"Our lawyer needs to check": who pays

The three tiers of agency-solicitor contact

Not all agency contact with your solicitor is the same. Three categories:

• Administrative forwarding — the agency sends the solicitor a document (the sale and purchase agreement, the LIM, the Healthy Homes report) for the solicitor's information. No response is required. Solicitor time is minimal; invoice impact is minimal.
• Coordination — the agency confirms specific facts with the solicitor (settlement date, deposit terms, condition dates). Short written exchanges; solicitor time is modest.
• Substantive consultation — the agency asks the solicitor to review, draft, or opine on a specific matter (a proposed vendor warranty, an amended clause, a novel condition). Significant solicitor time; significant invoice impact.

The first two are generally covered by the pre-authorisation in the agency agreement. The third is where friction arises. Substantive consultation without vendor approval is a category of action that the agency agreement may nominally permit but that typically was not specifically negotiated. See Selective Approval Theatre for the broader pattern.

What NZ solicitor billing looks like

NZ residential conveyancing solicitors typically charge by the hour for non-routine work. Hourly rates vary by firm and seniority, commonly in the range of $250–$400 per hour plus GST. A brief written exchange may be billed at 6-minute or 15-minute increments. A substantive review of a proposed clause may involve reading time, drafting, and follow-up — easily an hour or more of billable time, even if the underlying matter is modest.

For a vendor whose conveyancing arrangement was an agreed fixed fee for the sale (typical in NZ for straightforward sales), additional agency-initiated contact falls outside the fixed fee and is billed separately. Vendors who expected a clean conveyancing cost can find themselves with several hundred to several thousand dollars of additional solicitor's fees, the basis for which is agency-initiated contact they did not authorise.

What the agency agreement typically says

Standard agency agreements usually contain language to the effect: "The vendor authorises the agency to communicate with the vendor's solicitor on matters relating to the sale and purchase of the property." Some variations add: "The vendor authorises the agency to engage professionals (including the vendor's solicitor) on the vendor's behalf in connection with the sale."

The clause is legitimate — some agency-solicitor coordination is necessary. But the clause is also broad. If read literally, it permits the agency to initiate costly consultations without asking the vendor. This broad reading produces the "we had authorisation in the contract" defence when the vendor queries a resulting invoice.

The narrower reading — and the one most consistent with Rule 9.1 — is that the authorisation applies to coordination and forwarding, not to substantive consultations with cost implications. A licensee acting in the vendor's best interests would either ask first or choose a less expensive path.

The course-of-dealing argument

NZ contract law's course of dealing doctrine limits how broadly a contract clause can be applied where the parties' actual practice has been narrower. If, over the course of the listing, the agency has routinely sought the vendor's approval before substantive actions — asking about disclosure wording, requesting confirmation of open-home times, seeking sign-off on marketing copy — the established practice sets an expectation. The agency cannot suddenly assert broad pre-authorisation on one occasion when its actual practice has been narrow throughout.

A record of the agency's prior approval-seeking emails is the evidence. Save those emails from the start of the listing; if a dispute arises, they demonstrate the working practice.

Rule 9.1 as the independent check

Rule 9.1 of the Professional Conduct and Client Care Rules 2012 operates independently of the agency agreement. It requires the licensee to act in the vendor's best interests. Incurring unnecessary legal fees on the vendor's account is not in the vendor's best interests. A clause in the agency agreement that purports to pre-authorise such action is unenforceable to the extent it conflicts with Rule 9.1.

In practice, this means the pre-authorisation clause does not give the agency carte blanche to accrue legal fees on the vendor's account. It gives coordinating authority subject to the licensee's overriding duty of care.

The written response

When the agency has contacted the solicitor without your prior approval and solicitor fees are likely to result:

Hi [agent], regarding the agency's contact with my solicitor ([solicitor name]) on [date] concerning [subject]:

The pattern of our working relationship since [start of listing date] has been that you have requested my approval before taking substantive action on my behalf. On this occasion, the agency contacted my solicitor without obtaining my prior approval. I will likely be billed for my solicitor's time attributable to this contact.

Please confirm in writing whether the agency accepts responsibility for any solicitor's fees arising from the agency's [date] contact — yes or no?

If your position relies on the agency agreement, please quote the specific clause. I note that the pre-authorisation clause is subject to Rule 9.1 of the Professional Conduct and Client Care Rules 2012 (best interests of client), which is an independent statutory duty that cannot be displaced by contract terms. I also note NZ contract law's recognition that established practice between parties (course of dealing) affects how a contract is interpreted in practice.

I'll send the solicitor's itemised invoice on receipt for your review.

Please reply by [date].

The response is specific and documented. It names the date, the subject, and the cost impact. It invites a yes-or-no answer. It identifies the legal framework. The agency's reply — whether accepting responsibility, citing a specific clause, or evading — becomes the record for any escalation.

When the reply is refusal

If the agency refuses to accept responsibility and relies on the agency-agreement clause, the practical options are:

• Negotiate a partial recovery. The agency may agree to cover a portion of the solicitor's fees, particularly if the refusal is more about principle than about the dollar amount.
• Accept and move on. For small amounts, the time and emotional cost of further dispute may not be justified.
• Escalate. For larger amounts or repeated patterns, an REA complaint citing Rules 6.2 and 9.2 is a legitimate response. The written exchange above is the evidence.
• Disputes Tribunal claim. Under the Consumer Guarantees Act 1993 (section 28), the agency's services must be supplied with reasonable care and skill. Incurring unnecessary legal fees for the vendor is inconsistent with reasonable care. Claims up to $30,000 are heard in the Disputes Tribunal without legal representation required.

Preventing the issue up front

Before signing the agency agreement, the pre-authorisation clause can be narrowed. Redline language to request:

The agency may communicate with the vendor's solicitor for administrative purposes (forwarding documents, coordinating settlement-related logistics, confirming routine facts). The agency shall not engage the vendor's solicitor in substantive consultations (including reviewing draft documents, seeking legal opinions, or undertaking any action expected to generate hourly-rate billing) without the vendor's prior written approval in each instance.

This clause preserves the legitimate coordination function while closing off the cost-accumulation route. Agencies that are comfortable with their existing practices will usually accept the redline. Agencies that resist are signalling that they want the broader authorisation — which itself is information about how they intend to operate.

Where this guide sits in the section

Related: Selective Approval Theatre, "Required by law": REA Act vs agency policy.

Rules cited: PCCC Rules 2012 (Rule 9.1), REA Act 2008, CGA 1993 (section 28).