Complaint No CB7150259 [2013] NZREAA 111 (18 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: CB7150259

In the Matter of Licensee

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 18 day of June 2013

Complaints Assessment Committee: CAC20005

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

Complaints Assessment Committee

Decision to take no further action

1. The Complaint and Material Facts

1.1 The Complainants have 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 salespersons license and is working for the Agency.

1.2 The Complainants purchased the Property. Settlement date was 3 September 2012. The Complainants did not receive all the keys for the P roperty from the Vendor that was due on settlement. There was a dispute over the condition of the Property and the Complainants’ lawyer withheld funds from settlement because of this.

1.3 The Complainants also say that the Vendors and the Licensee entered the Property three days after settlement without the Complainants’ permission.

1.4 The complaint was received by the Authority on 1 October 2012 and referred to a Complaints

Assessment Committee (the Committee). The Committee considered the complaint on 14 February

2013 and again on 31 May 2013 and now issues its decision in this matter.

2. Relevant Provisions

2.1 The Real Estate Agents Act 2008 establishes a statutory basis for the licensing and hearing of complaints against real estate agents, amongst other things. The Act provides for the setting up of Complaints Assessment Committees to hear the complaints and allegations about licensees. It also establishes a Disciplinary Tribunal to hear complaints at the next level.

2.2 Section 3 of the Act sets out the purpose of the Act.

3 Purpose of Act

(1) The purpose of this act is to promote and protect the interests of consumers in respect of transactions that relate to real estate and to promote public confidence in the performance of real estate agency work.

(2) The act achieves its purpose by –

a) Regulating agents, branch managers, and salespersons:

b) Raising industry standards:

c) Providing accountability through a disciplinary process is independent transparent and effective.

2.3 When committee considers a complaint it must decide whether it breaches the standards of conduct that are set out in section 72 and 73 of the act and also the Rules of Professional Conduct and Client Care as set out in the Real Estate Agents Act (Professio nal Conduct and Client Care) Rules

2012.

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.

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 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.

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

The Rules set out the standards of conduct and client care that agents, branch managers or salespersons (licensees) are required to meet when carrying out real estate agency work and dealing with clients. Whilst these rules are not meant to be exhaustive list, they set minimum standards that licensees must observe and are a reference point for d isciplinary decisions.

Examples of the Rules that may be relevant in this complaint are:

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

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

6.3 A licensee must not engage in any conduct likely to bring the industry into disrepute.

9.1 A licensee must act in the best interests of a client and act in accordance with the client ’s

instructions unless to do so would be contrary to law.

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

3. Discussion

3.1 There are two aspects to this complaint. The first relates to the handing over of the keys to the Property following settlement, and the allegation that the Licensee incorrectly held on to the keys when she was not entitled to do so.

3.2 The Licensee advises that on 3 September 2012 (the settlement day), the Vendor dropped off one key to the office of the Licensee and advised that the rest of the keys w ere left in the kitchen of the Property. It is the Licensee’s understanding that the Complainant advised his solicitor to settle but holdback $300 because the Complainant believed the house was not clean and tidy.

3.3 On 4 September 2012 the Complainant went to the Property but could not open the door using the key provided. The Complainant gained entry to the Property through an unlocked door and in doing so found that no keys had been left in the kitchen as previously advised. The Licensee says that on hearing about this she contacted the vendors who advised that in the interim they had gone to the Property and removed the keys because of the disput e.

3.4 On 6 September 2012 the Vendor delivered the remaining keys to the Licensee at the office. The Licensee says that she then called the Complainants’ solicitor and informed him that the remaining keys were in the office. She says that she asked them to communicate with the Vendor’s solicitor because she had been instructed by the vendor not to release the keys as they wanted the $300 owed from the Complainants to be paid first. The Licensee says that although she understood the Complainant was as a general rule entitled to the keys after settlement, the vendor’s instructions were not to release the keys without their permission. The Licensee says that she believed that she needed both solicitors to resolve the issue before the rest of the keys could be released and on 7

September 2012 following receipt of solicitors instructions the keys were released to the

Complainant.

3.4 As part of our investigation the Vendor ’s solicitor was contacted and the y advised that following the settlement of the sale on 3 September 2012 they sent written authority to the Licensee to release the keys to the purchaser and then followed up this with a further instruction on 7 September 2012.

3.5 They go on to say that on 5 September 2012 they had instructions from the cli ent that all keys had been passed to the agent and the garage had been cleaned to satisfy the Complainants’ requirements. On 6 September 2012 they say that the purchaser’s solicitor sent them an email advising that the Licensee was still refusing to release the keys. The say that on 7 September 2012 they sent another authority to the Licensee to release the keys. They advise they still not have received the $300 held back by the Complainants’ solicitor because the issue regarding the state of the Property on settlement had not been resolved.

3.6 In reaching a decision and making a finding the Committee has to look carefully at the evidence before it and then come to a decision based on its assessment of what we believe is more likely than not to have occurred or in other words on what we see as the balance of probabilities in this case.

3.7 This threshold has been considered by the Disciplinary Tribunal in its decision: Hodgson v CAC & Arnold [2011] READT03. In that decision the Disciplinary Tribunal said that the onus to establish a complaint rests with the complainant. The consequence of this is that unless we are able to form a view that what the complainant alleges is more likely than not what happened, or if we believe that the conduct complained of does not reach the threshold set out in section 72 of the act, we must dismiss the complaint.

3.8 Taking into account the onus on the Complainants to prove their complaint and produce evidence to the required threshold that the Licensee has acted improperly and after considering the evidence in this matter we find that there is not sufficient evidence to find that the Licensee has acted improperly. We believe that the Licensee got caught up in an unfortunate situation between the solicitors acting for the Purchaser and the Vendor, and the Vendors themselves over whether to release the keys or not, and due to this confusion and conflicting advice there was some delay in handing the keys over. We accept the Licensee’s explanation as to what occurred and although we accept the matter would have been very frustrating to the Complainants as purchaser of the Property we do not believe the conduct reaches the required standard to result in a finding of unsatisfactory conduct in this instance.

3.9 The second part of the complaint relates to the vendors and Licensee entering the Property three days after settlement without the Complainants’ permission. The Licensee’s explanation is that in doing so she was assisting the vendor who was required to go back to the Property to remove rubbish as part of their settlement obligations. The Licensee says that she had knocked on the door in the first instance to gain permission but there was no answer although the lights were on in the Property. She says that she did not enter the P roperty but stayed in the garden and was merely there to assist the Vendors and supervise the taking away of the rubbish.

3.10 We accept this explanation and under these circumstan ces do not find any fault with the conduct of the Licensee. We also agre e with the suggestion from the Vendor ’s solicitor that in requesting the Property be tidied up the Complainant was effectively consenting to the entering of the Property for this purpose.

3.11 As result of the above findings we have determined to take no further action on this complaint.

4. Decision

4.1 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.

4.2 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.

5. Publishing

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

5.2 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.

5.3 The Committee directs publication of its decision, but omitting the names and identifying details of the complainant (including the address of the property), the licens ee and any third parties in the publication of its decision.

5.4 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) .

6. Right of Appeal

6.1 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.

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

6.3 Further information on filing an appeal is available by referring to the Guide to Filing an Appeal at www.justice.govt.nz/tribunals.

Signed

Stuart Rose

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 18 June 2013