Complaint No C00249 [2013] NZREAA 120 (25 June 2013)

Last Updated: 4 May 2014

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

And

In the Matter of Complaint No: C00249

In the Matter of Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 25th day of June 2013

Complaints Assessment Committee: CAC20002

Chairperson: Deirdre McNabb

Panel Member: Barrie Barnes

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. The Complainant has lodged a complaint with the Real Estate Agents Authority (the Authority) about the conduct of the Licensee who is licensed under the Real Estate Agents Act 2008 (the Act). He holds a salesperson license and works for the Agency.

1.2. The complaint is that the Licensee:

• Pressured the Complainant to settle early on the sale of his property so that renovations on the property could commence early.
  

• Was required to incur additional expe nse from this pressure, namely additional legal fees of

$200.

• Was not acting in his personal capacity when he was party to the agreement to purchase the

Property.

1.3. The Authority referred the complaint to the Complaints Assessment Committee (the

Committee). Pursuant to section 79(1) of the Act, the Committee considered the complaint on

11 December 2012 and made a decision to inquire into it further. The Committee invited the

Licensee to provide a response to the complaint.

1.4. Having satisfied itself that it had completed its inquiry into the complaint, the matter was considered again by the Committee on 4 June 2013.

1.5. The hearing was conducted on the papers pursuant to section 90(2) of the Act and the

Committee made its determination on the basis of the written material before it.

2. Material Facts

2.1. By an agreement dated 25 August 2012 the Licensee offered to purchase the Property. Under that agreement the vacant possession and settlement dates were set for 12 October 2012. The Property was tenanted prior to the settlement date and so the tenants were required to move out of the Property in time for that date in order that vacant possession could be given.

2.2. When the complaint was initially received by the Authority it was assessed that the Authority was unable to take any action because the conduct was outside of its jurisdiction. This was on the basis that the Licensee was acting in his personal capacity as a private purchaser and therefore was not engaging in real estate agency work in terms of the Act. The Complainant challenged this conclusion and alleged that the Licensee was acting in his professional rather than personal capacity. The Committee decided to inquire into the conduct further.

2.3. The Licensee was invited to respond to the Complainant ’s allegations. He states:

• He was not acting as a real estate agent when he entered into the transaction to purchase the Property.

• He purchased the Property for himself through the agency that had the listing, not for the company that employs him.

• He specifically disclosed that he was a real estate agent by including this description in the special conditions on the agreement.

• The Licensee was contacted by the tenant ’s partner on 7 October 2012 advising that he

had arranged alternative accommodation but that it could not be taken up until 15

October 2012. The Licensee indicated that he was prepared to allow the tenant to stay until 15 October 2012 but that settlement would need to be deferred until then because he required vacant possession.

• The Licensee was purchasing the Property with a friend who was in the country for a limited time period. It was intended that the Property be renovated immediately following settlement.

• The Licensee advised the listing agent that he was prepared to fit in with the tenant ’s requirements but sought access to enable renovations to commence prior to settlement. At this point the Complainant made contact directly with the Licensee and indicated that he would require settlement to be on 12 October 2012 as provided for in the contract. The Licensee explained the tenant ’s request and the Complainant allegedly told him that if he had made arrangements with the tenants that was up to him but the Complainant would contact his solicitor.

• The Complainant settled on 12 October 2012, as per the contract, and allowed the tenant to remain on until 15 October 2012 rent free to accommodate the tenant ’s needs.

2.4. The listing agent, has confirmed to the Authority that he did not deal directly with the Licensee but that he was aware that he was a real estate agent and understood him to be acting in his private capacity when he purchased the Property.

2.5. The sales agent who negotiated the transaction was Ms S. Ms S has stated that she understood the Licensee was not acting as a real estate agent in this transaction. She noted that the Licensee did not receive any commission in respect of the sale.

2.6. F inally, the person who bought the Property with the Licensee was Mr and Mrs H. Mr H has confirmed to Authority investigators that:

• When he purchased the Property the Licensee was not acting as his agent, rather he was his business partner and they bought the Property together. They have bought severa l properties together in the past.

• The Licensee and Mr and Mrs H were 50/50 partners in the Property purchase.

• The Licensee did not receive any commission in respect of the purchase. He was not the agent for the purchase that was Ms S.

3. Relevant Provisions

3.1. The Committee examined the information supplied by th e parties to determine whether section

72 or section 73 of the Real Estate Agents Act 2008 (the Act) applied , i.e. was there evidence

which would indicate that the Licensee could be considered guilty of unsatisfactory conduct

(Section 72) or misconduct (Section 73).

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.

Section 134 Contracts for acquisition by licensee or related person may be cancelled

(1) No licensee may, without the consent of the client for whom he or she carries out real estate agency work in respect of a transaction, directly or indirectly, whether by himself or herself or through any partner, sub -agent, or nominee, acquire the land or business to which the transaction relates or any legal or beneficial interest in that land or business.

Section 136 Disclosure of other benefits that licensee stands to gain from transaction

(1) A licensee who carries out real estate agency work in respect of a transaction must disclose in writing to every prospective party to t he transaction whether or not the licensee, or any person related to the licensee, may benefit financially from the transaction.

Section 4 Interpretation - real estate agency work

(a) Means any work done or services provided, in trade, on beh alf of another person for the purposes of bringing about a transaction.

4. Discussion

4.1. The Committee noted from the complaint lodged on behalf of the Complainant that the Complainant believed that the Licensee was not acting in his personal capacity when he purchased the Property. The Licensee states that he was making the purchase in his private capacity as a part owner with a friend.

4.2. The Committee has considered the position taken by each of the parties. It has also considered the information provided by the listing agent and her supervising agent and the business partner with whom the Licensee bought the Property. The Committee is of the view that, whilst the Licensee is a real estate agent (which he declared as a condition of the agreement) , when entering into this agreement to purchase he was acting in his private capacity as a co -owner of property with Mr and Mrs H.

4.3. In making this finding the Committee noted that the Licensee received no financial gain by way of commission from the transaction and that he entered into the transaction through the listing agency rather than through the agency that employs him. The Licensees have confirmed their understanding that the Licensee was acting in his private capacity when making this purchase.

4.4. The Committee considered whether the Licensee was engaged in real estate agency work in terms of the Act. It noted that it was clear from the time when the agreement was signed that the Licensee purchaser was a real estate agent but the evidence provided to the Committee shows that his only involvement in this transaction was as a private purchaser. The Licensee had no part in negotiating the sale of the Property on behalf of the Vendor and he received no commission on the sale. The Committee is of the view that the Licensee was not engaged in real estate agency work within the meaning of the Act at any stage throughout this transaction. Neither the Licensee nor the real estate company that he works for had a listing for the sale of the Property.

4.5. In relation to the allegation of undue pressure being put upon the Complainant with the Licensee trying to change the settlement date, the Committee found that the suggestion of changing the settlement date as made by the Licensee was a reasonable and no t unusual request made by the Licensee. The request appeared to be for the benefit of the Complainant ’s tenant rather than the Licensee. In fact settlement took place on the contractual date and the Licensee was the main party inconvenienced by his accommo dation of the tenant ’s requirements. Accordingly the Committee does not find that there is evidence to conclude that undue pressure was brought to bear on the Complainant by the Licensee.

4.6. The Committee does not consider that the Licensee was carrying out real estate agency work when he entered into the agreement to purchase the Property. It takes the view that the Licensee offered to purchase the Property in his capacity as a private purchaser and that there has been no improper treatment of the vendor Com plainant by the Licensee.

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 concluded that the Licensee was not carrying out real est ate agency work in respect of the property and that he offered to purchase it in his private capacity. It has concluded that the Licensee cannot be considered guilty of unsatisfactory conduct in terms of section 72 or misconduct in terms of section 73. Accordingly 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 licen see 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 unless an application for an order preventing publication has been made to the Real Estate Agents Disciplinary Tribunal (Tribunal). Such an application can only be made as part of an appeal to that Tribunal. In order to ensure publication of the decision does not take place it is important that you serve a copy of your application on the Authorit y. Publication of the decision will not take place until the Tribunal has made a decision on the application.

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 withi n 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 F iling an Appeal

at www.justice.govt.nz/tribunals.

Signed

Deirdre McNabb

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 25th June 2013