Complaint No C02832 [2013] NZREAA 237 (15 November 2013)

Last Updated: 20 July 2014

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

And

In the Matter of Complaint No: C02832

In the Matter of Licensee 1

License Number: XXXXXXXX and

Licensee 2

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this day 15th of November 2013

Complaints Assessment Committee: CAC20005

Chairperson: Stuart Rose Deputy Chairperson: Paul Biddington 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 Licensee 1, and Licensee 2. Both Licensees are licensed under the Real Estate Agents Act

2008 (the Act). Licensee 1 holds a salespersons licence and Licensee 2 is a licensed agent. Both

Licensees work for the Agency.

1.2 The complaint relates to the Complainant’s purchase of the property (the Property). Complainant says that Licensee 1 represented that the back door lock would be repaired and the property would be professionally cleaned prior to possession, and that he was unprofessional and spoke to her in an angry, intimidating and forceful manner after the settlement date.

1.3 The Complainant says that the complaints process was not dealt with properly by Licensee 2 and the

Agency.

1.4 The complaint was received by the Authority on 2 July 2013 and referred to a Complaints

Assessment Committee (the Committee). The Committee initially considered the complaint on 4

July 2013 and made a decision pursuant to section 79(1) of the Act to inquire into the complaint. The Committee considered further evidence gathered on 18 October and now issues its determination in this matter

2 Material Facts (Complainants perspective)

2.1 The Complainant was a first home buyer spending her inheritance on buying a property. The

Complainant viewed the property and made an offer on 26th February 2013 at the purchase price of

$615,000. This contract failed due to the Complainant’s inability to obtain suitable finance.

2.2 On 12 March 2013 the Complainant entered into a new sale and purchase agreement for the property at a price of $605,000 with settlement due to occur on 28 March 2013. This offer was subject to finance being approved within five days, a building inspection being approved within seven days and a three day solicitors’ approval clause.

2.3 The Complainant says that she was advised by Licensee one that a backdoor and lock would be repaired by the vendors and the house would be professionally cleaned prior to settlement.

2.4 On settlement date the Complainant experienced problems with her finance provider which resulted in settlement not occurring until 2 April 2013.

2.5 The Complainant says that the house was left in a terrible mess and that the repairs hadn’t been completed as agreed. On 10 April 2013 the Complainant invited Licensee 1 to visit the property to pick up an item left behind by the vendors. The Complainant says that this meeting deteriorated into what she describes as “vicious arguing”. The Complainant said that Licensee 1’s tone was angry and intimidating and extremely forceful. The Complainant contacted Licensee 1’s office a short time later and spoke to the sales manager and was advised that the general manager was away. The complainant was then visited at home by the temporary manager who said he would pass on details of the complaint for the general manager to deal with one his return.

2.6 On 9 May 2013 the complainant received an offer of settlement from licensee 2.

3 Relevant Provisions

3.1 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.

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

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.

3.2 When the 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 (Professional Conduct and Client Care) Rules

2012.

3.3 The Real Estate Agents Act 2008

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.

3.4 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.

3.5 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 an exhaustive list, they set minimum standards that licensees must observe and are a reference point for disciplinary 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.

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

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

6.4 A Licensee must not mislead a customer or client, nor provide false information, nor withhold information that should by law or fairness be provided to a customer or client.

8.3 An Agent who is operating as a business must ensure that licensees engaged or employed by the agent are familiar with the Act and other legislation relevant to real estate agency work, associated regulations, and any rules made by the Authority, including these rules.

10.1 An Agent must ensure that there are written in-house procedures for dealing with complaints and dispute resolution.

10.2 A Licensee must ensure that prospective clients and customers are aware of these procedures before they enter into any contractual agreements.

10.3 A Licensee must also ensure that prospective clients, clients, and customers are aware that

they may access the Authority’s complaints process without first using the in-house procedures; and that any use of the in-house procedures does not preclude their making a complaint to the Authority.

4 Parties submissions/ evidence and Discussion

4.1 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 our 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.

4.2 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.

4.3 The first part of the complaint relates to the Complainants claim that the backdoor and lock to the outside of the laundry were going to be repaired by the vendors and that the house would be professionally cleaned on settlement.

4.4 The Complainant says that Licensee 1 told her to trust him and in reliance on that she did not put these matters formerly in writing into the sale and purchase agreement. She says that when she took possession of the property the house was a mess had not been professionally cleaned. She says that on possession the alarm was missing, the garage door remotes were damaged, a blind was broken and carpet had been worn away which had been conveniently hidden by furniture during the building inspection. She says that the backdoor lock had not been fixed and as it was a security issue she had to have this repaired immediately. She says the property was a dirty mess, the garage contained paint containers, rubbish, boxes of wires and other miscellaneous items.

4.5 The Licensee in his response does not agree with the Complainant’s version of events. He says that the door handle was noted in the final inspection however the Complainant stated it wasn’t a big deal and as a result the Licensee made no further mention of this.

4.6 We note that the agency has written to the Complainant and agreed to accept responsibility for the rear door and advised the amount of $256. 84 would be reimbursed to the Complainant. They also offered for a technician to come to the property to rectify the problem with the garage door remotes and likewise in relation to the alarm they agreed to have a technician to rectify the issue and have the alarm put into working order. They say in relation to professional cleaning that the vendors advised they did pay for the property to be cleaned prior to the moving out but that an offer of $210 as a cash payment to compensate for the time the Complainant had spent cleaning has been made.

4.7 On reviewing the evidence in relation to this part of the complaint the committee notes that we have the Complainant saying one thing and Licensee 1 saying another. We have no independent evidence to support either view. Under these circumstances we are unable to support the Complainant’s allegations and have therefore decided to take no further action in relation to this part of the complaint. As an aside we make the comment that we consider the Agency’s offer to the Complainant to be fair and appropriate under the circumstances.

4.8 The second part of the complaint relates to the Complainant’s allegation that Licensee 1 spoke to the Complainant in an angry, intimidating and extremely forceful tone.

4.9 The Complainant advises that on settlement day due to a number of issues that compounded she was unable to settle as per her contractual requirement. She said that she received advice from her solicitor at 4:45p.m on the afternoon of settlement to advise that they had not been able to settle the transaction and that this caused huge emotional turmoil for her. She says that during the day she did not receive one phone call from Licensee 1 offering to support her or see how she was going.

4.10 The Complainant says that later that evening she managed to speak to Licensee 1 who advised her that he knew all about her not being able to settle and that it was her fault, her doing and that he told her she’d created huge problems for the vendors. She says Licensee 1 made her feel like it was her fault and that she had created horrendous problems for so many other people.

4.11 On Wednesday, 10 April the Complainant invited Licensee 1 over to uplift an item that the vendors left in the property and said that at this time she casually advised that her lawyers were in the process of seeking compensation, but that before she could finish a sentence Licensee 1 changed his mannerism form “blasé to vicious” and started defending the vendors and forcefully and angrily telling her that she had settled late hence the penalties. She says that his tone was angry, intimidating an extremely forceful and that he would not let her complete any sentences that she was tried to explain to him.

4.12 She says that she became fearful and worried that Licensee 1 may have become physically aggressive. She says that she burst into tears and left the room asking Licensee 1 to leave her home and that Licensee 1 remained for a least another 10 minutes talking to the complainant’s late father’s partner (Ms. B) who witnessed the proceedings.

4.13 Licensee 1 in his response says that late on the settlement day he became aware that there was an issue around settlement. He says that he then spoke to the vendors of the property and had been assured by the Complainant’s lawyer that settlement would occur by the close of business however that did not happen. He says that he then spoke with Complainant and informed her that she would not be able to take possession of the property until she attended to settlement.

4.14 He says that settlement occurred on 2 April and that on 5 April the Complainant sent a text saying “I’m in!! Still more stuff to come tomorrow and so much unpacking to do. You will have to come over for a coffee once all set up and see how it looks. Thanks so much for bearing with me and getting me my dream home :-). We note that this sentiment appears to be at odds with the Complainants later evidence.

4.15 On 10 April the Licensee says that he returned a phone call to the Complainant and was asked to pick up a TV bracket. When he arrived at the property he says the Complainant stated that she hoped she would not get into any trouble then proceeds to advise that she has been charged significant late fees and that her lawyers were negotiating with the vendor’s lawyers. He says that the Complainant also asked why the door handle wasn’t fixed and why she could not have taken possession on the original settlement date.

4.16 The Licensee says that for the next 15 minutes he tried to reason with the Complainant on a number of issues however at no point did he raise his voice or use inappropriate language. The Licensee described himself as being firm and says that on more than one occasion the Complainant would not let him finish.

4.17 He says that during this period the Complainant became visibly annoyed and less able to engage in rational discussion. That when this occurred he suggested the conversation was not going anywhere and that she should speak with his manager or work through her solicitor to resolve any issues she may have.

4.18 Licensee 1 says that the Ms. B was witness to this conversation and they had a brief discussion around the Complainants’ financial position and that she was upset.

4.19 He says the Complainant mentioned the door handle should have been fixed and that she should have been spoken to on the settlement day like everyone else. The Licensee says he advised her that he had been speaking to many people including lawyers, vendors and purchasers and the bank branch manager and that she was not the first on his list as knowing her status and situation there was nothing he could do at that stage to mitigate her position. Licensee 1 says he expressed sympathy for her situation however made the point that she should direct her anger and questions to the finance company, her solicitor or the finance broker who had caused her to be unable to settle as required by the contract.

4.20 As part of this investigation the committee’s investigator spoke to Ms. B. Ms. B is the Complainants’ stepmother and was present and witnessed this incident. Ms. B advised that she did not wish her comments to be used as part of our investigation. We have not been made aware of her comments and as such have not been able to take them into account to either support or discount the Complainant’s version of events.

4.21 This means that we have two conflicting versions of events and no independent evidence to support the Complainants’ version and as such we have determined to take no further action in relation to this part of the complaint.

4.22 The third part of the complaint is that the Licensee 2 did not deal with the complaint professionally and act appropriately.

4.23 The Complainant says that following the incidents she rang the Agency’s office and asked to speak to the sales manager. She says that she was advised that the Managing Director was away however another member of the office was dealing with matters in his absence. She says that she spoke to a person by the name of Mr. R and was asked to put her complaint in writing and to come in and discuss it with him. Because the Complainant was uncomfortable to come into the office Mr. R agreed to come to her home. The complainant says that Mr. R attended her home and was

genuinely very kind and he explained her written account of the complaint would be handed to the manager on his return to work.

4.24 The complainant says that about two weeks later she received a phone call from Licensee 2 and that he asked that she meet with them. The meeting was arranged at Licensee 2’s office and the Complainant took a support person with her. The Complainant says that he did not show any warmth or empathy and offered no apology on behalf of the Licensee. She says that during the meeting Licensee 2 made it clear that in his view nothing serious would happen to Licensee 1 and that the Complainant had to leave speaking with Licensee 1 totally up to them. She says that Licensee 2 kept asking her forcefully what she wanted as an outcome and she tried to explain that she wanted something to be done about Licensee 1 and the fact that he had verbally attacked her. She says that it appeared that Licensee 2 clearly thought that Licensee 1 had done nothing wrong and that he was perfectly content with Licensee 1 working from his office.

4.25 The Complainant says that on 9 May she received a letter from Licensee 2 which contained a letter from Licensee 1 but that nowhere in the letter did Licensee 1 mention verbally abusing her or apologising for this. The Complainant says it is very clear from this response that they were not concerned that Licensee 1 had verbally attacked her and nor had they done anything to address this issue. The Complainant says that she would not sign the document as it is an “absolute insult to the trauma that Licensee 1 had put her through.”

4.26 Licensee 2 has provided a response to the committee in which he states;

a) Licensee 1 became a real estate apprentice in March 2012 and has worked under him since that time. On 7 August 2012 Licensee 1 moved into a sales role within their existing team at which time he had received 45 hours of planned “one-on-one training”.

b) He says that when the complaint was initially received he was on holiday and made contact

with the Complainant on his return.

c) He says that during the meeting with the Complainant he said on several occasions that if Licensee 1 had made promises about the house and property that were not true then they would be required to fix them.

d) He says that he made the comment that in the time he has known Licensee 1 he has never

once seen any signs that would lead him to believe that he was the type of man the

Complainant was describing in her claim.

e) He said that at the meeting he clearly got the understanding from the Complainant that matters could be fixed and that their letter dated 9 May 2013 was a willingness to accept that there were some things that they did not get right in the transaction that they accept and would look to make good.

4.27 On review of the evidence we find no fault with Licensee 2’s handing of the complaint and have

determined to take no further action in relation to that part of the complaint.

4.28 The last issue raised by the Complainant is that Licensee 1 was not properly supervised.

4.29 Licensee 2 in response advises that he is the supervisor of Licensee 1 as the Agency’s principal licensee. He advises that the Agency also employs a sales manager who is a REINZ qualified and also has a qualified legal executive who has direct contact with the salespersons on a day-to-day basis

4.30 On the evidence available to the committee there is no evidence of a lack of supervision or failing in their duty to supervise on behalf the company and we have determined to take no further action relation to that part of the complaint.

4 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

Stuart Rose

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: xx