Complaint No C02789 [2013] NZREAA 189 (17 September 2013)

Last Updated: 1 June 2014

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

And

In the Matter of Complaint No: C02789

In the Matter of Licensee

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 17th day of September 2013

Complaints Assessment Committee: CAC20003

Chairperson: Marina Neylon Deputy Chairperson: Alison Wallis Panel Member: John Auld

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 This is a complaint made by the Complainant against the Licensee. The Licensee is a licensed salesperson under the Real Estate Agents Act 2008.

1.2. The complaint concerns the conduct of the Licensee while she and her company acted as agents for the sale of two properties. Specifically that;

• The Licensee misled the Complainant about the size and the age of a property that the

Complainant purchased at Property 1 in October 2012 and;

• The Licensee advertised a property for sale at Property 2 in April 2013 as being 150m2

when it was in fact only 140.5 m2

1.3 The Complainant believes that this constitutes misconduct on the part of the Licensee and believes that the Licensee should not be allowed to continue misleading customers and clients.

2. Material Facts

2.1. On 29 March 2012 the Complainant viewed Property 1. The Licensee had advertised the floor area of Property 1 as 140m2, and the age as 1950-1959.

2.2. The Complainant later viewed the property for a second time.

2.3. On 1 April the Complainant made a conditional offer of $125,000 for Property 1 which was accepted. The offer was conditional upon a valuation report being approved by 4pm on 11 April.

2.4. The valuation report was completed by Valuer A. The report notes the size of the dwelling as

110m2 and the garage as 22m2 making a total of 132m2. The report also refers to the age of

the property as 1950’s. The market value, including chattels, established by the report was

$125,000.

2.5. The agreement for sale and purchase of Property 1 became unconditional on 11 April.

2.6. On 31 August the Complainant arranged a new valuation through Valuer B. Their report identifies the size of Property 1 as per the previous report but states the age of Property 1 as

1965 (included in the report is a Computer Freehold Register which states the title issued on 8

April 1964) . The market value was determined to be unchanged at $125,000.

2.7. The Complainant contacted the Authority on 26 October 2012 to complain that she had been misled by the Licensee about the size and age of Property 1.

2.8. The Authority sent a compliance letter to the Licensee warning about the need to ensure that correct information was relayed in her advertising. The Complainant was advised of this action by the Authority.

2.9. In March 2013 Property 2 was advertised for private sale on Trademe with a floor area of

140.5m2.

2.10. On 29 March the Licensee began to advertise Property 2 with a floor area of 150m2.

2.11. The Complainant contacted the Authority on 4 April to complain that the Licensee’s advertising of Property 2 contained incorrect information.

2.12. The Complainant states that she was concerned that the Licensee was continuing to break the rules even after being warned by the Authority.

3. Relevant Provisions

Real Estate Agents Act 2008

S72 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.

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.

4. Discussion

4.1. The Committee determined to inquire into the complaint on 6 May 2013. Our investigation required a response from the Licensee to the issues raised and obtaining records of the information sources used.

4.2. After reviewing the evidence, the Committee is satisfied that the information about the floor area of Property 1 was obtained by the Licensee from the website, Property Guru. This is a website widely used by the real estate industry for information about New Zealand property.

4.3. The Property Guru information for Property 1 states that the floor area is 140m2 and the age is

1950-1959. The Committee notes that the disclaimer at the bottom of the web page clearly states that the provider has sourced information from third parties and does not provide any warranties or assurances of any kind in relation to the information provided.

4.4. The Committee notes that this disclaimer should be a clear warning to Licensees in general that the information may not be 100% accurate.

4.5. That said, the Committee is mindful that the inaccuracies which have resulted in this complaint are minor. The size of the dwelling is recorded by both valuers as 110m2 and the garage as

22m2.

4.6. It is common practice for agents to include the garage in a total floor area calculation. This brings the total to 132m2 which is approximately 8m2 less than what was stated in the Licensee’s advertising.

4.7. The Committee believes that it is reasonable to conclude that this disparity could be a measuring error on the part of the valuers, or the third party supplying information to Property Guru. In either case, the Committee is satisfied that the Complainant may not have been given an accurate figure but knew the size of the property met her needs as she had physically viewed it on two occasions.

4.8. The Committee is similarly disposed to find that the error made in advertising the age of Property 1 as 1950 -1959 (if indeed it is in error) was also gained from information located on Property Guru. The title supplied in evidence shows the date of issue as 1964. The Committee is concerned that the Licensee did not check the title before stating the age, but as titles can often reference previous older versions - that too can have its perils.

4.9. The Committee then turned its attention to the Licensee’s advertising of Property 2. The same web site was used to gain the information on floor area. The Licensee’s information that the floor area was 150m2 is consistent with the Property Guru page information.

4.10. Our investigation was unable to ascertain where the seller of Property 2 gained the information he used to advertise the property on Trademe with a floor area of 112m2 and attached garage of

28.5m2. The total of 140.5m2 is potentially another measuring error but we cannot be certain by who without going to the time and expense of having an expert carry out such a measurement.

4.11. The Committee is satisfied that the provision of this information was completed in good faith by the Licensee to assist potential buyers. We find that the Licensee has used a (normally) reliable and commonly referred to source, but should have couched the information by disclosing that source if she wished to stay at arm’s length from it.

4.12. The Committee has determined that the issues raised by the Complainant do not reach the threshold for unsatisfactory conduct and we have determined to take no further action on the complaint.

4.13. The Committee hopes this decision will highlight the need for licensees to use caution when passing on third party information, even from a reliable source. We recommend that the source be identified to all potential customers and clients so that those clients and customers are aware that the licensee is a conduit for the information only.

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 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

Marina Neylon

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 17 September 2013