Company L - Complaint No CA4324494 [2011] NZREAA 267 (25 August 2011)

Last Updated: 3 August 2013

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

And

In the Matter of Complaint No: CA4324494

In the Matter of Company L

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 25th day of August 2011

Complaints Assessment Committee: CAC10068

Deputy Chairperson: Chris Rogers

Panel Member: David Russell

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 Company C (the Complainant) has complained to the Real Estate Authority (the Authority) about the conduct of Company L (the Licensee). The Licensee is a licensed agent under the Real Estate Agents Act 2008 (the Act).

1.2 The Complainant maintains that Ms L1, a licensed salesperson under the supervision of the Licensee, failed to obtain written approval for a conjunctional arrangement with the Complainant in order to introduce a prospective purchaser, being the licensee Ms L1 herself, to a sole agency listing (the property).

1.3 The Complainant believes that the failure of Ms L1 to disclose an interest in purchasing the property has placed the vendor of the property in a position where they may be required to pay two commissions.

1.4 The Complainant maintains that the Licensee failed to follow its own internal complaints procedure upon receiving a written complaint.

1.5 This complaint was received by the Authority on 10 February 2011 and referred to a Complaints

Assessment Committee (the Committee). The Committee considered the complaint on 16

March 2011 and made a decision pursuant to section 79(1) of the Act to inquire into the complaint.

2. Material Facts

2.1 On 3 September 2010 the Complainant entered into a sole agency listing agreement with Mr V (the vendor) for the sale of the property. The agency was set to expire on 3 December 2010.

2.2 Ms L1 visited an open home being conducted by the Complainant on 18 September 2010.

2.3 The sole agency agreement was cancelled by the vendor in writing on 4 December 2010 (received by the Complainant 9 December 2010).

2.4 The property was listed on 8 December 2010 for sale by auction with the Licensee.

2.5 Ms L1 and her partner purchased the property through the agency of the licensee prior to auction on 20 December 2010.

2.6 On 21 January 2011 the Complainant sent an email to the Licensee requesting payment of commission on the sale of the property and explaining the reasoning behind the request.

2.7 The Complainant included an invoice for $39,445 including GST, made out to the Licensee.

3. Relevant Provisions

3.1 A complaint can only be made in relation to alleged unsatisfactory conduct (section 72 of the

Act) or alleged misconduct (section 73 of the Act).

3.2 Section 72 of the Act provides:

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 or 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.

3.3 Section 73 of the Act provides:

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 willful 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.

3.4 Section 50 of the Act provides:

Salespersons must be supervised

(1) A salesperson must, in carrying out any agency work, be properly supervised and managed by an agent or a branch manager.

(2) In this section properly supervised and managed means that the agency work is carried out under such direction and control of either a branch manager or an agent as is sufficient to ensure—

(a) that the work is performed competently; and

(b) that the work complies with the requirements of this Act.

3.5 Section 4 of the Act provides:

Real estate agency work or agency work

(a) means any work done or services provided, in trade, on behalf of another person for the purpose of bringing about a transaction; and

(b) includes any work done by a branch manager or salesperson under the direction of, or on behalf of an agent to enable the agent to do the work or provide the services described in paragraph (a); but

(c) does not include—

(i) the provision of general advice or materials to assist owners to locate and negotiate with potential buyers; or

(ii) the publication of newspapers, journals, magazines, or websites that include advertisements for the sale or other disposal of any land or business; or

(iii) the broadcasting of television or radio programmes that include advertisements for the sale or other disposal of any land or business; or

(iv) the lending of money on mortgage or otherwise; or

(v) the provision of investment advice; or

(vi) the provision of conveyancing services within the meaning of the Lawyers and

Conveyancers Act 2006.

4. Discussion

4.1 The initial area of complaint is clearly about the right of the Complainant to claim a commission for the sale of the property to a purchaser introduced by the Complainant under the terms of a signed contract of agency with the vendor.

4.2 The second part of the complaint relates to the handling of a written complaint lodged with the

Licensee under the terms of their own complaints procedure.

4.3 The Complainant maintains that an email sent by them to the Licensee, outlining the circumstances surrounding Ms L1’s purchase of the property and including an invoice for commission, constituted a written complaint.

4.4 The Licensee believes that the correspondence and accompanying invoice were part of an ongoing exchange of communications between the parties over a dispute in regard to payment of a commission and did not constitute a complaint requiring initiation of the Licensee’s in house complaints procedure.

4.5 The Committee has been supplied with copies of relevant contracts of agency authority, completed sale and purchase agreements and other documents relating to the transactions in question and find that apart from the proposed aucton date in the auction authority reading 16

February ‘2010’ instead of ‘2011’, all documentation is in order and consistent with the

requirements of the Act.

4.6 The Committee is satisfied that the complaint regarding payment of commission centres on conduct and actions outside of real estate work as defined by section 4 of the Act and therefore can not be considered under the provisions of section 72 of the Act.

4.7 The Committee is satisfied that no evidence has been provided to show that any conduct on the part of the Licensee would reach the threshold of misconduct under section 73 of the Act.

4.8 The Committee is satisfied that the Licensee has not breached any obligations imposed by section 50 of the Act.

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 The Committee has determined under section 89(2)(c) 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 lodging an appeal is available by referring to the Guide to Lodging an

Appeal at www.justice.govt.nz/tribunals.

Signed

Chris Rogers

Deputy Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 25 August 2011