Complaint No CO4518 [2014] NZREAA 188 (25 June 2014)

Last Updated: 25 February 2015

In the Matter of Part 4 of the Real Estate Agents Act 2008

And

In the Matter of Complaint No: CO4518

In the Matter of The Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 25th day of June 2014

Complaints Assessment Committee

CAC301

Deputy Chairperson: Patrick Waite

Panel Member: Rex Hadley

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 The Real Estate Agents Authority (the Authority) received a complaint from the Complainant in regard to the Licensee. The Licensee holds a salesperson’s licence and works for the Agency.

1.2 The complaint relates to the Complainant’s unsuccessful offer to purchase a property (the Property) for which he believed that he had reached a verbal agreement with the Vendor. The Complainant believes that the Licensee did not deal fairly with him by not disclosing that there was another party interested in purchasing the Property. Until he signed a multi-offer document he was unaware there were other interested parties.

1.3 The Authority referred the complaint to the Complaints Assessment Committee (the

Committee). Pursuant to section 79(1) of the Act, the Committee considered the complaint on 9

January 2014 and made a decision to enquire further.

1.4 The Committee invited the Licensee to provide a response to the complaint. This was received on 27 January 2014. The Complainant was provided with a copy of this response and was invited to provide further comment, which was received by the Authority on 7 February 2014. The Committee also sought comment from the Vendor of the Property on the issues raised in the complaint, which it received on 22 May 2014.

1.5 Having satisfied itself that it had completed its inquiry into the complaint, the matter was considered by the Committee on 27 May 2014.

1.6 The hearing was conducted on the papers pursuant to section 90(2) of the Act and the

Committee made its determination on the basis of the written material before it.

2. Material Facts

2.1 The Complainant viewed the Property with Ms. C from Agency X on 22 November 2013 who was acting as the buyer’s agent for the Complainant, as she is an associate of the Licensee, who was out of town at that time.

2.2 During the viewing the Complainant discussed the price with the Vendor. The Complainant left the Property in the belief that he had reached an agreement to purchase the Property at the Vendor’s asking price. An offer was drawn up that evening by Ms. C who contacted the Licensee to arrange for the offer to be presented. The Licensee advised that the offer could not be presented until the following morning as she was out of town.

2.3 In the end because of other commitments the Licensee could not present the offer until the afternoon of 23 November 2013 however by then another offer had been submitted to the Licensee. The Complainant, who was not aware there were other interested parties, was requested by the Licensee to sign a multi offer form which he did and he returned the form to the Licensee via Ms. C.

2.4 The offers from both the Complainant and the other party were then presented by the Licensee to the Vendor.

2.5 Later that evening Ms. C was advised that an offer from the other party had been accepted.

3. Relevant Provisions

3.1 The Committee examined the information supplied by the Complainant in his written complaint to determine whether S.72 or S.73 of the Real Estate Agents Act 2008 (the Act) applied i.e. was there evidence which would indicate that the Licensee could be considered guilty of unsatisfactory conduct (S.72) or misconduct (S.73).

Section 72 Unsatisfactory conduct

For the purposes of this Act, a licensee is guilty of unsatisfactory conduct if the licensee carries out real estate agency work that –

(a) Falls short of the standard that a reasonable member of the public is entitled to expect from a reasonably competent licensee; or

(b) Contravenes a provision of this Act or of any regulations of rules made under this Act; or

(c) is incompetent or negligent; or

(d) would reasonably be regarded by agents of good standing as being unacceptable.

Section 73 Misconduct

For the purposes of this Act, a licensee is guilty of misconduct if the licensee’s conduct-

(a) would reasonably be regarded by agents of good standing, or reasonable members of the public, as disgraceful; or

(b) constitutes seriously incompetent or seriously negligent real estate agency work; or

(c) consists of a wilful or reckless contravention of – (i) this Act; or

(ii) other Acts that apply to the conduct of licensees; or

(iii) regulations or rules made under this Act; or

(d) constitutes an offence for which the licensee has been convicted, being an offence that reflects adversely on the licensee’s fitness to be a licensee.

3.2 Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009

The Real Estate Agents Act (Professional Conduct and Care) Rules (the Rules) set out the standard of conduct and client care that agents, branch managers and salespersons (licensees) are required to meet when carrying out real estate work and dealing with clients. Whilst these rules are not meant to be an exhaustive list, they set minimum standards that licensees must observe and a reference point for discipline.

In relation to this complaint the following rules may apply:

Rule 6 Standards of professional conduct

6.2 A licensee must act in good faith and deal fairly with all parties engaged in a transaction.

6.4 A licensee must not mislead a customer or client, nor provide false information, nor withhold information that should by law or in fairness be provided to a customer or client.

Rule 9 Client and customer care

9.2 A licensee must not engage in any conduct that would put a prospective client, client or customer under undue or unfair pressure.

4. Discussion

4.1 The Complainant clearly believed that an agreement was reached with the Vendor during his visit to the Property on 22 November 2013. He maintains that he was not aware that there were other interested parties and that his offer would not be presented until a further viewing from another interested party had been completed.

4.2 The Licensee has confirmed that whilst she had been advised by the Complainant’s agent Ms. C that he would be submitting an offer, she had been instructed by her Vendor ‘not to present the offer until after another prospective purchaser’s viewing”. It seems that this appointment had been arranged prior to the Complainant’s visit and his discussions with the Vendor.

4.3 The Licensee has confirmed that she had advised the Complainant’s agent of this and once a second offer had been received she completed the multi offer proceedure in order for the offers from both parties to be presented to her Vendor.

4.4 The Complainant maintains that he was confused and under pressure in having to reassess the offer he had originally made, and as a result did not change or increase the offer for the purchase of the Property. The Licensee however advises that there was no time constraints mentioned regarding the return of the form. She points to the acknowledgement on the form that it was completed without influence or duress and notes that the Complainant had circuled

‘we’ on the declaration, “So it must be presumed that he read and understood it”.

4.5 The Complainant’s agent Ms. C was interviewed by the Authority’s investigator on 27 February

2014 and confirmed:

• She had been present when the Complainant had discussed purchasing the Property with the Vendor and that he had indicated to the Vendor that they were going to make an offer for the full price.

• Ms. C had drawn up a sales and purchase agreement for the Complainant that evening with a view to it being presented to the Vendor as soon as possible.

• When she had contacted the Licensee the following day, Ms. C was advised that a second party was to view the Property and that the Licensee had been told not to present the Complainant’s offer until the second party had viewed the Property.

• Ms. C had informed the Complainant of the situation but the Complaianant believed that he had completed a verbal agreement to purchase the Property and that this verbal agreement was binding between himself and the Vendor.

• She had attempted to outline to the Complainant the process should a multi offer situation occur and attempted to discuss with him the details around the original price he had offered however he declined to make any further increase in his price.

4.6 The Vendor provided a response to the Committee in relation to the circumstances around the

Complainant’s offer to purchase the Property. He advised the following:

• “Yes, I do recall meeting the Complainant. We arrived home as they were leaving a viewing, and he proceeded to ask a number of questions regarding the Property, such as where exactly the boundaries were, etc. He said that they were very keen on the Property and asked about whether we were willing to negotiate on our price. My response was that anything was negotiable, and that we would be happy to look at any offer that was put forward to us. His questions then turned to settlement dates and if we were flexible there (he specifically mentioned late January), and I gave him the same response, “yes, we are flexible and will look at anything that is proposed”. He asked if we would be happy to include my son’s bunk beds as his son (whom he was looking to purchase the house for) had a child who would love them. I told him that we would look at including any furniture for a price, as we were obviously moving overseas. While my answer to all of his queries regarding potential purchase was “yes”, this in no way constituted an agreement, and given that we had no formal offer, I was simply pleased that we obviously had someone who was potentially interested in the Property.”

• “Post his visit, (which was not with the Licensee) I received a call later that evening from the Licensee saying that they wished to make an offer. She was on her way back from holiday so could not present it that evening. I was aware that she was bringing a viewing through the following day, (we had agreed to this at the beginning of the week) and we were not able to meet with her prior to this due to family commitments, so I asked her to wait until she had brought the second client through and that way, if they were interested, I could look at both offers together.”

• “After the second viewing, the Licensee said that the lady she showed through also wished to make an offer, and explained that because of this situation, she was required to present both offers to us in sealed envelopes, and that it was then for us to determine what we wished to do.”

• “The Complainant’s offer was significantly worse than the offer that we accepted, and had numerous clauses and conditions attached, that given our impending departure meant that we declined their offer.”

• “I was made aware that the Complainant was unhappy with our decision and that he felt I was “underhanded” and that our agent was not acting in a professional manner. I can assure you that the Licensee was nothing but professional, and acted in line with all of the documentation we were provided regarding the sale of the Property. Prior to us leaving the country I sent an email to her and her manager, clarifying this, and that I was more than happy with her conduct given my instructions.”

• “While I understand that the Complainant may have been upset that he missed out on the Property, I can assure you that this was as a result of him submitting a very low, condition heavy offer including a settlement some 30 days after we would have left the country, and had he been the only submission, I would not have accepted on the terms he wanted.”

5. Decision

5.1 After conducting an inquiry into the complaint, pursuant to section 89(1) of the Real Estate

Agents Act 2008 (the Act), the Committee held a hearing with regard to that complaint. In accordance with section 90(1) of the Act, the Committee conducted the hearing on the papers, and pursuant to section 90(2) the Committee’s determination was made on the basis of the written material before it.

5.2 Having reviewed all the information and evidence supplied by all parties the Committee has determined that, based on information available to it, the Licensee had not acted in breach of the Act or the Rules and has therefore determined under section 80(2) of the Act to take no further action with regard to the complaint or any issue involved in the complaint.

6. Publication

6.1 One of the Committee’s functions pursuant to section 78(h) of the Act is to publish its decisions.

6.2 Publication gives effect the purpose of the Act of ensuring that the disciplinary process remains transparent, independent and effective. The Committee also regards publication of this decision as desirable for the purposes of setting standards and that it is in the public interest that the decision be published.

6.3 The Committee directs publication of its decision, but omitting the names and identifying details of the Complainant (including the address of the property), the Licensee and any third parties in the publication of its decision.

6.4 The Authority will publish the Committee’s decision after the period for filing an appeal has ended. Any application for an order preventing publication must be made to the Real Estate Agents Disciplinary Tribunal (the Tribunal).

7. Right of Appeal

7.1 A person affected by a determination of a Committee may appeal to the Tribunal against a determination of the Committee within 20 working days after the date of this notice.

7.2 Appeal is by way of written notice to the Tribunal. You should include a copy of this Notice with your Appeal.

7.3 Further information on filing an appeal is available by referring to the Guide to Filing an Appeal

at www.ju st ice. go vt .n z /t rib u nals .

Signed

Patrick Waite

Deputy Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 25 June 2014