Advertising with survey plans

On December 20, 2021, the Resource Management (Enabling Housing Supply and Other Matters) Amendment Act 2021 was passed into law. From August this year, local councils of rapidly growing cities must apply new Medium Density Residential Standards (MDRS) to enable medium-density housing. It is important for real estate agents to feel confident in providing the right advice on the use of these plans.

Since August 2022, property owners have been able to build up to three dwellings on a single section, three storeys high, without obtaining resource consent.

The ability to build multiple dwellings on a site is now often openly marketed with surveyor plans to entice buyers by illustrating a property’s potential. The issue is that the copyright in these consent plans belongs to the surveyor. Perhaps even more importantly, the consent plans are prepared for a specific purpose, are subject to various Council conditions, and key features such as boundaries can change significantly until the survey plan is deposited with Land Information New Zealand.

The Coastal Otago Branch of Survey and Spatial New Zealand has noticed — and notified REINZ — of an uptick in real estate agents not disclosing the various conditions associated with consents plans that buyers should be informed of.

Advertising obligations

Real estate agents are aware of the requirement to not make false or misleading statements or unsubstantiated representations in their advertising material. This means that advertisements should be truthful and not contain any statement or visual presentation — or create an overall impression — which directly or by implication is likely to mislead purchasers.

Often, with the best intentions, real estate agents will publish a preliminary resource consent site plan to attract developers to enquire about the property. However, what these advertisements can fail to mention is that surveyors often draw up resource consent site plans as a part of the initial application process for consent to build on a property.

Council may then impose further conditions and requirements down the track, often requiring a change to the original plans — anything from reducing the size of the development to including additional easements or requiring the building to be set further back from the road. It is easy to see how an unassuming buyer may infer the potential of the site is more advantageous than it really is.

Further, to simplify resource consent plans to make them more digestible for the everyday purchaser, agents may crop out essential elements of a resource consent plan before uploading it on their website. However, a disclaimer on any document should never be removed. A disclaimer exists to protect the author of the site plan. It also protects real estate professionals. Without the disclaimer, the agent may be held liable for misrepresenting the property.

Infringement of copyright

Rule 5.2 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 states ‘a licensee must have sound knowledge of the Real Estate Agents Act 2008, regulations, rules issued by the Authority (including these rules), and other legislation relevant to real estate agency work’.

In New Zealand, copyright protection arises automatically once an original work is written down or recorded in some way, as provided under the Copyright Act 1994. A person infringes another’s copyright by reproducing another person’s work for any other purpose than the work was intended for.

Often, clients presume that they own the resource consent plans as they paid for the plans to be produced, but unlike the copyright in professional marketing photos, the copyright ownership in the consent plans remains with the surveyor.

When vendors enter into REINZ’s Residential Real Estate Agency Agreement, they expressly confirm to the agency that they have obtained all necessary authorisations to allow the use and disclosure of information in the marketing process.

However, REINZ and Survey and Spatial New Zealand strongly encourage real estate agents to double-check that their client has indeed obtained all necessary authorisations to use resource consent plans by confirming with the surveyor, as vendors often overlook this.

Therefore, when using a resource consent plan in any advertising material, it is important to ensure the surveyor consents to its use and that there is a clear disclaimer to ensure everyone is protected.

Joyce Chiu, In-house Counsel & Advisory Services, REINZ