F A Q

Frequently ask questions | Related links

We will regularly the Frequently Asked Questions on this page. Ask us if you have a question that is not answered here.

We have also collected some related links to provide information for the maintenance and management of your property.

Frequently Asked Questions

Here are some common questions I get asked:

Who pays for a Real Estate Agent’s service?

The landlord pays is the simple answer, and the tenant gets a whole lot of market knowledge and related expertise for free!

What do you mean by A, B, & C grade buildings?

  • A grade buildings  are typically  constructed after 1990 with larger 1000m2 floorplates with good CBD location and all the top specification items and A grade seismic ratings.
  • B Grade buildings are typically constructed after 1980, still have good air conditioning but have floorplates of around 500 m2 and locations within the core CBD but usually without commanding views etc.
  • C grade buildings are typically older towers with B grade seismic ratings or lower, usually not air conditioned and have smaller floorplates and less desirable locations and outlook within the CBD.

What is the minimum term I need to commit to?

A one year term is really the minimum length, an agent gets a commission for their time and expertise from a landlord based on the total rental they will collect.

For those wanting short term may I suggest:

http://www.theterracebusinesscentre.co.nz/

http://www.sharedspace.co.nz

Should I get legal advice before I commit to a lease?

Yes, the lease value is your annual rent x term in years so the total value can add up, also a lease commits you to a variety of commitments and costs which you need to be fully aware of. I can provide a copy of the latest Deed of Lease that solicitors commonly ask for. I usually recommend waiting till you have a conditional contract in place until you commit to legal time and cost, that way you don’t blow your budget on a lease for space that never happens.

What does Gross Rent mean?

Unlike leases of old, most leases for commercial space in Wellington are inclusive of building operating expenses like lift maintenance and council rates. That does not mean your own electricity, telecommunications, and sometimes toilet consumables.

Are your online listings the only spaces you can show me?

Definitely not, I have limited time and resources to put up the latest listings.  If you don’t like one listing I have quoted you then, with some feedback, I can always recommend something else which might be cheaper or better located or….

If I don’t pay the agent, what do they want from me?

If you ask an agent to send information to you, they have already committed some time to collating that information and particularly if they inspect a property or even properties with you it is surely fair, if not professional courtesy, to continue to deal with them in relation to that property. If the property they show you is not right for you, please tell them, believe me they are ok with that news because it will give them guidance on what else might meet your needs.

What does office space cost?

Quite simply Office Area x Rental Rate. Just roughly the rental rate ranges between $200 to $400 per square metre in Wellington city and so a budget of $12,000 for 2 or 3 people is a minimum.

Will I have to pay a deposit or bond upfront?

Every contract requires consideration and in leases for office space there is also the right to exclusive occupation for a required rental. You will most likely have to pay the equivalent of 2 months’ rental in advance as a deposit, not a bond. The agent will collect this and deduct their commission, it helps them get paid in a timely manner.

 

Property Guru or Real Estate Leader?

In addition to my academic degrees I have recently undertaken training in various aspects of the world of real estate including the Real Estate Agents Act, Fair Trading Act, Contractual Remedies Act and the REAA’s Professional Conduct and Client Care Rules 2012. The critical an underlying theme of much of this material is that of “disclosure”, namely the release of all information on things relevant and material to the customer. The customer in this context is the person or persons looking to purchase or lease real estate through the work of the real estate agent. This can at times make the agent unpopular with the client (the owner of the property seeking to sell or lease) who actually pays the agent a commission because of the prickly issue of seismic ratings…

In addition the real estate agent has a fiduciary duty of care to the client and must disclose relevant and material information about a prospective customer that will likely impact their performance as purchaser or tenant in a real estate deal. An agent will typically learn much about a customers business and history especially if the process of finding and negotiating a suitable property takes weeks or months and the agent must use their utmost discretion in disclosing or sharing information about a customer or even their particular market especially with the customers competitors. However the fiduciary duty to the client trumps the customer as the client may incur a financial loss if they unwittingly transact with a party who the agent knows poses a financial risk to them.

I whimsically started this conversation with a title of ‘guru’ and ‘leader’ because the Real Estate Act requires agents (referred to in the Act as licensees) to be competent with a body of knowledge of numerous disciplines all at once, namely legal, valuation, building inspector and council planning. I think the lot of the residential licensee is definitely more complex in this regard. The commercial must also have some knowledge of seismic ratings because customers rely on information supplied by them at least when they first meet and start to search for suitable properties. We must also be literate  on the various methodologies of commercial valuation and the determinants of the capitalisation rate which determines the rate of return of commercial investment properties. The Act requires licensees to supply market appraisals similar in many ways to valuations advising a potential vendor  of a likely sale price using pieces of evidence  and personal judgement. Real Estate is not just about driving round in nice cars and drinking lots of coffee!

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Related links

Compliance documents

Download compliance documents here. The documents are in PDF format. Click on link below. You can save the document once it has opened.

In-housecomplaintsprocedure.pdf

Real-Esate-Agents-Act-.pdf

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