What is NZ Real Estate Trust?

NZRET is an independent third party trust account service and is a product of SafeKiwi (New Zealand) Limited, first launched in May 2010. 

NZRET has been set up to serve as an alternative to a real estate agency's in-house operated trust account for property sale deposits.

All deposit funds are paid directly to a Public Trust bank account and held in trust for vendors and purchasers by Public Trust, as custodian.  The purchaser receives instructions to pay the deposit funds directly into the designated Public Trust bank account.  Deposit funds are never paid to a SafeKiwi operated bank account.

Public Trust is a Crown-owned entity and is the only signatory on the bank account.  Public Trust is a leading corporate trustee company in New Zealand, with more than $24 billion under supervision.

Since NZRET was launched over six years ago, Public Trust has successfully processed over 65,000 transactions, without incident.

Our proven systems and processes ensure that real estate agencies who nominate the use of NZRET adhere to consistent and industry best practice standards.  The integrity of NZRET has been built on its proven track record, therefore providing enhanced confidence and protection for vendors and purchasers in the handling of their deposit funds for property transactions.

As the custodian, Public Trust provides protection and peace of mind for vendors and purchasers knowing that deposit funds are held for them in an independent and neutral trust account.   This neutrality is in contrast to both in-house real estate trust accounts and law firm trust accounts.

The Custodial Agreement between Public Trust and SafeKiwi requires that all deposits be segregated in a Public Trust bank account so that they are clear at all times of any claims from SafeKiwi creditors.  The sole role of Public Trust in respect of NZRET is to receive and hold the funds on behalf of vendors and purchasers in trust, in a custodial capacity.

SafeKiwi’s Terms of Use provide that through the Public Trust the funds are held as a stakeholder thus aligning the obligations of SafeKiwi with the stakeholder provisions which are included in the REINZ/ADLS Agreement for Sale and Purchase.  These stakeholder obligations are the same that apply to in-house real estate trust accounts and law firm trust accounts.

SafeKiwi’s role is to provide the NZRET technology software in the form of a web-based registry which individually tracks and records deposit funds received, held and released by Public Trust for each property transaction.  SafeKiwi also promotes NZRET and provides the customer support.

The Real Estate Agents Authority (REAA), who is the governing body for the real estate industry in New Zealand, states that “Agents may nominate the New Zealand Real Estate Trust as a third party trust account provider”.

Participating real estate agencies, who nominate the use of NZRET, enter details of the expected deposit to be paid for each property transaction, along with the deposit reference details.  This allows deposit funds, once received and held by Public Trust to be accurately recorded against the correct property transaction in the NZRET registry.
 
The real estate agencies initiate the release of funds via the NZRET system and for every transaction release they must declare that they have obtained and hold the appropriate lawyer authorisations.

SafeKiwi undertakes daily checking of a selection of release transactions prior to the funds being released by Public Trust.  SafeKiwi sights and verifies documentation for the selected transaction to ensure agencies have obtained the correct written release authorisations.  These authorisations assist SafeKiwi in ascertaining that the person receiving the deposit is the person rightfully entitled to it.

The fact that these checks are carried out by SafeKiwi prior to the release of the deposit funds is an important feature of NZRET as a protection for vendors and purchasers.  This is in contrast to an in-house real estate trust accounts where audits are conducted on selected transactions, in retrospect, often several months after the funds have already been released by the real estate agency.

If the SafeKiwi checks on selected transactions uncover an agency not obtaining the required written authorisations, then the REAA has requested SafeKiwi to report any non-compliance directly to them.  Due to the proven quality and integrity of NZRET’s systems and processes there has not been any non-compliance reported to date.

NZRET is subject to review through Public Trust’s own annual audit processes and in addition SafeKiwi has initiated formal compliance assurance of NZRET conducted 3 times per year by an external audit firm duly licensed under the Auditor Regulation Act 2011.  Copies of the compliance reports are to be provided to the Real Estate Agents Authority and Public Trust.

SafeKiwi is also a registered Financial Service Provider #FSP302346. As part of this registration it is a compulsory requirement for SafeKiwi to be a member of a dispute resolution scheme. Therefore, SafeKiwi is a member of The Financial Dispute Resolution scheme too.

Please note: 
SafeKiwi does not pay interest to either the vendor or the purchaser on deposit funds held by Public Trust. This is no different to when deposit funds are paid to and held in an in-house real estate trust account as generally interest is not paid to the parties either. SafeKiwi receives all interest earned on deposits funds.  It does not charge fees to the parties to use NZRET and the interest is the only form of remuneration that SafeKiwi receives. In the vast majority of property transactions, the amount of interest earned on deposit funds will only be a very small amount.  
 

Benefits for Consumers:

SafeKiwi does not charge any fees for the use of the NZRET service.

  • NZRET is truly independent as funds are held in neutral territory - under the custody of Public Trust
  • Deposit funds are paid directly to and held by Public Trust, a Crown-owned Entity.  Deposit funds are never paid to a SafeKiwi operated bank account.
  • Centralised Trust Account Management provides consistent and best practice approach for the benefit of consumers
  • Deposit monies held in the Public Trust account are completely quarantined from any other obligations of Public Trust and are administered by the specialist corporate division, Corporate Trustee Services. Corporate Trustee Services is a leading corporate trustee company in New Zealand, with more than NZ$24 billion under supervision. Public Trust is a Crown owned Entity.

Benefits for Real Estate Agencies:

  • SafeKiwi does not charge any fees for the use of the NZRET service - no set up costs, no software to purchase, no transactional fees.
  • Deposit funds are paid directly to and held by Public Trust, a Crown-owned Entity.  Deposit funds are never paid to a SafeKiwi operated bank account.
  • Promotes administration staff to follow best practice protocols for deposit funds held in trust
  • Existing bank relationship remains
  • Can improve office efficiencies, reduce audit and administration costs
  • Electronic online receipts that can be printed and emailed (as opposed to handwritten receipt books)
  • Contract documentation and release authorizations can be uploaded as a permanent record
  • Authorised access to information 24/7 from any location
  • Quick and easy to use as a stand-alone application
  • Ideal for all Real Estate offices

Benefits for Lawyers:

  • Deposit funds held in an independent and neutral trust account and best practice protocols for releasing deposits are required
  • NZRET must (through Public Trust) hold deposit funds as a stakeholder and will in accordance with its duties as a stakeholder only release deposit funds from the Trust Account when it is satisfied that the person to whom it is proposed that the deposit funds be paid is legally entitled to them.  If there is any doubt as to the person entitled to the deposit funds and SafeKiwi gets notice of any dispute between vendor and purchaser about the release of the deposit funds then SafeKiwi will ensure that the relevant deposit funds are retained in the Trust Account until the matter is resolved, by legal proceedings if necessary
  • Therefore if any legal representative wishes for SafeKiwi to withhold the release of funds due to a dispute, they can do so by contacting us on 0800 895 180, or email support@realestatetrust.co.nz, with the address of the property and the client's name.
  • Centralised Trust Account Management provides consistent and best practice approach for the benefit of consumers

Benefits for Office Administrators:

“Using NZ Real Estate Trust to manage our deposits means I no longer have to spend lots of time reconciling deposit payments, allowing me to focus on other important tasks”

  • No more external trust account audits
  • View and track trust account information online from anywhere, at any time
  • Ensures adherence to best practice protocols for deposit funds

  

Legal & compliance

Mark Russell, Barrister (03) 260 3100 has carried out the legal work for NZ Real Estate Trust.

 

Support

Contact the NZ Real Estate Trust support team on Freephone 0800 895 180, Mon-Fri 9:00am-4:30pm, or via email at support@realestatetrust.co.nz

 

last updated: 25 Aug 2014