Complaint No CD500066 [2013] NZREAA 226 (31 October 2013)

Last Updated: 12 July 2014

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

And

In the Matter of Complaint No: CD500066

In the Matter of Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 31st day of October 2013

Complaints Assessment Committee: CAC20008

Chairperson: Ellen Ryan

Deputy Chairperson: Graham Rossiter

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). He holds a branch manager’s licence.

1.2 The Complainant states he told the Licensee he wanted a joint listing for his property but that the Licensee was pushy, would not leave and pressured him into signing an agreement to auction the property. He says when an offer was made on the property, which the Complainant did not accept, the Licensee came to his home looking angry and waving the deposit cheque of

$58,000.00 at him saying he was letting a good offer go and he would not get a higher offer. It is also alleged by the Complainant that he advised the Licensee not to enter his property again but that the Licensee entered the property anyway and removed the Complainant’s private sale signboard.

2. Material Facts

2.1 The Complainant alleges that he wanted a joint listing but was promised by the Licensee he would get a better price if he went for auction and could achieve over $600,000.00. The property was then advertised. On 24 October 2012 he was told an offer was made of

$580,000.00. He would not accept the offer. He further alleges the Licensee then came to his home and was looking angry, waving the deposit cheque in front of his face saying that he was letting this money go and he would not get a higher offer. He says the Licensee then began to tell him negative things about his property; that it was located in a narrow street with not much parking and no bedroom or shower downstairs. He further alleges that the next day the Licensee contacted him again and kept pushing him to accept the offer. He says he asked the Licensee to lower the commission but he refused. The Complainant advises he then emailed the Licensee to not enter his property again and not to do any more open homes but says the Licensee entered his property and removed his private sale sign.

2.2 In his response the Licensee says he had given feedback to the Complainant from prospective buyers who had told him there were issues with the property being located in a narrow street, that parking was congested and there was no bedroom or shower downstairs. He says there was only one buyer who made a pre-auction offer which he thought was reasonable given the level of interest and recent sales. He advises he did try to convince the Complainant in a professional manner to think about the offer but that he rejected it. The Licensee says he then emailed the Complainant a copy of an office memo which listed a number of properties, detailing the prices of initially rejected offers and the final selling prices. He says his intention was to inform the Complainant that, as detailed in the memo, the first offer is often the best offer. The Licensee considered that the information was available to the public.

2.3 The Licensee denies he promised to achieve a sale of $600,000.00 plus commission costs to the

Complainant. He says he told him his role is to market the property and whatever offers are

made, it is up to him to accept an offer or not. He says the initial request from the Complainant was to list the property jointly but he suggested to him an auction may be a better way of achieving a higher price. The Complainant agreed. The Licensee says he also agreed to reduce the marketing fees by 50% and the agency agreement was signed. He further advises that a few days later the Complainant contacted him saying that he now wanted to change to another agency and sign a sole agency with them as they would charge only $10,000.00 for the commission, no marketing fees and achieve a price of $620,000.00. He explains, however, this was not acceptable as the listing agreement had already been signed with his agency. The Licensee denies applying any pressure on the Complainant to sign the agency agreement.

2.4 The Complainant had asked for a refund of the marketing fee of $486.50 yet it had already been spent on his property on the LIM report, professional photos of the property and the sign board. The Complainant had used both the photos and the signboard for marketing his private sale. As to entering onto his property, an open home had already been advertised at this stage and the property was not yet withdrawn from the market. The Licensee advises that at the time of the open home he just stood on the side of the street to take the details of prospective buyers who came to see the property. He says he then saw that the agency’s signboard was replaced with the private sale sign so he just took the signboard sticks from the front yard of the property as they belonged to their agency. The Licensee says he is an experienced agent and did his best for the Complainant in a professional manner.

2.5 The Complainant also stated that he had contacted the other agent before he spoke with the Licensee and that is how he knew that the commission was only going to be $10,000.00 and that he did not change his mind after he got the commission information. This other agent was interviewed by the REAA investigator and states that he told the Complainant he would agree to a joint listing, however, he did not say the commission would be $10,000.00. He advises that he could not say how much the commission amount would be until the house is sold as it is based on a percent basis.

3. Relevant Provisions

3.1 The relevant law is section 72 of the Real Estate Agents Act 2008 (the Act)

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 The Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009 (Rules) also apply and the following rule is relevant: Rule 5.1 that ‘a licensee must exercise skill, care, competence, and diligence at all times when carrying out real estate agency work.’

4. Discussion

4.1 The Complaints Assessment Committee (the Committee) have considered the Complainant’s allegation that the Licensee pressured him into signing a sole agency agreement to sell his property by auction, however, we find no evidence of coercion on the part of the Licensee. The Licensee is adamant he did not pressure the Complainant to sign the agency agreement. Neither do we see any wrong doing on the part of the Licensee in trying to convince the Complainant to accept a pre-auction offer as he believed it was a reasonable offer given the level of interest in the property. The decision still remains with the Complainant whether to accept the offer or not.

4.2 As to the signboard issue, the Licensee states he only removed sticks from the Complainant’s front yard that belonged to his agency as the Complainant was now pursuing a private sale of his property. We are satisfied that there has been no breach of the Act or the Rules by the Licensee in this regard.

4.3 We have also addressed an issue of confidentiality with respect to the memo dated February

2001 sent by email to the Complainant listing properties where the initial offer had been declined and were subsequently sold for a lesser amount. According to the Licensee he was using this memo, given to him by a previous manager, as a marketing tool to show vendors that it is likely the first offer can turn out to be the best offer. He did not realise that there may be a possible confidentiality issue and was happy to destroy it. As the memo does not list the names of the parties involved it is our view that there has been no breach of confidentiality.

4.4 We conclude that there has been no wrong doing on the part of the Licensee in respect of the

Act or the Rules.

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 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 Authority. 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 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

Ellen Ryan

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 31 October 2013