Court verdict may affect real estate industry

Lucy Corry

Wellington, May 24, 2017

A Court of Appeal decision that limits the scope of criminal history checks on real estate agents may have implications for all regulators, Real Estate Agents Authority (REAA), the real estate industry watchdog has said.

The Court of Appeal ruled yesterday (May 23) that the REAA may only obtain the criminal history of applicants for real estate licences.

Criminal history defined

The Court defined ‘criminal history’ as criminal convictions and charges that result in a discharge without conviction or diversion.

The REAA can make further specific enquiries of Police to obtain information relevant to a licence decision, but cannot require applicants to submit to full police vetting.

The ruling follows an appeal by REAA against a 2016 High Court judgement that limited the amount of information it could obtain from police when carrying out checks on new and existing real estate agents.

That judgement limited the information that could be obtained by REAA to conviction and sentence information with a maximum penalty of $10,000 or more; pending charges for jury trials or offences with a maximum penalty of $10,000 or more; and a record of discharges without conviction or that resulted in diversion (but only in cases involving trial by jury or a maximum penalty of $10,000 or more).

Prior to the High Court’s decision, REAA obtained full criminal history information from New Zealand Police, including convictions, discharges and pending charges, when considering licence applications under the Real Estate Agents Act 2008.

These were all important when assessing whether someone was a ‘fit and proper person’, as required by the Act.

Potential implications

REAA Chief Executive Kevin Lampen-Smith said that he was pleased that the constraints imposed by the High Court had been removed, but was concerned about the potential implications of the decision for REAA and other regulators.

“REAA, like many public and private sector organisations, previously used standard police vetting procedures because we believed it was an important way to protect consumers involved in real estate transactions.

“Buying or selling a property is the biggest financial transaction that most people will ever be involved in and they must be able to rely on the honesty and integrity of the person they allow into their homes and businesses,” he said.

Mr Lampen-Smith said that it was important to remember that a majority of people applying for real estate licences did fully disclose their criminal history.

Under the Act, people who have been convicted of dishonesty offences are prohibited from holding a licence.

He said that REAA is currently considering the practical implications of the decision.

Lucy Corry is Media Communications Manager at the Real Estate Agents Authority based in Wellington.

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