Complaint No CB7174676 [2013] NZREAA 122 (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 Numbers: CB7174676 and CB7199993

In the Matter of Licensee and Principal

Licence Number: XXXXXXXX and XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 25th day of June 2013

Complaints Assessment Committee: CAC20008

Chairperson: Graham Rossiter

Deputy Chairperson: Ellen Ryan

Panel Member: Joan Harnett-K indley

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 and the Principal. Both Licensees are licensed under the Real Estate Agents Act 2008 (the Act). The Licensee holds a salesperson’s licence and the Principal holds an agent licence. Both work for the Agency.

1.2 The Licensee is alleged to have breached certain obligations to the Vendor. The Complainant is neither the Vendor nor a friend or relative of the Vendor. He is, rather, a friend of the Vendor’s son.

1.3 Discerning the essence or substance of the complai nt is somewhat problematic. However, the Complainant appears to allege a) errors or deficiencies on the part of the Licensee regarding the listing, appraisal and marketing of the subject property but, perhaps more importantly [we here paraphrase with respect to what follows], b) pressure or inappropriate influence on the Vendor to sell and c) taking advantage of a Vendor with impaired capacity, or to use the language of the Complainant: “highly questionable mental acuity and mental condition.”

1.4 Contextually, there is a family trust which has an int erest in this property. The Vendor is a trustee of this trust and her son, a beneficiary. The son also holds a power of attorney from the Vendor.

2. Material Facts

2.1 On 10 March 2012, the Vendor signed a listing authority submitted by the Licensee. Marketing of the subject property was begun that day. Offers were received in May 2012 and the property was sold on 30 July 2012.

2.2 An appraisal of the property was provided to the vendor at the time of listing. This compared the subject property with five similar properties that had recently sold in the district in question. The Licensee also took into account other factors such as contour, access and the general demand for land in the relative part of the region where this land was located. The property was appraised as being worth between $350,000.00 and $370,000.00. It was sold for $350,000.00.

2.3 The property was advertised in the normal advertising mediums and on a number of key websites. The Vendor defaulted, i.e. did not vacate the property and place her solicitor in a position to transfer title to the purchasers. As a result, proceedings have been commenced in the High Court by the purchasers alle ging breach of contract by the Vendor.

2.4 The complaint was received by the Authority in December 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 c onduct 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 may be required of rules 9.1, 9.2 and 9.3 of the Real Estate Agents Ac t (Professional Conduct and Client Care) Rules 2009. Rule 9.1 requires licensees to act “in the best interests of a client.” Rule 9.2 states that a “licensee must not engage in any conduct that would put a client...under undue or unfair pressure.” F inally, Rule 9.3 provides that a licensee must not take advantage of a client ’s ...inability to understand relevant documents, where such inability is readily apparent.”

4. Discussion

4.1 The complaint in so far as it relates to the ‘mechanics ’, so to speak, of the selling process itself may be dealt with in relatively short order. The marketing /advertising of the property was as described above and would appear to have been, from the regulatory view of this Authority , unremarkable. The same can be said for the listing itself. The appraisal, on the basis of the evidence available, was carried out in a realistic manner using the normal measures and comparisons expected of a real estate agent, plus the particular salesperson’s knowledge of the area in which she ‘sells’ properties on behalf of Vendors.

4.2 The related aspects of the complaint in which it is contended that the Licensee pressured the Vendor or took advantage of someone with impaired capacity are obviously very serious indeed. We will deal with each of these issues in turn. As regards the matter of suggested ‘pressure,’ the difficulty for the Licensee in responding to this allegation, as also for the Complaints Assessment Committee (the Committee) in dealing with it, is the conspicuous absence of any evidence to support this contention. The Licensee arranged the listing with the Vendor in a manner that seems entirely orthodox and conventional. There was an initial telephone contact with the Vendor. The listing and appraisal process was full y explained. The Licensee pro-actively contacted the Vendor’s lawyer. Marketing of the property proceeded in the manner set out above. We find that there is really nothing from which ‘pressure’ by the Licensee on the Vendor may be inferred.

4.3 The remaining, if also, important issue is that relating to the al leged impaired capacity of the Vendor. This contention is based on two things, i.e. a) the Vendor’s age (88 years) and b) a medical certificate that says she has “mild” memory impairment. As re gards the first point, an agent should, the Committee entirely accepts, be appropriately alert to any capacity issues when dealing with a very young or old client. However, it cann ot be assumed that because the Vendor

was 88 years old, she had impaired capacity. Such an ageist view is quite uncalled for. The Committee observes, with the greatest of respect, that our Sovereign Lady the Queen is only slightly younger than the Vendor in this case and is still, self-evidently, exercising monarchical responsibilities with regard to her realms.

4.4 Counsel for the Licensees makes the valid point that not only is there no evidence to suggest an impairment of capacity on the part of the Vendor but there is, crucially, absolutely nothing to suggest that the Licensee should have suspected the presence of impaired capacity. The Licensee was able to engage in perfectly normal conversations with the Vendor regarding the matters referred to above , e.g. the listing arrangement, appraisal and marketing. The Vendor explained the reasons for her wishing to sell in a way that was quite rational. The Licensee was unaware of the family trust or the power of attorney. She had no reason to be aware of these things and, even if she was, any knowledge of them should not ne cessarily have made any difference. There was also, as stated above, contact with the Vendor’s lawyer.

4.5 The scheme of our empowering Act is, it might be said, very consumer friendly. This is as it should be. Consumer with a concern about a real e state agent should not have to encounter any process difficulty when asking to have a complaint addressed. We also observe that a complaint to the Authority may be made by anyone. There is no requirement for a complainant to have ‘standing ’ in the sense of some sensible connection with the subject matter of the complaint. In this case, the Complainant is not the consumer of services provided by the respondent licensees, nor is he even a friend or relative of the actual consumer, i.e. the Vendor of the subject property. Bluntly, this matter was not any of the Complainant ’s concern. The allegations he has made are extremely serious. He has not presented any tenable evidence to support his assertions, which nevertheless, have had to, in the light of their gravity, be fully considered by the Authority in its usual meticulous manner.

4.6 This complaint is devoid of merit or substance. No further action is, or will be, taken in relation to it.

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 pape rs, 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 inv olved 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 decisi on, but omitting the names and identifying details of the Complainant (including the address of the property), the licensees 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 F iling an Appeal

at www.justice.govt.nz/tribunals.

Signed

Graham Rossiter

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 25 June 2013