P - Complaint No: CA2864208 [2010] NZREAA 99 (15 September 2010)

Last Updated: 4 August 2012

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

And

In the Matter of Complaint No: CA2864208

In the Matter of Mr P

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

_{Dated this 15}th _{day of September 2010}

Complaints Assessment Committee: CAC 10033

Chairperson: Patrick Waite

Deputy Chairperson: Peter McDermott

Complaints Assessment Committee - Decision to take no further action

The Complaint

The Authority received a complaint dated 26 February 2010 from Mr T concerning Licensee Mr P in regard to the charging of sales commission on two sales transactions for the same property.

Material Facts

The Complainant listed his property for sale with the Licensee on 1 March 2009. On 23 September

2009 a sales and purchase agreement was executed which became unconditional on 2 October

2009. On settlement date the purchasers were not able to complete the purchase.

Despite significant effort by the sales agent from the Licensee’s firm to assist the purchaser to arrange finance and the Complainant agreeing to weekly extensions, the contract came to an unsuccessful end on 29 January 2009. The unsuccessful purchaser forfeited their deposit of

$26,600 from which commission of $9,000 (which was a reduction on the firm’s normal commission rate) was paid to the Licensee’s firm and the balance of $17,600 was paid to the Complainant.

Following the collapse of the sale it was agreed to take the property to auction on 2 March 2010. On 7 February 2010 however a sales agent from the Licensee’s firm received an offer for the property which the Complainant accepted. On settlement, commission on the successful sale was paid to the Licensee’s firm.

Relevant Provisions

The CAC examined the information supplied by the Complainant both in his written complaint and subsequent comments to the Licensee’s response to determine whether S72 or S73 of the Real Estate Agents Act 2008 applied i.e. was there evidence which would indicate that the Licensee could be considered guilty of unsatisfactory conduct (S72) or misconduct (S73).

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.

Discussion

In the words of the Complainant the issue for him relates to “charging two lots of commission over one reduce sale, over a short time period.” He is critical of the sales agent of the Licensee involved in that within 2 weeks from the conclusion of the first (unsuccessful) sale she had found another buyer at a price $9,500 less than the earlier sale. It was on this basis that he again sought a reduction in the sales commission which was declined. The Licensee has advised that whilst the successful purchaser had indeed been viewing the property earlier he had not been able to make an offer because he was waiting for a settlement of his own property and a matrimonial settlement. He noted that the purchaser had been working with the agent and other sales people within the firm for over a year.

Whilst we can understand the Complainant’s concerns we note that he received $17,600 from the deposit paid by the unsuccessful purchaser which if added to the sale price of $256,500 resulted in the Complainant receiving from the sale a total price of $274,600 which is $8,600 more than the first price the property was sold at.

The question of the amount and circumstances in which commission is payable is established within the Residential Listing Authority which provides for commission to be paid when “any agent under this authority has introduced the purchaser to the property during the period of this agency and that contract becomes unconditional and binding on the parties, whether during or after the period of the agency then we agree to pay you commission....” On this basis unless the Listing Authority has been amended to remove this entitlement of the Licensee, he/she is entitled to charge commission even though the sale did not proceed because he/she had achieved an unconditional and binding contract. Equally he/she is entitled to charge a commission on completion of a successive unconditional and binding contract.

Decision

In terms of the Residential Listing Authority the Licensee is entitled to charge commission on both transactions as described in the complaint i.e. on the first sale even though it did not settle, and, on the second successful sale. Whilst it is recognized that the Complainant has incurred additional costs through payment of two commissions, legal costs etc. these have been off-set by the share of the deposit he received from the unsuccessful purchaser.

The CAC panel concluded that the Licensee was not in breach of the Real Estate Agents Act 2008 and therefore no further action will be taken with this complaint.

Publication

The Committee directs that this decision is to be published with the identifying information of each of the parties removed from the decision.

Right of Appeal

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

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

Further information on lodging an appeal is available by referring to the Guide to Lodging an

_{Appeal at www.justice.govt.nz/tribunals.}

Signed

Patrick Waite

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 15 September 2010