November 3rd, 2022 | Sterling

“Fit and proper” – what does it mean and why does it matter in real estate?

We’ve all seen the glitz and glamour of real estate sales on shows like Selling Sunset and Million Dollar Listing. But aside from the drama and high-flying life, what really goes into becoming a real estate agent?

New Zealand has recently made the requirements clearer for aspiring NZ-based real estate agents, managers and salespeople. In August 2022, the Real Estate Authority (REA) published guidelines about the considerations they make when determining whether an applicant for a real estate licence is “fit and proper”.

The guidelines, referred to as the Fit and Proper Guidelines, set out the principles and factors that the REA registrar will assess when reviewing an applicant’s character. These guidelines provide transparency and clarity about a process that was already in place but not previously made public.

The guidelines state that the registrar will consider factors such as whether the person is of good character, their ability to communicate effectively, their ability to treat others with respect and courtesy, and any potential risk to public safety.

In making their assessment, the registrar will also look at an applicant’s prior convictions, both in New Zealand and in other countries – particularly the nature of the offence, time since the offence, and the applicant’s age at time of offence.

Certain convictions like dishonesty offences, offences involving physical or sexual violence, and other serious offences are unlikely to meet the bar for a fit and proper licensee. The registrar will additionally consider whether an applicant is or has been subject to disciplinary proceedings or other complaints and inquiries.

What does this mean for you?

The published guidelines make it clearer for prospective licensees, renewing licensees, and the public to understand the requirements to be assessed as fit and proper to hold a real estate licence.

Concerned applicants and/or their employers may wish to conduct their own due diligence by seeking a criminal history background check and other checks prior to submitting an application for a licence.

Other screening to consider undertaking are bankruptcy checks, professional disciplinary matters, directorship checks, and adverse media checks, as these are all issues that may be considered with the application. Increasingly in the digital era, where we have multiple working arrangements, work in varying locations, and have a variety of candidates, e-referencing and social media checks can help bridge a gap between you and your candidate and help you determine if they are a cultural fit.

This level of due diligence can help to ease the pressure of the application by identifying any potential issues or red flags prior to submission, saving time and money in the long term, providing you a compliance safety that ensures your organisation is protected from fraudulent candidates posing a risk.

If you’d like to learn more about the new REA guidelines or about the screening services that Sterling offers in New Zealand for licensee applicants, contact us at

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.