A real estate transaction gone wrong can leave buyers, sellers, and landlords feeling like they have nowhere to turn, but in New Zealand, there is a clear path for holding real estate professionals to account.
The Real Estate Authority (REA) is the independent government body responsible for regulating licensed real estate professionals under the Real Estate Agents Act 2008, and when a complaint is made, it sets in motion a formal process with real consequences on both sides.
This article walks through every stage of that process, from the initial assessment right through to the Disciplinary Tribunal, so you know exactly what to expect.
How Does the REA Handle a Complaint?
What Happens at the Initial Assessment Stage?
When the REA receives a written complaint, it is first reviewed by the REA’s Registrar. The Registrar has the power under section 74 of the Real Estate Agents Act 2008 to decide whether to act on the complaint or decline to take further action.
If the complaint appears vexatious, frivolous, or falls outside the REA’s jurisdiction, it won’t go any further at this stage.
For example, a complaint about a minor advertising error that was quickly corrected might be closed at this point, without being referred to a formal committee.
If the complaint raises genuine concerns about a licensee’s conduct, however, it moves forward in the process.
What Is the Early Resolution Process?
Before a complaint is referred to a formal committee, the REA will often try to resolve it through an early resolution process.
This involves an REA facilitator speaking separately with each party to understand their position, then bringing both sides together to work toward a resolution.
The REA aims to complete this stage within 10 working days. If the complaint is resolved to the complainant’s satisfaction at this point, it can be closed without going any further.
If the parties can’t reach a resolution, the complainant can ask for the matter to be referred to a Complaints Assessment Committee (CAC).
What Is the Complaints Assessment Committee?
Who Sits on the CAC?
The Complaints Assessment Committee is an independent body that formally investigates serious complaints about real estate professionals.
The REA maintains a panel of up to 20 suitably qualified people to serve on individual CACs. Each CAC is made up of three people: a lawyer, a real estate industry member, and a person with knowledge and experience in consumer affairs.
This combination of backgrounds means the committee is well-placed to assess both the legal and professional dimensions of a complaint.
How Does the CAC Investigate a Complaint?
Once the CAC receives a complaint, it first decides whether or not to formally inquire into it. If it decides not to inquire, it issues a written decision explaining the reasons, and the process ends there unless either party files an appeal.
If the CAC does decide to inquire, it appoints an REA investigator who contacts the real estate professional and asks for their formal response.
Both parties then have the opportunity to comment on each other’s responses, and all information gathered is compiled into a written report for the CAC members to review together.
The CAC process is expected to be completed within 90 working days, though complex cases may take longer and timeframes are subject to the number of complaints the REA needs to deal with..
What Are the Possible Outcomes of a CAC Decision?
A Finding of Unsatisfactory Conduct
If the CAC finds that the licensee’s conduct fell short of the standard a reasonable member of the public would expect, it can make a finding of unsatisfactory conduct.
Before deciding on a penalty, the CAC will ask both parties for their views on what penalty would be appropriate.
The CAC has the power to fine an individual licensee up to $10,000 or a company up to $20,000.
It can also order the licensee to take steps to make good any harm caused, or refer the matter to the Disciplinary Tribunal to decide on compensation of up to $100,000 for financial loss suffered by the complainant.
Referral to the Disciplinary Tribunal for Misconduct
For more serious matters involving potential misconduct, the CAC can lay a formal misconduct charge and refer the case to the Real Estate Agents Disciplinary Tribunal.
Misconduct is a higher threshold than unsatisfactory conduct, and it involves behaviour that would be regarded as disgraceful by agents of good standing or by reasonable members of the public.
The Disciplinary Tribunal is appointed by the Ministry of Justice and operates independently from the REA.
When a case reaches the Tribunal, the stakes are significantly higher for the real estate professional involved.
What Powers Does the Disciplinary Tribunal Have?
The Real Estate Agents Disciplinary Tribunal has broader powers than the CAC and can impose far more serious penalties when it finds a licensee guilty of misconduct.
Those penalties can include cancelling or suspending a licence, imposing a fine of up to $15,000 for an individual or up to $30,000 for a company, and ordering the licensee to pay compensation of up to $100,000 to the complainant for financial loss suffered.
The Tribunal can also order a licensee to repay commission received in connection with the conduct in question, which in property transactions can be a substantial sum on top of any other penalties.
Even where the Tribunal finds unsatisfactory conduct rather than misconduct, it still has the power to impose fines, order remedies, and require the licensee to complete further training or meet conditions on their practice.
For real estate professionals, a Tribunal finding can affect not just their current position but their ability to work in the industry at all if their licence is cancelled.
The reach of the Tribunal’s orders, combined with the fact that its decisions are published and remain on the public register for three years, means that cases referred at this level carry consequences well beyond any financial penalties imposed.
Are REA Complaint Decisions Made Public?
One aspect of the REA process that people on both sides often don’t fully appreciate is how visible the outcomes can be.
Both CAC and Disciplinary Tribunal decisions are published in the REA’s decisions database and recorded on the public register of licensees.
Decisions remain on the public register for three years after the appeal period has passed. This means a finding against a licensee will be visible to potential clients, employers, and anyone else who searches the public register during that time.
For real estate professionals, the reputational impact of a published decision is often just as significant as any financial penalty.
Can You Appeal an REA Decision?
Both parties to a complaint have the right to appeal a CAC decision to the Disciplinary Tribunal. Appeals must be filed within 20 working days of being notified of the decision.
If either party is unhappy with a Tribunal decision, there’s a further right of appeal to the High Court, and on questions of law, to the Court of Appeal.
This means outcomes aren’t always final at the CAC stage, and it’s worth getting legal advice before deciding whether to appeal or how to respond to one.
Get Help With an REA Complaint
The REA complaints process moves through several stages, each with its own timeframes, rights, and risks, and understanding where you stand at each one is essential to protecting your interests.
Whether you’re a consumer who has been misled or poorly served in a real estate transaction, or a licensee facing a complaint under the Real Estate Agents Act 2008, Evolution Lawyers can help you understand the process and what your options are.
Our team of real estate agent lawyers works across property and real estate law throughout New Zealand, and we’re well-placed to advise on REA complaints, disciplinary proceedings, and appeals at any stage of the process.
Contact our team today to talk through your situation and get clear, practical advice on what to do next.
Frequently Asked Questions
What is the REA in New Zealand?
The REA (Real Estate Authority) is New Zealand’s independent government agency responsible for licensing and regulating real estate professionals under the Real Estate Agents Act 2008. The REA handles complaints about the conduct of licensed agents, branch managers, and salespersons. It oversees the complaints process, maintains the public register of licensees, and provides guidance to both consumers and the real estate industry.
How long does the REA complaints process take?
The REA aims to complete the early resolution stage within 10 working days. If a complaint is referred to a Complaints Assessment Committee (CAC), the CAC process is expected to be completed within 90 working days, though complex cases may take longer. The REA will keep all parties informed of expected timeframes and progress throughout the process.
What can the CAC do if a complaint is upheld?
If the CAC makes a finding of unsatisfactory conduct, it can impose a fine of up to $10,000 on an individual licensee or up to $20,000 on a company. It can also order the licensee to remedy the harm caused, or refer the matter to the Disciplinary Tribunal to consider a compensation order of up to $100,000. For more serious matters, the CAC can lay a misconduct charge and refer the case to the Disciplinary Tribunal directly.
What’s the difference between unsatisfactory conduct and misconduct?
Unsatisfactory conduct is where a licensee’s actions fall short of the standard a reasonable member of the public is entitled to expect from a competent real estate professional. Misconduct is more serious and refers to behaviour that would reasonably be regarded as disgraceful by agents of good standing or reasonable members of the public. The CAC can make a finding of unsatisfactory conduct; only the Disciplinary Tribunal can make a finding of misconduct.
Can a real estate agent lose their licence because of a complaint?
Yes. If the Disciplinary Tribunal finds a licensee guilty of misconduct, it has the power to cancel or suspend their licence. The Tribunal can also impose fines of up to $15,000 for an individual or up to $30,000 for a company, and order compensation of up to $100,000 to be paid to the complainant. A finding of unsatisfactory conduct at the CAC level won’t result in licence cancellation, but it can still carry significant financial and reputational consequences.
Can you appeal an REA complaint decision?
Yes. All parties to a complaint have the right to appeal a CAC decision to the Real Estate Agents Disciplinary Tribunal. Appeals must be filed within 20 working days of being notified of the decision. If a party is unhappy with a Tribunal decision, there is a further right of appeal to the High Court, and on questions of law, to the Court of Appeal.