Selective Approval Theatre: when micro-consent masks macro-decisions

The pattern

Over three to six weeks of a typical listing, the agency will ask the vendor for approval on items like these:

• The exact wording of a clause in the disclosure document.
• Whether to include a specific descriptor in marketing copy.
• Open-home time and date.
• Photography selection and captioning.
• Whether a minor maintenance item should be mentioned in the listing.
• Whether a potential buyer should be contacted directly.

These requests are generally reasonable. They demonstrate the agency involving the vendor in decisions that affect the sale. The vendor experiences the engagement as collaborative.

Simultaneously, on items with more significant consequences, the agency acts without requesting approval. Items in this category typically include:

• Drafting a vendor warranty and undertaking in the sale and purchase agreement.
• Contacting the vendor's solicitor, which generates solicitor's fees at the vendor's hourly rate.
• Engaging a provider (inspector, photographer) whose invoice will be paid by the vendor.
• Adding a risk item to the disclosure document that amplifies the sense of defect.

The pattern is consistent enough that it is worth naming as a pattern. The sociologist Lauren Edelman (1992) called the general phenomenon "symbolic compliance" — visible structures that signal rule-following while the substantive conduct continues. Micro-approval is a symbolic structure that signals collaboration; macro-action is the substantive conduct that may not serve the vendor's interests.

Why the pattern exists

Two things are happening at once. The first is rational: micro-approval costs the agency nothing and reduces downstream friction. The second is more specific: on substantial items, seeking approval creates friction (the vendor may refuse or delay), and refusing or delaying directly affects the agency's commission timeline. Where approval would slow the closing, approval is often not sought.

This is not conspiracy; it is incentive structure. A licensee operating under a commission model has consistent reasons to push the transaction toward closure. On minor items, collaboration is cheap. On major items, asking means accepting the risk of "no." The rational response, in the absence of countervailing incentives, is to differentiate between classes of action.

The standard-form agency agreement contains clauses that make this differentiation easier to defend when challenged. Phrases like "the agency is authorised to engage professionals on the vendor's behalf" or "the agency may communicate with the vendor's solicitor on matters relating to the sale" pre-authorise a broad range of action. When the vendor protests a specific instance, the agency points to the clause.

The NZ law that pushes back

Three overlapping doctrines in NZ law limit the "we had pre-approval in the contract" defence.

1. Course of dealing

NZ contract law recognises that established practice between the parties can supplement or modify the written agreement. If the agency has routinely sought the vendor's approval before acting over a sustained period, the course of dealing establishes an expectation that approval will be sought. A clause permitting broader action does not displace that established expectation unless it is specifically re-invoked.

Burrows, Finn & Todd's Law of Contract in New Zealand (the standard NZ contract-law textbook) discusses course of dealing at length. It is not an override of the written agreement; it is a basis for interpreting the agreement in practice.

2. Estoppel by convention

Where both parties have operated on a shared understanding — even if unwritten — neither can later assert a position inconsistent with the understanding. If the agency's routine practice has communicated "we will seek approval," and the vendor has relied on that practice, estoppel by convention may prevent the agency from asserting "we had pre-authorisation all along" on a specific occasion.

3. Rule 9.1 — Best interests of client

Rule 9.1 of the Professional Conduct and Client Care Rules 2012 imposes a statutory duty independent of the agency agreement:

"A licensee must act in the best interests of a client and act in accordance with the client's instructions unless to do so would be contrary to law."

This duty cannot be contracted away. An agency clause that purports to authorise action against the vendor's interests is unenforceable to that extent. Incurring unnecessary legal fees, for example, is not consistent with Rule 9.1 regardless of what the agency agreement says.

The yes-or-no response

When the pattern reveals itself — typically at the moment the vendor receives an invoice or a draft warranty they did not expect — the effective response is a written request for a specific answer in a specific form.

Hi [agent], regarding the [specific action — e.g., contact with my solicitor on [date], drafting of the vendor warranty, engagement of [provider]]:

The pattern of our working relationship since [date] has been that you have sought my approval before acting on substantial matters. On this occasion, you acted without obtaining my prior approval. I may incur [specific cost — e.g., legal fees, obligation to remediate] as a result.

Do you accept responsibility for any costs incurred as a direct result of this action — yes or no?

If your position rests on the agency agreement, please identify the specific clause. I note that NZ contract law recognises that consistent practice between parties affects how the agreement is interpreted in practice. I also note that Rule 9.1 of the Professional Conduct and Client Care Rules 2012 imposes a duty to act in my best interests that is independent of any agency-agreement clause.

Please confirm your position in writing by [date].

Several things happen when this response goes out. The pattern is named. The specific action is challenged. The legal framework is invoked. A yes-or-no answer is required. Whatever the agent says becomes part of the record.

What the reply reveals

Three types of reply are common:

• Acceptance. "You're right, we should have asked first. We'll cover the cost." The matter is resolved. Continue with normal sale processes.
• Specific clause citation. "Under clause 12.3 of the agency agreement, we are authorised to act." At this point the course-of-dealing and Rule 9.1 counter-arguments apply. The written reply is now on the record. If the agency refuses to adjust and the vendor chooses to escalate, the record supports an REA complaint or a civil claim.
• Evasion or redirection. "We don't understand the question." "This is how we always work with vendors." "Let's move forward." Evasion is itself significant. The Rule 9.1 duty is not a negotiating position; it is a statutory duty. A refusal to address the question directly is evidence in any subsequent proceeding.

Drafting preventive language before signing

If the agency agreement has not yet been signed, the cleanest response to Selective Approval Theatre is to remove its footing in advance. Specific redlines to request:

• Narrow the authorisation clause. Replace "the agency may engage professionals on the vendor's behalf" with "the agency may engage professionals on the vendor's behalf only with the vendor's prior written approval in each instance."
• Specify the solicitor-contact clause. Replace broad solicitor-communication authority with limited authority to forward documents for information only, with any substantive contact requiring prior written approval.
• Cap the marketing budget. No expenditure above the written budget without the vendor's written approval.
• Require written disclosure of provider fees. Before engaging any provider, the agency must disclose the fee structure, including any retained margin or referral benefit.

These redlines do not eliminate the agency's operational flexibility. They narrow the pre-authorisation to what is genuinely needed for day-to-day marketing. Where the agency needs broader authority for a specific purpose, it can ask at the time.

After the pattern has surfaced

If the pattern has already become visible mid-transaction, the response sequence is:

1. Send the written yes-or-no response above.
2. File the response and reply with your other transaction records.
3. If the agency refuses to adjust, consider whether to raise the concern with the agency's branch manager before escalating to REA or civil remedy.
4. If the conduct is repeated or widespread, file an REA complaint citing Rules 6.2 and 9.2. See REA complaints: the realistic outcome.
5. For financial loss, consider a Disputes Tribunal claim under CGA section 28.

Where this guide sits in the section

Related: "Required by law": REA Act vs agency policy, "Our lawyer needs to check": who pays, Provider fee markups.

Rules cited: PCCC Rules 2012 (Rule 9.1), REA Act 2008, CGA 1993 (section 28), FTA 1986 (section 9).