Real Estate Contracts and Agency Law

Task 1: Contracts

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. Your answer should be up to 100 words for each element. (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. Your answer should be up to 50 wordExplain 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. Your answer should be up to 50 words. (ii) The three ways James can respond when he receives the offer. Your answer should be up to 50 words. (iii) Whether Moana can add new terms to the contract after it has been accepted. Your answer should be up to 50 words. (iv) The legal term used to confirm that the offer has become a contract. Your answer should be up to 50 words. (v) The four ways her contract can be discharged (come to an end). Give a real estate example for each method. Your answer should be approximately 25 – 50 words for each way the contract can be discharged. 3© The Open Polytechnic of Ne w Zealand2 2 Assignment Task 2: Ownership (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? Your answer for (i) and (ii) should be approximately 150 – 200 words in total. (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? Your answer should be approximately 100 words. 4© The Open Polytechnic of Ne w Zealand 2 Assignment (c) Matiu Hemopo has come to your office, saying he wants to sell two of his investment properties. He has just finished renovating one, and the other is nearly finished. He wants to put them on the market for a quick turnaround. 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? Your answer should be approximately 50 – 100 words. 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 realise 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. Your answer should be approximately 50 words. (b) Briefly explain the main differences between sole agency, general agency and joint agency. Your answer should be approximately 350 words in total. 5© The Open Polytechnic of Ne w Zealand 2 2 Assignment 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 behaviour.’ 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 least one reason to support each of your answers. Your answer should be up to 150 words in total. 6© The Open Polytechnic of Ne w Zealand 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. Your answer should be approximately 50 words. (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. Your answer should be approximately 50 in total. (c) What the Real Estate Agents Act 2008 says about agency agreements. Identify and explain at least three sections. Your answer should be approximately 25 – 75 words for each section. (d) What the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 say about agency agreements. Refer to at least three rules. Your answer should be approximately 25 – 75 words for each rule. (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. Your answer should be up to 100 in tot