than two years ago. Many are fights between agents, catching sellers in the middle.

From April 8, agents must tell sellers when an agency agreement ends. That will make it clearer when one agency's role finishes and another can list a property.

Another rule attempts to stop agents claiming commissions after they have ceased work on a sale. They will have to instruct sellers and buyers to get legal advice before they sign anything. Agents operating as a business must ensure all sellers are properly supervised and managed.

Peter Thompson of Barfoot & Thompson said the changes were "ultimately good for consumers" but called for agencies to have more protection from vexatious or fictitious complaints.

Toughening up

From April 8, 2013:

• New rules around when agency agreement ends.
• Agents must advise all parties to get legal advice.
• Applies to engaging an agent and selling/buying.
• More transparency on payment.
• List of buyers which could entitle agent to payment after agency has ended.
• Tougher rules on selling leaky or defective houses.
• Complaints procedures to be kept up to date.
• Proper supervision and management by agencies.

Source: Real Estate Agents Authority Anne Gibson property editor