The institute alleges that the fixed fee which No Commission Property Sales charges customers regardless of whether their property is sold is effectively a ‘reward’ as defined by that Act.

An injunction is being sought under the Fair Trading Act restraining the franchisee from carrying on business until such time as it obtains a real estate agent’s license. “The fact that they don’t charge commission based on a percentage scale does not, in our view, enable them to operate outside of the Act,” REINZ president Howard Morley says in a statement.

“If they want to offer exactly the same services as real estate agents, which is what they have said that they do, they should be doing so on the same terms,” Morley said.

A further claim is made against the franchisee for misleading and deceptive comparative advertising. “They don’t disclose that if your house doesn’t sell you still have to pay NCPS’ fee,” Morley said. “If a real estate agent doesn’t sell your house you don’t get charged a commission.”

Morley says there are “three reasons for this action. Firstly to ensure that the public who deal with No Commission Property Sales have the considerable consumer protections afforded by the Act, secondly to protect the interests of our members who are entitled to compete on a level playing field, and finally to make sure that NCPS advertises their services fairly in any event.”