"Required by law": REA Act vs agency policy

Three different things often conflated

When an agent says something is required, the underlying source is usually one of three things:

• Statutory requirement. The Real Estate Agents Act 2008, the Privacy Act 2020, the Fair Trading Act 1986, or another Act imposes a specific obligation. Identifiable by citation: "section 14" or "Rule 6.2" or "IPP 4."
• Agency policy. The agency's internal risk-management approach. Not a statute, not legally mandatory for the vendor, but binding on the licensee as an employee. Identifiable by wording like "our management requires us" or "this is our standard procedure."
• Individual agent preference. The specific licensee's habit or stylistic choice. Often indistinguishable from agency policy to the outside observer. Identifiable by absence of either statutory citation or agency documentation.

The three are not equally binding on the vendor. Statutory requirements are — but typically fewer than the agent's framing suggests. Agency policy can be pushed back against. Individual preferences are negotiable.

The question that reveals the source

When an agent invokes "required," the useful follow-up is a single question:

"Can you tell me which section of the Real Estate Agents Act 2008 or which rule of the Professional Conduct and Client Care Rules 2012 imposes this requirement?"

One of three responses typically follows:

• A specific section or rule is cited. Check it against our plain-language guide to the Act and the Rules. If the citation supports the claim, the requirement is statutory and must be complied with.
• A reference to agency policy or "best practice". The requirement is not statutory. You can discuss, negotiate, or refuse it on the merits.
• Evasion or redirection. "It's just what we do." "Everyone does it this way." "It would look unprofessional if we didn't." This is the clearest signal that the requirement is neither statutory nor well-grounded.

Asking the question politely and in writing is the most effective approach. The written exchange becomes a record. If the matter later becomes a dispute or complaint, the record is evidence of the specific question asked and the specific answer given.

What the REA Act actually requires of the agent

A concise list of the main statutory requirements on NZ real estate licensees, so that the genuine-vs-manufactured distinction becomes clearer. For full detail see the REA Act 2008 and PCCC Rules 2012 reference pages.

• Licensing — the agent must hold a current licence under the Act (s. 35 onwards).
• Acting in the client's best interests (Rule 6.2).
• Not engaging in misleading or deceptive conduct (Rule 9.2).
• Disclosing known defects to prospective purchasers (Rule 10.7).
• Disclosing conflicts of interest and referral benefits (Rules 9.14 and 9.15).
• Providing the vendor with the REA Agency Agreement Guide before the agency agreement is signed (Rule 11.1).
• Handing over information the agency holds about the property to the client on request (various rules).
• Professional Indemnity and Public Liability insurance at the agency level (regulatory requirement).
• Maintaining trust account records for deposits and other client money.

These are the requirements the Act directly imposes. Many day-to-day agency practices are consistent with these rules but not required by them. A specific yellow-highlighting convention on disclosure documents, a particular photo-approval workflow, a standard set of email wording — these are agency choices that are compliant with the Act without being mandated by it.

Common "required" phrases, decoded

"We're required to get your approval in writing for everything"

The Act does not generally require written vendor approval for all agency actions. The agency agreement pre-authorises many routine actions. Where the agency is asking for approval on trivial items and not on substantial ones, that pattern is agency practice, not a statutory mandate. See Selective Approval Theatre.

"Management requires this specific wording"

Specific document wording is generally an agency template decision. The Act does not prescribe clause-level wording for disclosure documents, marketing materials, or internal agency forms. Where the wording differs from what a reasonable vendor would agree to, the vendor can request amendment.

"We have to disclose this — the law says so"

Rule 10.7 requires disclosure of known defects. If the item is not a known defect about this specific property (for example, a generic statement about homes of the era), the law does not require its inclusion. Asking "is this a known defect about this property, or a general statement?" reveals which is which.

"We have to contact your solicitor about this"

The Act does not require agency-solicitor contact on any specific matter. The agency agreement may pre-authorise such contact, but the authorisation is contractual, not statutory. If the contact will cost you in solicitor fees, Rule 6.2 (best interests of client) engages.

"The law requires 'seek independent advice' to be highlighted in yellow"

No such statutory requirement exists. Some agency templates highlight this language as internal policy. Under Rule 9.14, a conflict-of-interest disclosure requires a recommendation of independent advice, but the statute does not mandate the colour, formatting, or visual prominence.

"We're legally required to send this to the Privacy Commissioner"

The Privacy Act 2020 requires notification of a notifiable privacy breach — a breach likely to cause serious harm. Routine information handling does not trigger the notification requirement. If the agency is threatening to notify OPC over ordinary matters, that is not a statutory requirement; it is a tactic.

When the citation is real

When the agent does cite a specific section or rule, the appropriate response is to accept the requirement and move on. Accepting a genuine legal requirement is not conceding a negotiating position; it is respecting the law. The distinction between statutory and non-statutory requirements allows the vendor to push back on the latter without undermining their own credibility on the former.

A useful mental model: you and the agent are both bound by the law, but only the agent is bound by the agency's internal policy. Requirements in the first category are shared; requirements in the second category are not.

Scripted response for written exchanges

Thank you for raising this. To make sure I understand the basis of the requirement: can you let me know whether this is required by the Real Estate Agents Act 2008 or the Professional Conduct and Client Care Rules 2012 (and if so, which section or rule), or whether it is an internal agency policy? I want to give the request appropriate weight either way.

This wording acknowledges the agent's position without conceding it. It does not accuse the agent of misrepresentation. It does not escalate. It simply asks for the source. The agent's response — whether a specific citation, a reference to agency policy, or evasion — is the information you need.

Where this guide sits in the section

Related: Selective Approval Theatre, "Our lawyer needs to check": who pays.

Rules cited: Real Estate Agents Act 2008, Professional Conduct and Client Care Rules 2012, Privacy Act 2020.