Agent non-disclosure: No guarantee of protection

A commercial property buyer in New Zealand is now locked into a $3.75 million deal after discovering that a significant portion of the carparking marketed with the unit sits on council land.

The agent knew there was a potential discrepancy between the apparent and actual boundary, but he didn’t disclose it. And despite the Real Estate Agents Disciplinary Tribunal finding unsatisfactory conduct, the buyer is still stuck with the deal.

The case, CAC v Brown [2026] NZREADT 21, highlights the importance of knowing what to ask an agent before you sign anything, which is far better protection than knowing your rights after the deal has settled.

What the law requires, and where it stops

Licensed real estate agents operate under the Real Estate Agents Act 2008 and its Professional Conduct and Client Care Rules. Under these rules, agents must not mislead buyers, disclose known defects, and exercise skill, care, competence and diligence throughout a transaction.

An agent who knows of a material issue and stays quiet faces disciplinary action, including fines, censure and, in serious cases, the loss of their licence.

Those obligations are robust in practice but limited in ways that buyers don’t always appreciate. For example, an agent isn’t required to disclose what they don’t know.

A 2026 tribunal decision dismissed a complaint against an agent who failed to flag a fence encroaching onto a boundary because there wasn’t a “red flag” that would have put them on notice.

Another limitation is that agents are not required to identify and verify property boundaries unless there is an apparent reason for concern. Marketing materials typically use approximate boundaries, and the buyer is expected to undertake due diligence to verify the detail.

What the Brown case adds is that “awareness of a potential discrepancy” changed this calculus, triggering a disclosure obligation, which the agent didn’t fulfil. The tribunal found his conduct misleading and a failure to exercise due care, though not because he should have surveyed the boundary himself, but because he had enough information to flag a concern and chose not to.

The gap between obligation and protection

Buyers must understand that disciplinary findings against agents don’t undo a settled transaction. The Brown buyer can pursue compensation through the tribunal (whose jurisdiction for financial losses runs to $100,000), but that ceiling is a small fraction of the stakes in a $3.75 million commercial deal. Losses above that threshold require separate civil proceedings.

Meanwhile, the buyer holds a property that doesn’t include what was marketed. The carparks that sit on council land can’t simply be acquired as they belong to the council, and whatever arrangement was previously in place may not be formalised or transferable.

This is why agent disclosure obligations, while genuinely important, are not a substitute for buyer due diligence.

What to ask an agent before you commit

The best protection a buyer has is to ask the right questions while there’s still time to walk away. Here’s a list of questions worth putting to any agent, in writing, before going unconditional.

• Is the agent aware of any discrepancy between what is marketed and what is included in the legal title? It’s the question whose answer would have mattered most in the Brown case. The agent knew something looked different to what was on paper. A direct question creates both an opportunity for disclosure and a clear record if non-disclosure occurs.
• Does the property include any land, access, or features that are not part of the freehold title – including easements, rights of way, leases from the council, or shared arrangements with neighbouring properties**?** Common examples of features that buyers assume are included but which may involve third parties or separate legal arrangements include carparks, driveways, water connections, and drainage routes.
• Is the agent or vendor aware of any survey, report, or legal advice that relates to the boundaries or title of the property? If such documents exist, request copies before signing. If the agent says they aren’t aware of any, that answer is on record.
• Are there any consented or unconsented structures, alterations, or additions on the property? This is particularly relevant for investment properties where renovations have been carried out over time. Unconsented work is a disclosure obligation under the Professional Conduct and Client Care Rules, but buyers who ask directly are in a stronger position than those who assume the agent has volunteered everything relevant.
• For any commercial purchase or property with significant carparking, shared access, or complex title arrangements, commission a title and boundary search before signing. A registered surveyor or lawyer can identify boundary issues that an agent may have missed or chosen not to pursue. The cost of that search is trivial against the cost of discovering a problem after settlement.

The agent works for the vendor

The dynamic that buyers don’t always fully register is that the agent is almost always engaged by the vendor. The agency agreement is with the vendor; commission is paid by the vendor; and the agent’s primary duty of care runs to the vendor.

Under the Professional Conduct and Client Care Rules, agents must deal fairly with all parties (including buyers) and must not mislead them.

But “dealing fairly” and “acting in your interests” are different things. An agent has a structural incentive to keep the deal together. That doesn’t make agents dishonest, but it does mean buyers shouldn’t treat the agent as their own adviser.

The REA complaints process – useful, but limited

If an agent has behaved improperly, buyers can make a complaint to the Real Estate Authority (REA). The REA’s complaints assessment committees deal with the bulk of cases, and the tribunal hears appeals and more serious matters. Findings range from no further action through to fines, censure, and licence cancellation.

The Brown finding (unsatisfactory conduct, with penalty to follow) sits at the lower end of the scale. The agent’s conduct was found to be misleading and negligent, but not wilfully or recklessly dishonest. That distinction matters for penalty, though not much for the buyer still holding a compromised asset.

The REA process is worth knowing, and complaints do produce outcomes. But it operates after the fact, and by the time a finding is issued, the purchase has settled and the buyer is dealing with whatever they’ve inherited.

Asking questions before signing is worth considerably more than the complaint filed after.

Goodwins works with buyers and investors across the New Zealand property market. For advice on due diligence, property selection, and protecting your position before you commit, call 0800 GOODWINS.