R ES4 2 0 Fundamentals of Real Estate /A 3

Assignment

3 RES420 Fundamentals of Real

Estate
Assignment 3

Notes

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This assignment focuses on the learning you have done in Module 4. The
assignment consists of one task:

• Task 1: Annoyed customers and clients.

Use the Task 1 Answer sheet to record your answers. You can download this
from the Assessment area.

Learning outcome

You will be assessed on the following learning outcome:

• Identify relevant points of consumer protection law applicable to real estate

practice.

Assignment scenario

For the purposes of this assignment, you have recently joined the team as the
newest salesperson at Waterford Real Estate Ltd, working under the leadership
of John Canon. John runs regular training sessions for the sales team and asks
for your assistance in preparing some case study material. He’s written a series
of scenarios, taken from real-life situations, and asks you to prepare an answer
sheet to be handed out at the end of the training.

For each scenario, John asks you to answer each of the following questions:
a) What, if anything, has been done wrong by the salesperson?
b) What legislation (if any) has been breached? (Identify the section and
subsection as required). If appropriate, how could a customer claim a
remedy? Note, more than one Act may apply in some situations.
c) Has the Real Estate Agents Act (Professional Conduct and Client Care)
Rules 2012 (the Code) been breached? If so, state the rule(s) that apply.
d) What organisation(s) would deal with such an issue, and why?
 R ES4 2 0 Fundamentals of Real Estate /A 3

Task 1: Annoyed customers and clients

1. Barbara Bullock phones the office and says, ‘We drove from the other side of
town to see the property at 17 Sentinel Drive because it was advertised as
five double bedrooms, and we’ve got a large family. But when we got there, it
was more like three double bedrooms, one single bedroom, and another
room that I could only describe as a small study. We are very disappointed
and annoyed that we wasted our time.’

2. Steve Smith comes to the office and complains, ‘When we listed our home
we gave the salesperson a copy of the registered valuation we’d had done
about a year ago. He said that because we had that, he didn’t need to do an
appraisal. That seemed strange – is it acceptable?’

3. When preparing an offer for Mr and Mrs Kongoola, recent immigrants with
limited English skills who are purchasing their first New Zealand business,
the salesperson failed to explain the meanings of ‘plus GST’, or
‘unconditional’. The offer was accepted by the client, and the customers will
now have to pay $112,500 more than they had expected to pay.

4. Bevan Hall phones and says, ‘Our neighbour, John, has recently put his
lifestyle block on the market. It’s a good property, but there’s a massive
power pylon in the front paddock. Imagine our surprise when we saw the first
ad in the newspaper. It showed the house and paddock, but there was no
sign of the pylon. Can a salesperson really delete something like that from a
photo?’

5. A salesperson is listing the home of the Harkness family, which is held in

trust. The signatories are Mr and Mrs Harkness and their solicitor, Jack
Dawson. Mrs Harkness asks whether she and her husband can sign the
agency agreement, rather than bothering the solicitor, ‘because he’s very
expensive’. The salesperson agrees that there’s no need to involve the
solicitor until there’s a sale and purchase agreement to be signed. He also
fails to give them the New Zealand Residential Property Agency Agreement
Approved Guide or advise them to seek legal advice before signing the
agency agreement.

6. Maria Tang calls and says, ‘When we bought our first investment property
3 weeks ago, the salesperson assured us that it would rent for at least $480
per week, and that we’d probably get $520 without any difficulty. We relied
on that information when working out our budget. But we’ve since found out
that this isn’t a popular area for rentals, and our property manager is
struggling to find us a tenant who’ll pay more than $440 per week.’

7. A salesperson is showing a 5-hectare lifestyle property to James. When

pointing out the boundaries, the salesperson refers to a large, flat paddock
on the eastern side as being included in the property. James comments that
that paddock is exactly what he wants to develop an equestrian facility,
including a dressage arena. In fact, that paddock belongs to the next-door
neighbour. The size of the paddock is approximately half a hectare.

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