Complaint No CB7040711 [2013] NZREAA 108 (17 June 2013)

Last Updated: 3 May 2014

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

And

In the Matter of Complaint No: CB7040711

In the Matter of Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 17th day of June 2013

Complaints Assessment Committee: CAC20008

Chairperson: Graham Rossiter

Deputy Chairperson: Ellen Ryan

Panel Member: Joan Harnett-Kindley

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 The Complainant has complained to the Real Estate Agents Authority (the Authority) about the conduct of the Licensee. The Licensee is licensed under the Real Estate Agents Act 2008 (the Act). She holds a salesperson’s licence and is working for the Agency.

1.2 The Complainant had an ‘interest’ (as a possible buyer) in a property in respect of which the Licensee was the selling and listing agent. The prospective purchaser says that he “was not given an opportunity to submit an offer” for the subject property. In this regard, it is contended that the Licensee failed to give the Complainant a ‘courtesy call’ informing him of the submission of an offer to the vendor prior to a scheduled auction, which was ultimately cancelled.

2. Material Facts

2.1 The subject property was listed with the Licensee in December 2011. There was apparently little initial interest. A decision was made by the vendor to sell the property by auction on 6 July

2012. This, i.e. the intention to sell by auction, was appropriately advertised.

2.2 Over the course of June 2012, a series of open homes were held. On 1 July 2012, a verbal offer was received by the Licensee from the ultimate purchasers. The following day, 2 July 2012, the Complainant (at 4.30 pm) contacted the Licensee to arrange access to the property. The Complainant, at this time, informed the Licensee of his intention to attend the auction.

2.3 At 6pm on 2 July 2012, the Licensee was contacted again by the eventual purchasers. They wished to submit a formal written offer prior to the auction. An hour later, the Licensee says that she telephoned the Complainant and left a message on his voicemail about an offer having been received for the property.

2.4 The following day, 3 July 2012, the Licensee presented the written offer to the vendor. There was some negotiation as to price but on this date (at 10 pm), the vendor advised acceptance of the offer that had been submitted.

2.5 A sale and purchase agreement for the property was signed on 4 July 2012. Cancellation of the planned auction was advertised on 5 July 2012.

3. Relevant Provisions

3.1 The relevant law is the definition of ‘unsatisfactory conduct’ in section 72 of the Real Estate

Agents Act 2008.

3.2 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 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 In addition, consideration is required to be given to rule 5.1 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009. Rule 5.1 provides that “a licensee must exercise skill, care, competence and diligence at all times when carrying out real estate agency work.” The duty of care provided for in rule 5.1 extends to clients, customers and potential customers, including those who have expressed an interest in a property.

4. Discussion

4.1 An initial observation is that, quite apart from whatever is the Complaints Assessment Committee’s (the Committee) final determination of this complaint (see below), it has been properly brought. The obvious sense of grievance on the part of this Complainant, who had a legitimate bona fide interest in this property, which was sold prior to an auction in circumstances in which he was unaware of the ultimately successful pre-auction offer, is understandable.

4.2 As a general proposition, a salesperson licensee has a duty to his or her vendor and putative purchasers in the market place to inform someone who has expressed an interest in a property that a) an offer has been submitted, b) those with a serious interest should submit an offer if they wish their interest to be considered by the vendor, and c) if the vendor considers an offer submitted before the auction to be acceptable, the property will be withdrawn from auction. We do not understand the Licensee to have any quarrel with the foregoing.

4.3 If a salesperson fails to inform prospective purchasers of the things referred to in paragraph 4.2 above, then arguably (or even almost certainly) a breach has occurred of rule 5.1. The issue here is whether the Licensee did take reasonable steps to inform the Complainant of the fact of the offer received and the prospect of the subject property being withdrawn from auction.

4.4 Further to paragraph 4.3 above, the Committee’s determination of this complaint comes down to its assessment of a single question of pure fact, i.e. did the Licensee make a telephone call to what she believed to be the Complainant’s cell number on 2 July 2012 at 7 pm and purport to leave a message on that person’s voicemail, or did she not. We say “purport” because it is clear that if the Licensee did make a call at that time it was not made to the Complainant. Again, the Committee says ‘if’ the call was made, it was to a wrong number and there was a message left on the voicemail of some unidentified person who obviously had absolutely nothing to do with this matter whatever and would, in due course, have found a strange and inexplicable message on his or her voicemail.

4.5 The Complainant says he does not accept that the Licensee did make a telephone call, intended for him, on 2 July 2012. He argues that if the Complainant encountered voicemail, she would or should have realised that she had rung the wrong number. This may be so, but the Committee is entitled to take judicial notice, we think, of the fact that a number of voicemail systems will not

have an audio message from the account holder but simply an automated direction to the cal ler to leave a message.

4.6 If the Licensee did not make a telephone call intended for the Complainant, then she has been untruthful in the response to the complaint she has given the Authority. We do not discount this possibility but have to ask how likely this is or what reason she would have had not to make a telephone call. It would, quite obviously, have been in the Licensee’s own self-interest to have obtained the highest and best offer possible for her vendor client and that would have meant canvassing and submitting any and all offers in the market. Human error can happen in the making of a telephone call to a wrong number and this elementary point has to be acknowledged.

4.7 On balance, the Committee finds itself unable to be satisfied that the Licensee did not make the telephone call referred to above. The Licensee acknowledges that, in these circumstances, there should have been a follow-up call to the Complainant on 3 July 2012. However, we cannot conclude that the omission to do this meant that the Licensee’s actions, when looked at in the round, crossed the line to become ‘unsatisfactory conduct.’ The agent has apologised to the Complainant. The unhappiness and disappointment of the Complainant is, we reiterate, understandable. However, the apology he has received should be the end of this matter.

4.8 As something of a footnote to this decision, the investigator’s information gathering disclosed the fact that the Licensee had released keys for the subject property to the Complainant, without, that is to say, either the salesperson or anyone else in her firm being present when the Complainant went into this house. That was clearly quite inappropriate. The Licensee acknowledges this and she has been, quite properly in our view, reprimanded by her principal.

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 to 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.justice.govt.nz/tribunals.

Signed

Graham Rossiter

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 17 June 2013