Assignment 1
Learning outcomes

You will be assessed on the following learning outcomes:

1. Explain key points of the law relating to resource management.

2. Explain key implications of the Building Act as they apply to licensees
including compliance requirements and non-compliance implications.

3. Describe New Zealand housing styles and structures in accordance with
industry requirements and identify and describe different types and
conditions of internal and external building elements.

Assignment scenario

You work in a real estate agency in your local area. Your office is working with
a real estate developer who has resource consent to develop a greenfield
subdivision called Mataī Valley. The subdivision will have a mixture of housing
types. There will be small retail and commercial center.

Task 1: Resource Management Act 1991

You have a customer, Cindy, who has recently emigrated to New Zealand and
is hoping to buy a home in Mataī Valley. She explains to you that one of the
main reasons she chose to move her family to New Zealand was because of
the ‘clean and green image of this country.

‘It’s very different from where I’ve come from. There everything is crowded and there’s hardly any sign of the natural world left because it’s all concrete and steel! What’s the secret of this country?’ Cindy asks.

Using your own words, explain to Cindy the main principles and objectives of
the Resource Management Act 1991. To do this, answer these questions:

(a) What is the purpose of the Act?

(b) What are the three main principles of the Act? For each principle, explain to
Cindy three things landowners need to consider, giving an example for each.
Include reference to the sections of the Act.

(c) The Act covers which six elements of the environment? For each, give two
examples of relevant restrictions, controls, or obligations that are applied.

A council officer visits your office to give a talk about how council planning
affects the local area. During the talk, she discusses some of the inquiries the
council has received about the new subdivision. These include:

(a) A house with a maximum height of 7.5 meters, and net site coverage of
33% in the Hill Residential Activity Area.

(b) A service station in the Central Commercial Activity Area.

(c) A kōhanga reo (Māori language preschool) for up to 10 children in the
General Residential Activity Area.

(d) A boarding kennel on a 2-hectare site in the Rural Residential Activity Area.

(e) A 15-meter-high office complex in the General Business Activity Area.
Refer to the extracts from the City of Lower Hutt District Plan provided to
identify whether all facets of these activities would be allowed. Give reasons for your answers, with the relevant rule number(s) from the District Plan.

Task 3: Building law

Cory and Krystal Key are selling their first home, which they purchased
17 years ago. You have recently listed the property. As their family grew they
needed more space, so 5 years ago they had added an extension of two
bedrooms, a second bathroom and a second lounge.

Two weeks ago you introduced Balvinder and Nalini Singh to the property, and
they are now very keen to purchase it. As part of their research, they visited the local council. The council advised that the extension doesn’t have a code
compliance certificate.

When you asked Cory and Krystal about this, Cory replied that he knew they’d
got a building consent, and thought it was the same thing.

(a) Write a brief email to Cory. In it, explain the main differences between a
building consent and a code compliance certificate.

(b) Write a brief email to Cory and Krystal and explain:

(i) why the lack of a code compliance certificate presents a problem for
you and prospective customers, and

(ii) what options they have in its absence and the steps they could now
take, with a view to getting a possible offer from Balvinder and Nalini.

(c) Draft an email to Nelesh explaining the building consent process from
application to final completion of the work. Include details of each of the
following:

(i) all information needed for the application

(ii) how long a building consent lasts once it has been issued

(iii) what penalty (or penalties) may be applied for work carried out
without a building’s consent.

Task 4: Building styles

Visit two homes, each representing a different era from the list below:
• Villa (the 1880s–1910s).
• Bungalow (1910s–1930s).
• Art deco (1930s–1940s).
• State house (1940s–1960s).
• Seventies house (1970s).
• Mediterranean (1980s–current).
• Twenty-first century (2000s–current).

Download and complete the building styles tables from the Assessment area.
Add photographs and write field notes to compare and contrast the features of the two properties you have chosen. Include five photographs of each property, representing key elements, such as the exterior, interior, joinery, kitchen and living area.

Learning outcomes

You will be assessed on the following learning outcomes:

1. Explain the law of contract as it governs real estate transactions.

2. Explain the provisions of the law of agency and determine appropriate
signatories for different entities for given contracts.

Assignment scenario

You work in a real estate agency in your local area.

Task 1: Contracts

Explain contracts to Quentin

(a) Quentin, a work placement student in your office, is helping with the filing
of some recent real estate contracts. He asks you what a contract is.
Explain the six elements of a contract. Use examples of real estate
transactions to illustrate each one.

(b) Using your own words, explain the two requirements for an agreement
for the sale and purchase of real estate to be enforceable under section
24 of the Property Law Act 2007. Explain contracts to Moana

(c) Moana, a young customer, wants to make an offer on James’ property. She
has never bought a house before and admits she doesn’t know much about
contracts. Explain each of the following to her.

(i) What happens if she changes her mind before her offer is accepted.

(ii) The three ways James can respond when he receives the offer.

(iii) Whether Moana can add new terms to the contract after it has been
accepted.

(iv) The legal term used to confirm that the offer has become a contract.

(v) The four ways her contract can be discharged (come to an end).
Give a real estate example for each method. the contract can be discharged.

(a) Matthew and Nola have been married for 52 years. Matthew has
dementia and is about to move into residential care, as Nola is no longer
able to look after him at home.

Their property is registered as a joint family home under the Joint Family
Homes Act 1964. Nola wants to sell the house – partly to pay for
Matthew’s care, and partly so that she can move into a smaller home
nearer Matthew’s care facility.

(i) Briefly explain the purpose of the Joint Family Homes Act 1964,
and then discuss whether Nola can sell the house and, if so,
under what circumstances. To whom should you refer Nola for
further advice?

(ii) How would this situation be different if, before he became ill,
Matthew had granted Nola enduring power of attorney to
manage his welfare and financial affairs?

(b) Joe Ngata and Paul Devine have asked you to appraise their home for
sale. When you look at the certificate of title, you notice that the home is
registered in three names, which suggests a possible trust situation.
You ask Joe and Paul about this and they confirm that the property is in
a trust. Their solicitor, Elizabeth Bigham, is the third trustee. However,
they don’t want to involve Elizabeth yet, because she’s very busy and
very expensive.

Briefly explain to Joe and Paul who needs to sign the agency agreement,
and any subsequent sale and purchase agreement. Include the name of
the relevant legislation in your answer. To whom should you refer them
for further advice?

When you look at the certificates of title, you see the properties are both
registered in the name Hemopo Holdings Ltd. You check the Companies
Register and see that there are two directors, Matiu and Nathan
Hemopo.

Does Matiu have signing rights for the agency agreement and the sale
and purchase agreement? Why/why not?

Task 3: Agency law
Agency law: Part 1

Joe and Paul are very pleased with the service you’ve provided them and are
now preparing to list their home for sale. During a visit to their home, you realize that this will be their first property sale.

They say they’re confused about whether to have a sole or general agency and
don’t really understand how agency law works in practice. You offer to help them by preparing a set of notes that explain the main points.

Prepare brief notes on each of the following.

(a) If Joe and Paul list their property, will it be with you personally or
Waterford Real Estate Ltd? Give a reason for your answer.

(b) Briefly explain the main differences between sole agency, general
agency and joint agency.

Agency law: Part 2

Your friend, Barry, who lives in another town, phones you to complain about
the real estate agency that recently sold his home. He tells you:
‘I’ve since become friends with the young couple, Jack and Jenny, who
bought the property. They don’t think they got good service either. Here’s
what they told me.

The salesperson started by telling them that they should just drive by and
see if they liked the look of the house from the street. Well, they did that,
and they liked it. So he said he’d get around to showing them through some
time. They had to chase him to get through the house!

But it gets even worse! Jack and Jenny fell in love with the property and
wanted to make an immediate offer. It was nearly 5.00 pm, and the
salesperson said he’d bring the agreement forms to me the next day. Well,
they really didn’t want to wait, so they asked if they could just pop around
and present their offer. He didn’t mind at all, so they got him to phone me
and make the appointment. We negotiated the agreement around my dining
room table!

You know, looking back, I don’t think that salesperson earned very much of
his share of the commission at all! The agency really wasn’t any better,
because they just didn’t seem to accept any accountability for his
behavior.’

Briefly explain to Barry the requirements of
• introduction
• instrumentality, and
• effective cause
and describe whether the salesperson met his obligations in each case. Give at
At least one reason to support each of your answers.

Task 4: Contractual responsibilities

When they receive your notes about the law of agency, Joe and Paul are very
pleased, but they have more questions. Joe phones you and says, ‘I’ve been
reading about the Real Estate Agents Act, and that seems to involve a lot of
responsibilities for agents and salespersons. Can you briefly tell us how it affects your work with us?’

What would you say to Joe and Paul? Write the words you would use to explain:

(a) The fiduciary obligation you and your agency have to Joe and Paul.

(b) Other contractual responsibilities the agency has to Joe and Paul. Tell
Joe and Paul about at least four responsibilities, giving a brief, clear
description of each.

(c) What the Real Estate Agents Act 2008 says about agency agreements.
Identify and explain at least three sections.

(d) What the Real Estate Agents Act (Professional Conduct and Client Care)
Rules 2012 say about agency agreements. Refer to at least three rules.

(e) The contractual responsibilities Joe and Paul would have to Waterford
Real Estate Ltd. Tell Joe and Paul about at least three of these responsibilities.