Generated on: 2022-06-22 11:55:15
CONFIRMED MINUTES
BOARD MEETING 26 APRIL 2022
At the
Board Meeting 21 June 2022 on
21 Jun 2022 these minutes were
confirmed as
presented.
Name:
Real Estate Authority
Date:
Tuesday, 26 April 2022
Time:
9:00 am to 12:22 pm
Location:
REA Office and Zoom, office and online
Board Members: Latham Lockwood, Tony Stack, Liz Nidd, Vern Walsh
Attendees:
Belinda Moffat, Phirak Appleton, Josh Doherty, Andrew Bulled, Nadine
Thomas, Saara Fourie, Victor Eng
Apologies:
Denese Bates QC (Chair), Mele Wendt
Guests/Notes:
Acting Chief Economist, Westpac
1.
Opening Meeting
1.1
Board in Committee
Issues for discussion with the Chief Executive were agreed.
1.2
Board and CE alone time
Papers and issues identified by Board were discussed with the Chief Executive.
·
The Board noted allocation of training budget for Board governance training
9) Board Training Budget
Board Handbook to be updated to outline what the training budget can be used
for.
Due Date:
21 Jun 2022
Owner:
Belinda Moffat
1.3
Karakia
The Senior Leadership Team joined and the meeting was opened with a Karakia.
1.4
Confirmation of Agenda
The agenda was confirmed.
Powered by
BoardPro
1
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
1.5
Interests Register
No new interests were declared and no conflicts were identified for the meeting.
1.6
Confirm Minutes
Board Meeting 22 March 2022 22 Mar 2022, the minutes were confirmed as presented.
The Board approved the minutes of the 22 March 2022 Board Meeting.
On motions duly made and seconded, it is proposed that the minutes of 22
March 2022 be approved.
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
2.
Actions from Previous Meetings
2.1
Action Item List
Due Date
Action Title
Owner
22 Mar 2022
1) SPE Narrative
Belinda Moffat
Status: Completed on 13 Apr 2022
31 Mar 2022
2) Explore the use of Instagram in the REA digital marketing
approach.
Status: Completed on 23 Mar 2022
31 Mar 2022
3) Qualifications FAQs and Website Information
Status: Completed on 23 Mar 2022
31 Mar 2022
4) Te Tiriti o Waitangi session with
Belinda Moffat
Status: Completed on 13 Apr 2022
26 Apr 2022
5) Review the Board reporting approach and refresh feedback from Belinda Moffat
Status: Completed on 20 Apr 2022
26 Apr 2022
6) Draft a Litigation Reserve Policy.
Status: Completed on 20 Apr 2022
26 Apr 2022
7) Fit and Proper Guidance
Status: Completed on 20 Apr 2022
26 Apr 2022
8) Provide the Board with key learnings from the staff financial
wellbeing survey once available.
Status: Completed on 20 Apr 2022
26 Apr 2022
9) CE to arrange for an economist to present to the Board.
Belinda Moffat
Status: Completed on 20 Apr 2022
26 Apr 2022
10) Sign and return the Audit Proposal Letter to BDO.
Status: Completed on 8 Apr 2022
26 Apr 2022
11) Notify CAC candidates of appointments and effective dates.
Status: Completed on 7 Apr 2022
27 Apr 2022
12) Complaints Improvement Project Update to be provided at the
April Board Meeting.
Status: Completed on 20 Apr 2022
30 Apr 2022
5) Awareness, Communication and Stakeholder Engagement
Strategy
Status: In Progress
Powered by
BoardPro
2
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
Due Date
Action Title
Owner
30 Apr 2022
6) Programme Manager reporting to be captured in the performance
report.
Status: In Progress
31 May 2022
18) Fit and Proper Guidelines
Status: Completed on 20 Apr 2022
21 Jun 2022
8) REA Emails for Board
Status: In Progress
30 Jun 2022
10) Review statutory guides and effective production and best
practice use principles for sector
Status: In Progress
30 Jun 2022
12) Māori Engagement Strategy Approach
Belinda Moffat
Status: Completed on 13 Jun 2022
30 Jun 2022
13) Provide an update on ethnicity and tenure pay parity.
Status: In Progress
31 Jul 2022
14) Meeting with REINZ
Belinda Moffat
Status: In Progress
31 Jul 2022
15) Property Management Regulation
Belinda Moffat
Status: In Progress
30 Sep 2022
11) Supervision
Status: In Progress
18 Oct 2022
16) Flexi by Default review
Status: In Progress
Actions were taken as read and the following actions were discussed:
· There is a duplication with Fit and Proper actions so they will be combined into one action.
· REA email addresses for the Board will be implemented shortly once all required system
changes have been assessed.
3.
Chief Executive's Report
3.1
Presentation from
, Acting Chief Economist for
Westpac NZ
The Chief Executive welcomed
to the meeting and invited him to share his
observations and economic insights with the Board. The key points that were covered included:
· This is the biggest fiscal response to a downturn and there has not been a situation like this
in modern times. COVID-19 is not a typical recession and we are seeing higher prices and
lower productivity. COVID impacted both demand and also productive capacity. NZ is still
recovering from the supply shock.
· There are a number of factors causing rising inflation in the short term at least, such as the
conflict in Ukraine.
· Rises in OCR are already happening but these are expected to continue over coming
months and years, and to impact housing mortgage rates
· Interest rates have risen significantly already; however banks are not seeing many people
fixing mortgages for terms of 5 years or longer. Most are opting for 12 or 18-month fixed
terms.
· Credit Contracts and Consumer Finance Act (CCCFA) changes to lending requirements:
some aspects are definitely more restrictive. This has added an extra layer of complexity
for buyers.
· House price reduction (around 10%) was expected to flow from increased cash rate and
higher mortgage rates (fear of overpaying, affordability challenge). Noting that this only
takes house price back to pre 2021 values
Powered by
BoardPro
3
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
· Some people may withdraw from the market as it is not the market they want
· Those that bought a couple of years ago enjoyed low interest rates but now have to face
that this windfall is over.
· Macroeconomists watch housing as an indicator of the wider economic conditions.
· Most property owners will be able to manage financially but they will have to change their
thinking around expenditure.
· People that bought for huge prices potentially had the expectation that interest rates would
remain low for some time. Covid has come as a shock.
· Possible rise in mortgagee sales: Forced selling is not the right mechanism and not
expecting a big increase in distressed sales (banks prefer to see mortgagees work out their
own sale process), but expect to see a slow in listings. LVRs will help with keeping
mortgagee sales at bay. Monitor past due loans reported by RBNZ as indicator of risk of
increased forced sales.
· Policy-makers’ response to cool demand: NZ was a world leader in health response rather
than economic response. But health response enabled NZ to rebound quickly. Mass
unemployment did not eventuate. We also did have a period of time where we were able to
operate without restrictions which aided some economic recovery.
· Inflation not expected to last at 7% but forecasts are constantly being revised.
· House price is an indicator of spending, if property value strong, spending will be strong.
· The Board thanked
for his valuable insights into the current economic
environment.
3.2
CE Report
The report was taken as read and Chief Executive Belinda Moffat highlighted the following areas
for discussion:
· The draft response to the Letter of Expectations in attachment 3.2.a. and approval from the
Board is sought
· Rent review process is underway, REA seeks to have issues with the property reflected in
the final rent value agreed.
· CPD topics are proposed in paragraphs 36-39 and board feedback is sought.
The Board discussed the following matters:
· Rent Review:
· CPD Topics: The Board supported the Diversity and Inclusion programme and agreed Te
Tiriti o Waitangi should be a mandatory topic although expressed uncertainty about
delivering online and the level of engagement with licensees. Belinda notes this is an
opportunity for leadership and selecting a strong provider with a fit-for-purpose course is
key. The Board endorsed all recommended topics.
· Financial wellbeing programme: the Board acknowledged their support of REA offering
these modules to staff.
· Board noted the demand on resources and noted its support for increased spend on
resources and increased spend on digital marketing, to maintain the momentum achieved
through Settled.govt.nz
Recommendations
Powered by
BoardPro
4
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
It was recommended that the Board:
Note the contents of this report.
Discuss and provide feedback on the matters raised in this report where indicated.
Outcome: Noted.
1) Response to Minister's Letter of Expectation
Send the response to the Letter of Expectation to the Minister with the draft
SPE.
Due Date:
28 Apr 2022
Owner:
Belinda Moffat
3.3
Update from the Audit & Risk Committee
The Board received a verbal update from the Audit and Risk Committee (ARC) Chair on the
outcomes from the meeting held on 22 April 2022:
No significant changes to the risk report since March.
Discussion was held around policies, with opportunity for consolidation of some policies
and agreement that the schedule of policies should be posted on BoardPro for the Board to
access.
The Q3 Minister’s Report was approved and will be finalised for the Minister shortly.
3.4
Update from the People & Capability Committee
The Board received an update from the People & Capability Committee member
on the
outcomes from the meeting held on 13 April 2022:
Chief Executive’s KPIs were signed off.
People and Capability Quarterly report: discussed number of leavers, exit themes and
ongoing COVID-19 response.
People and Capability Q4 plan was noted.
Policies allocated to the People and Capability Committee were noted.
Diversity and Inclusion policy to be brought forward to 2022.
EAP policy was widely supported.
Vaccination policy does not require amendment now but will remain under review.
Wellbeing and stress reduction, arising from vacancies and resourcing are priorities for the
team. Committee emphasised the importance of using the reserves to backfill absences
particularly in Legal and EIE.
3.5
Break
4.
Board Papers for Approval or Discussion
4.1
Property Management Regulation Update
The paper was taken as read and Belinda Moffat, Chief Executive, invited questions and
comments from the Board.
The Board discussed the following:
Powered by
BoardPro
5
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
The Board approved the reccomendations.
Recommendations
It was recommended that the Board:
Discuss and provide feedback on the contents of this paper
Approve the draft letter to be sent to the Ministry of Housing and Urban
Development.
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
2) Send letter to HUD on Property Management Regulation costs, risks and
consultation
Finalise and send letter to HUD on Property Management Regulation on costs,
risks and consultation
Due Date:
29 Apr 2022
Owner:
Belinda Moffat
4.2
Litigation Reserve Policy
This paper was taken as read and there were no queries or comments from the Board.
The Board approved the Litigation Reserve Policy.
Recommendation: It is recommended that the Board:
·
Review and approve the Litigation Reserve Policy.
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
7) Litigation Reserve Policy
Finalise and distribute the Litigation Reserve Policy.
Powered by
BoardPro
6
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
Due Date:
1 May 2022
Owner:
Belinda Moffat
4.3
2022/23 Statement of Performance Expectations and Financial Forecast
The paper was taken as read and Chief Executive Belinda Moffat highlighted the following:
The Audit and Risk Committee has seen this second iteration and supports the
adjustments.
Non-financial measures were highlighted as well as the addition of the introduction.
Financials remain unchanged from March.
Head of Corporate Services, made the following additional comments:
16,692 licensees have been confirmed after the conclusion of bulk renewals so there is no
significant change to initial assumptions.
The board is to note the proposal to increase Total Working Capital to
, an amended
policy will be presented for approval
The Board had no additional queries or comments relating to the SPE.
The Board approved the recommendations relating to the SPE.
Recommendation: It is recommended that the Board:
·
Discuss and provide feedback on the draft SPE and financial sensitivity
analysis.
·
Approve the draft SPE to be delivered to the Minister by 29 April 2022.
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
The Board approved the recommendation to increase the TWCP to
Recommendation: It is recommended that the Board:
·
Approve the recommendation to increase the TWCP to be set at
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
4.4
Employee Assistance Programme (EAP) Policy
This paper was taken as read and there were no queries or comments from the Board. The People
+ Capability Committee support the policy and recommend Instep be engaged to promote the
service to staff.
The Board approved the Employee Assistance Programme Policy.
Recommendation: It is recommended that the Board:
·
Approve the Employee Assistance Programme Policy.
Decision Date:
26 Apr 2022
Powered by
BoardPro
7
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
3) Promote EAP service to staff
Engage Instep to promote EAP service for staff
Due Date:
30 Apr 2022
Owner:
4.5
Fit and Proper Guidance Project
This paper was taken as read and there were no queries or comments from the Board. It was
noted that engagement with the sector will be progressed through the Regulator’s Forum.
Then Board approved the recommendations.
Recommendation: It is recommended that the Board:
·
Approve the draft Fit and Proper Guidelines.
·
Approve the proposed timeline for milestones.
·
Agree to delegate to the Chief Executive/Registrar the authority to approve
consultation document and related communication materials.
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
4.6
Complaints/Licensing Improvement Project
This paper was taken as read and
, Head of Regulatory Services, highlighted the
following points:
This is an opportunity for the Board to comment on the project scope, plan and timeline.
An additional supplementary paper has been provided in the Board Pro Governance Folder
which contains a more detailed project brief.
REA’s teams are really keen to get into this project and ready to engage in the programme.
A significant amount of change is coming and it is important to be clear and have a change
management approach set.
The Board discussed the following:
· Concerns were expressed around the aging cases backlog and complaints improvement
project not progressing as quickly as expected. If these experience more slippage REA
may need to look at an outsourced model to progress this.
The Board approved the recommendations
Recommendation: It is recommended that the Board:
·
Approve the proposed governance structure for the Project.
·
Discuss and
provide feedback on the scope, plan and timeline.
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
Powered by
BoardPro
8
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
4.7
Audit & Risk Governance Update
This paper was taken as read and
Head of Corporate Services, highlighted the key
change to the Terms of Reference review was the reference to a committee rather than
subcommittee.
The Board discussed the following:
· Delegation to the Committee to approve the quarterly report to the Minister was supported
· Quorum for the Committee was confirmed as two
· Board Chair attending committee meetings as ex-officio: clarity is needed around whether
the Chair attends as observer or whether there are voting rights. If two members were
away could the Board chair attend to be an ex-officio member with voting rights. It was
agreed that Chair does not need to be ex-officio. If quorum not met alternative meeting
dates need to be found.
The Board noted and approved the recommendations.
Recommendation: It is recommended that the Board:
·
Approve the Terms of Reference of the Audit & Risk Committee.
·
Approve an enduring delegation to the Committee to approve the regular
report to the Minister.
·
Confirm membership of the Committee.
·
Note the Internal Control Report.
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
4.8
Refreshed Information Systems Strategic Plan (ISSP) 2022-2024
The paper was taken as read.
Head of Corporate Services, invited
to
the meeting and highlighted the following:
The purpose of the refresh is to ensure IT supports our new strategy.
The ISSP assumes we are moving IT infrastructure completely to the cloud.
Emphasis is on correct storage of information.
REA will need to invest to achieve the aspirations in this plan.
The Board made the following comments:
The Board is pleased to see this progressing.
A broken link to the Government ICT Strategy 2015 on the contents page of Appendix B
needs to be updated.
The Board approved the ISSP 2022 subject to correcting a broken link in appendix
B.
Recommendations
It was recommended that the Board:
Approve the Information Systems Strategic Plan 2022.
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
Powered by
BoardPro
9
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
4) Information Systems Strategic Plan 2022
Finalise the ISSP and put on the intranet and BoardPro Governance
Documents folder.
June 2022: Approved by the Board on 26 April. To be published and presented
to staff.
Due Date:
30 Apr 2022
Owner:
4.9
Insurance Update
The paper was taken as read and
Head of Corporate Services, highlighted the
following:
Insurance will expire in June and this paper is to test comfort levels with existing cover.
Audit & Risk Committee had no issues and the only change is delegation to the Audit &
Risk Committee.
The Board discussed the following:
The Chief Executive reiterated the importance of self-insurance measures such as REA
investing in its own protection such as penetration testing to reinforce security measures
which is already in place.
The Board approved the delegation to the Audit & Risk Committee
Recommendations
It was recommended that the Board:
Approve a delegation to the Audit & Risk Committee to review and
approve the insurance programme for 2022/23.
Decision Date:
26 Apr 2022
Mover:
Seconder:
Outcome:
Approved
4.10 Break
5.
Board Papers for noting
5.1
Regulatory Services Team Paper
The paper was taken as read and
Head of Regulatory Services, highlighted the
following points:
REA is now through the bulk renewals period which was a significant effort for the team,
particularly in a working from home environment.
Early Resolution progress with aging cases is ongoing RST leaders continue to explore
options including potentially outsourcing to Fairway Resolution Service to progress this at
pace.
Compliance Team is supporting CACs with an increase in case traffic.
CAC induction day is taking place on 17 May.
Powered by
BoardPro
10
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
Slowing market: complaints are now often from buyers who missed out on properties, or
the sales process did not go the way they wanted. While Complaint volumes are slowing
they remain solid.
The Board made the following comments:
Percentage of licensees that come under bulk renewals:
confirmed around 5,500 so
about 35%. Around 2,500 are property managers with suspensions that still want to retain
that qualification and could be holding them in the hope for exemptions with developments
with property management regulation in the future.
In response to theme of poor customer service,
confirmed that there is a CPD topic
on complaint handling which was mandatory topic developed a couple of years ago and it
is still available as an elective topic.
Recommendations
It was recommended that the Board:
Note the contents of the Report and provide feedback on any matters raised.
Outcome: Noted
5.2
Legal Team Paper
The paper was taken as read and
, General Counsel, highlighted the following:
Two resignations in the legal team. Managing workload with a secondee working remotely
three days a week for the time-being. Recruitment is underway
Recommendations
It was recommended that the Board:
Note the contents of the Report and provide feedback on any matters raised.
Outcome: Noted
5.3
People and Capability Quarterly Report for Q3
The paper was taken as read and
Head of People & Capability, highlighted the
points covered by the People & Capability Committee at the April meeting on pg. 216.
Recommendations
It was recommended that the Board:
Note the contents of the Report and provide feedback on any matters raised.
Outcome: Noted
6.
Other Business
6.1
General Business
· The Chief Executive sought feedback on the revised reporting for the Board: pack size,
content, presentation.
Powered by
BoardPro
11
Minutes : Board Meeting 26 April 2022 - 26 Apr 2022
·
The Board found that the ARC pack was succinct and to the point. The Board pack was still
large but there is a lot of work happening that needs to be reported on and it is useful
information for the Board to receive.
·
The Board supported the performance report no longer coming to Board meetings.
·
The Chief Executive indicated the intention for the Board to meet in person in June.
6.2
Closing Karakia
The meeting was closed with a Karakia at 12.22pm.
7.
Close Meeting
7.1
Close the meeting
Next meeting: Board Meeting 21 June 2022 - 21 Jun 2022, 9:00 am
Unuhia, unuhia
Draw on, draw on,
Unuhia ki te uru tapu nui
Draw on the supreme sacredness
Kia wātea, kia māmā, te ngākau,
To clear, to free the heart,
te tinana, te wairua t e ara takatā
the body and the spirit of mankind
Koia rā e Rongo, whakairia ake ki runga Rongo, suspended high above us (i.e. in ‘heaven’)
Kia tina! TINA! Hui e! TĀIKI E! Draw together! Affirm!
Signature:____________________
Date:______________
14.07.22
___________
Powered by
BoardPro
12
