Kloppers - Complaint No CA5358657 [2012] NZREAA 86 (21 March 2012)

Last Updated: 3 January 2014

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

And

In the Matter of Complaint No: CA5358657

In the Matter of Sidney ‘Ben’ Kloppers

Licence Number: 10003452

Decision of Complaints Assessment Committee

Dated this 21st day of March 2012

Complaints Assessment Committee: CAC20005

Chairperson: Chris Rogers Deputy Chairperson: Stuart Rose Panel Member: Denise Bovaird

Complaints Assessment Committee

Decision finding unsatisfactory conduct

1. The Complaint

1.1. The Complainant has complained to the Real Estate Agents Authority (the Authority) about the conduct of Sidney ‘Ben’ Kloppers (the Licensee). The Licensee was, at the time of the alleged conduct, employed as a real estate salesperson with Mackys Real Estate Limited Warkworth, a franchise office of The Bayleys Real Estate Group (Bayleys).

1.2. The Complainant has conveyed various concerns over the conduct of the Licensee when approaching the Complainant to list and sell his home (the property).

1.3. The Complainant maintains that:

 I did not ask this agent (the Licensee) to sell my property.

 He (the Licensee) ignored the fact that a sole agency was in place.

 He (the Licensee) did not present a listing guide.

• He (the Licensee) did not present an agreement guide when asking me to sign a sale agreement.

 He (the Licensee) did not list my property before a sale agreement was in place.

 He (the Licensee) was working for Mrs X (the purchaser) not me.

• He (the Licensee) did not disclose that I would pay his commission until the agreement (was) signed.

 He (the Licensee) would not back off when asked to.

1.4. The complaint was received by the Authority on 8 July 2011 and referred to a Complaints

Assessment Committee (the Committee). The Committee considered the complaint on 3 August

2011 and received and considered an investigation report on 26 January 2012.

2. Material Facts

2.1. On 28 March 2011 the Complainant signed a sole agency marketing agreement with Agency 1 to sell the property by way of auction. The agency was to be in place until 26 June 2011.

2.2. Approximately one hour after signing the agency agreement with Agency 1, the Complainant had a visit from the Licensee and a colleague from Bayleys, at which time the Complainant maintains he was presented with an offer to purchase the property.

2.3. The offer presented by the Licensee was for the sum of $700,000, subject to the purchasers inspecting and approving the condition of the interior of the property by 8 April 2011. The Complainant maintains that he refused to consider the offer because it was too low.

2.4. The Complainant maintains that the Licensee then asked him what figure he would accept for the property and a discussion took place.

2.5. The Complainant maintains that he then showed the Licensee a copy of the listing agreement signed that day with Agency 1 and was advised by the Licensee to cancel that authority by email correspondence.

2.6. The Complainant maintains that the Licensee then departed to return later the same day with an amended offer from the same party for $780,000, still subject to inspection.

2.7. The offer was accepted and the contract signed by the Complainant.

2.8. The Complainant maintains that after signing the contract for sale and purchase he was presented with a Bayleys listing form and asked to authorise it, which he did.

2.9. The Complainant concedes to having a discussion with the Licensee over the level of commission due to Bayleys if the sale proceeded. However, the Complainant maintains that he did so under the assumption that the purchaser had employed the Licensee and would be responsible for any fee payable.

2.10. The Licensee maintains that the Bayleys listing authority was signed by the Complainant prior to presentation of the offer to purchase and that it was not until after both contracts had been signed that the Complainant mentioned having earlier signed a listing authority with Agency 1.

2.11. The Complainant maintains that the Licensee failed to provide an Agency Agreement Guide or a

Sale and Purchase Agreement Guide prior to being asked to sign either contract.

2.12. The Licensee maintains that his colleague made both guides available to the Complainant before presenting any contracts for signature and that the Complainant declared that he was already in the possession of a guide provided by Agency 1 earlier in the day.

2.13. The Licensee maintains that the guide already in the Complainant’s possession was used to facilitate a discussion over the process for cancellation of the Agency 1 listing under the cooling down provision. (The Real Estate Agents Act 2008 (the Act) section 130 ‘Client may cancel sole agency agreement by 5 pm next working day’)

2.14. The Licensee does not recall leaving any guides with the Complainant.

2.15. The Licensee made contact with the solicitor acting for the Complainant to advise him of the

Complainant’s wish to cancel the Agency 1 listing authority.

2.16. The Complainant visited his solicitor on 29 March 2011 and a notice was faxed to Agency 1 in cancellation of their listing authority.

2.17. The Complainant maintains that he was not happy to be liable for a commission to Bayleys and subsequently refused the purchasers access to the property in order to satisfy their condition. After various discussions, the purchasers did inspect the property and the contract for sale and purchase was subsequently cancelled.

2.18. The property was relisted with Agency 1 and sold some time later for $820,000.

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. The Real Estate Agents Act 2008

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 127 of the Act provides:

127 Approved guide to be provided before agency agreement for residential property signed

(1) An agent must not enter into an agency agreement with a person for the sale of residential property unless the agent or a Licensee on the agent’s behalf—

(a) has provided the person with a copy of the approved guide before the agreement is signed by or on behalf of the person; and

(b) has received a signed acknowledgment from the person that the person has been given the approved guide.

(2) In this section—

approved guide means a guide that—

(a) is about the sale of residential property:

(b) has been approved by the Authority for the purposes of this section residential property does not include any property that—

(a) has been developed with other properties in a continuous area; and

(b) is proposed to be sold or otherwise disposed of by a vendor who also proposes to sell or otherwise dispose of, or who has sold or otherwise disposed of, some or all of those other properties.

(3) A contravention of this section does not affect the validity of the agency agreement.

3.5. Section 133 of the Act provides:

133 Approved guide to be provided when contractual document provided

(1) An agent must ensure that subsection (2) is complied with before a person signs a contractual document if the contractual document—

(a) relates to the proposed sale of a residential property in respect of which the agent is carrying out real estate work; and

(b) was provided to the person by the agent or by a Licensee on behalf of the agent.

(2) The agent or a Licensee on the agent’s behalf must have—

(a) provided the person with a copy of the approved guide; and

(b) received a signed acknowledgment from the person that the client has been given the approved guide.

(3) In this section— approved guide means a guide that—

(a) is about the sale of residential property:

(b) has been approved by the Authority for the purposes of this section. (4) A contravention of this section does not affect the validity of any contract.

3.6. Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009 (the Rules)

Rule 5.1 A Licensee must exercise skill, care, competence, and diligence at all times when carrying out real estate agency work.

Rule 5.2 A Licensee must have a sound knowledge of the Act, regulations made pursuant to the Act, rules issued by the Authority (including these rules) and other legislation relevant to real estate agency work.

Rule 9.5 An appraisal of land or a business must be provided in writing to a client by a Licensee; must realistically reflect current market conditions; and must be supported by comparable information on sales of similar land in similar locations or businesses.

Rule 9.9 When inviting signature of an agency agreement or a sale and purchase agreement, or other contractual document, a Licensee must ensure that a prospective client, client, and/or customer is aware that he or she can, and may need to, seek legal, technical, or other advice and information, and allow the prospective client, client, and/or customer a reasonable opportunity to do so.

Rule 9.11 A Licensee must not invite a prospective client to sign a sole agency agreement without informing the prospective client that if he or she enters into or has already entered into other agency agreements, he or she could be liable to pay full commission to more than 1 agent in the event that a transaction is concluded.

Rule 9.15 Unless authorised by a client, through an agency agreement, a Licensee must not offer or market any land or business, including by putting details on any website or by placing a sign on the property.

4. Discussion

4.1. Evidence and statements from both parties to this complaint have been somewhat conflicting regarding the timing of events and actions taking place on 28 March 2011.

4.2. The Complainant maintains that the Licensee approached him without request and presented an agreement for sale and purchase prior to asking the Complainant to sign an agency contract.

4.3. The Licensee maintains that the Complainant had given his colleague an open invitation to call and because the Complainant was hard of hearing and not able to identify incoming phone calls, the Licensee and his colleague had made a decision to speak with the Complainant directly.

4.4. The Licensee maintains that an agency agreement was discussed and signed prior to the

Complainant being asked to consider the offer to purchase.

4.5. Both the agency agreement and the sale and purchase agreement bear the same date and on the evidence provided, the Committee is unable to definitively determine the timing of signatures.

4.6. What is clear, however, is that the Licensee has offered the property to prospective purchasers and drafted an offer on their behalf to purchase the property without the written authority of the Complainant. This is in breach of rule 9.15 of the Rules.

4.7. The Licensee has failed to provide a written appraisal of the property in support of an estimate of commission included in the Bayleys Agency Authority. This is required by rules 9.5 and 9.8 of the Rules.

4.8. The Licensee has failed to advise the Complainant that he was able to, and may have needed to, seek legal or other particular advice before signing an agency or sale and purchase agreement. This is in breach of rule 9.9 of the Rules.

4.9. The Licensee evidently did not consider the implications of an existing agency agreement and has made assumptions regarding the effect of cancellation under section 130 of the Act where it relates to work already carried out. The Licensee has failed to advise the Complainant that he could be liable to pay two commissions, having already signed an agency agreement with another agent. This is in breach of rule 9.11 of the Rules.

4.10. Although both the Bayleys agency agreement and the sale and purchase agreement signed by the Complainant acknowledge receipt of the relevant approved information guides, the Licensee conceded to referring only to a guide to the sale of residential property provided to the Complainant by another agency and was unable to recall leaving a guide to sale and purchase agreements with the Complainant. This is required by sections 127 and 133 of the Act.

5. Decision

5.1. The Committee has determined under section 89(2)(b) of the Act that is has been proved, on the balance of probabilities, that Sidney ‘Ben’ Kloppers has engaged in unsatisfactory conduct as per the provisions of section 72 of the Act.

5.2. Particular breaches have been clearly identified in 4.6 through 4.10 above.

6. Orders

6.1. The Committee will conduct a separate hearing on the papers to decide what orders, if any, should be made under section 93 of the Act.

Section 93 provides:

93 Power of Committee to make orders

(1) If a Committee makes a determination under section 89(2)(b), the Committee may do 1 or more of the following:

(a) make an order censuring or reprimanding the Licensee;

(b) order that all or some of the terms of an agreed settlement between the Licensee and the Complainant are to have effect, by consent, as all or part of a final determination of the complaint;

(c) order that the Licensee apologise to the Complainant; (d) order that the Licensee undergo training or education;

(e) order the Licensee to reduce, cancel, or refund fees charged for work where that

work is the subject of the complaint; (f) order the Licensee:

(i) to rectify, at his or her or its own expense, any error or omission; or

(ii) where it is not practicable to rectify the error or omission, to take steps to provide, at his or her or its own expense, relief, in whole or in part, from the consequences of the error or omission;

(g) order the Licensee to pay to the Authority a fine not exceeding $10,000 in the case

of an individual or $20,000 in the case of a company;

(h) order the Licensee, or the agent for whom the person complained about works, to make his or her business available for inspection or take advice in relation to management from persons specified in the order;

(i) order the Licensee to pay the Complainant any costs or expenses incurred in respect

of the inquiry, investigation, or hearing by the Committee.

(2) An order under this section may be made on and subject to any terms and conditions that the Committee thinks fit.

6.2. The Committee requires the Case Manager to obtain a record of any previous disciplinary decision in respect of the Licensee under either the Real Estate Agents Act 1976 or the Act, if any such decision exists, and provide it to the Committee, the Licensee and the Complainant.

6.3. The Licensee and the Complainant may file submissions on what orders, if any should be made. The Complainant may file submissions within 10 working days from the date of the decision. These submissions, if any, will then be provided to the Licensee, with a timeframe for filing final submissions.

7. Publication

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

7.2. The Committee has deferred making any decision on publication until its hearing to decide what orders, if any, should be made.

8. Right of Appeal

8.1. A person affected by a determination of a Complaints Assessment Committee may appeal by way of written notice to the Real Estate Agents Disciplinary Tribunal (the Tribunal) against a determination of the Committee and must do so within 20 working days from the date of the determination.

8.2. The Committee has yet to finally determine this complaint because the parties are being given an opportunity to make submissions on orders before the Committee determines what orders should be made, if any.

8.3. The Committee considers that the 20 working day appeal period does not commence until it has finally determined this complaint by deciding what orders should be made, if any.

8.4. Appeal is by way of written notice to the Tribunal. Further information on filing an appeal is available by referring to the Guide to Filing an Appeal at www.justice.govt.nz/tribunals.

Signed

Chris Rogers

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 21 March 2012