Curson - Complaint No C00268 [2013] NZREAA 289 (2 September 2013)

Last Updated: 16 September 2014

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

And

In the Matter of Complaint No: C00268

In the Matter of Stewart Curson

License Number: 10007714

Decision of Complaints Assessment Committee

Dated this 2nd day of September 2013

Complaints Assessment Committee: CAC20002

Chairperson: Patrick Waite Deputy Chairperson: Deirdre McNabb Panel Member: Barrie Barnes

Complaints Assessment Committee

Decision finding unsatisfactory conduct

1. The Complaint

1.1 The Complainant has complained to the Real Estate Agents Authority (the Authority) about the conduct of Mr. Stewart Curson (the Licensee). The Licensee is licensed under the Real Estate Agents Act 2008 (the Act), and is working for Lincoln Darling Real Estate Limited t/a Century 21 (the Agency).

1.2 The Complainant retained the Licensee as her real estate agent when listing her Residential

Property for sale in August 2012.

1.3 The Complaint is about the conduct of the Licensee during the sale of the Property, specifically:

• that the Licensee’s suggestion that he could achieve a sale of $179,000 for the Complainant

encouraged her to list her Property for sale;

• that the Licensee’s advice that the Complainant declared her offer on another Property unconditional before selling her Property was unprofessional;
• that the Licensee breached a verbal agreement that advertising costs would not exceed $1,000 in invoicing her $1,500;

• that the Licensee has failed to return the key provided to him for marketing the Property.

1.4 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 8 February 2013 and made a decision to inquire into it.

1.5 The Committee invited the Licensee to provide a response to the complaint which was received in

February 2013. Mr. Curson was interviewed by the Authority’s Investigator on 11 June 2013.

1.6 The Authority’s Investigator interviewed the Complainant on 7 March 2013.

1.7 Having satisfied itself that it had completed its inquiry into the complaint, the matter was considered by the Committee on 29 July 2013.

1.8 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 The Complainant purchased the Property in March 2010. The Vendor was the Licensee’s daughter

and the Licensee attended to the real estate work in this sale.

2.2 In August 2012, the Complainant listed her Property with the Licensee. The Complainant suggests that this was after the Licensee indicated that the Property could be sold for around $179,000. The Property was marketed to offers over $169,000.

2.3 Soon after listing the Property, the Complainant made an offer on another Property (Property 1). As a result of a Building Report, this agreement did not proceed. Around this time the Licensee brought an offer of $169,000 to the Complainant. The Complainant countered at $175,000. The Prospective

Purchaser’s inability to obtain finance at this level did not allow her to continue with the offer.

2.4 In October 2012, the Complainant made a conditional offer on Property 2. This offer was conditional upon the Complainant selling the Property. The contract allowed for the Vendors of that Property to accept other offers, requiring the Complainant to declare her offer unconditional for it to remain live.

2.5 The Complainant claims that she was advised by the Licensee to declare her contract on Property 2 unconditional under the premise that he had a party interested in the Complainant’s Property. The Licensee denies that he gave the Complainant this advice.

2.6 The Complainant did not proceed with her offer on Property 2. Her listing with the Licensee was cancelled on 9 November 2012. After unsuccessfully attempting to sell her Property through another real estate business, the Complainant withdrew it from sale.

2.7 The Committee is satisfied that a full disclosure of all documents relevant to this investigation has taken place and that comment has been sought from all parties relating to the issues under inquiry.

3. Relevant Provisions

3.1 The Committee examined the information supplied by the Complainant in her written complaint 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).

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 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.

3.3 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 willful 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.

3.4 Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012

9.1 A Licensee must act in the best interests of a client and act in accordance with the

client’s instructions unless to do so would be contrary to law.

9.2 A Licensee must not engage in any conduct that would put a prospective client, client, or customer under undue or unfair pressure.

4. Discussion

4.1 Issue 1: Did the Licensee encourage the Complainant to list her Property for sale with unrealistically high sale expectations?

4.2 The Licensee has provided a response in which he advises that he would frequently see the Complainant at her place of work. That it was following one of these occasions that the Complainant contacted him to list her Property as she had located a Property which she wished to purchase.

4.3 The Complainant listed her Property on 5 August 2012. No appraisal was provided by the Licensee until 13 August 2012 when in the covering letter the Licensee suggested that the Property would likely sell in the region of the ratable value ($160,000) but indicated in the accompanying Comparative Market Analysis a range of $169,000 to $190,000.

4.4 Ms. S, a Mortgage Broker, in an interview on 7 June 2013, advised that she had received a phone call from the Complainant to say that the Licensee had approached her and told her that he could get $179,000 for her Property.

4.5 Issue two: Was the Licensee negligent in suggesting that the Complainant make her offer on Property 2 unconditional and encouraged this by offering to pay for half of t he cost of a valuation on this Property?

4.6 The Licensee denies that he suggested to the Complainant that she make her offer on Property 2 unconditional as he expected an offer to eventuate on her Property later that day or next day. The Licensee says that he spoke with the Complainant’s mortgage broker and asked her if it would be possible for the Complainant to make her offer unconditional.

4.7 The Complainant maintains that the Licensee did advise her to make her offer unconditional. This is supported by Ms. S, a Mortgage Broker who, in an interview by the Authority’s investigator on 7

June 2013, confirmed that the Licensee rang her to say he was advising the Complainant to go

unconditional to which she said “that is not going to happen.” Ms. S added that the Complainant had phoned her later to say that the Licensee had asked her to go unconditional and that she had been asked by the Complainant what did that mean to which she had advised her that “virtually meant she was making a cash offer and she couldn’t do that because she had to sell her own house.” Ms. S was concerned at the pressure that the Complainant was under with the Licensee purported to have been telling her to go unconditional and that he had some cash offers coming through that afternoon. A cash offer was received for $150,000 which was not sufficient to allow the Complainant to finance the other Property.

4.8 The Licensee agrees that he had offered to pay half the cost of commissioning a valuation for

Property 2. He explained that he had made this ‘generous’ offer to share the cost with the

Complainant because he was not sure if he would get the offer on her Property or not.

4.9 Issue three: What were the agreed advertising costs and has the Licensee invoiced this?

4.10 When spoken with further the Complainant said that she cannot be sure what price was agreed for advertising. She believes that it was $1,000 and cannot recall any conversation increasing this. The Licensee says that the Complainant requested further advertising when she made the offer on Property 2. When spoken with further, the Licensee advised that he will not be pursuing the invoiced amount for advertising over $1,000.

4.11 Issue four: What was the situation regarding the key for the Complainant’s Property?

4.12 It appears that there was a misunderstanding on the Licensee’s part regarding the key used to access the Complainant’s Property during marketing. The Licensee believed that he had returned the key to the Property. It seems, however, that the fact that a key remained in a lock box on the Property had not been communicated or had been misunderstood. The Licensee has advised that he has now retrieved the lock box and left the key at the Property for the Complainant.

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 In considering the issues included in the complaint, the Committee formed a view that, whilst there is no clear evidence to support the claim that the Licensee promoted an unrealistic probable sale price to encourage the Complainant to list her Property, the appraisal, which was neither provided to the Complainant nor completed until about a week after the listing date, gives contrasting price expectations. I.e. whilst the Licensee indicates in a covering letter a sale price in the region of

$160,000, he provides a suggested a selling range of $169,000 to $190,000.

5.3 With the lack of any written document detailing agreed advertising expenditure, and uncertainty on the part of the Complainant, there is little to assist the Committee to form a view as to which party is correct. It could be considered that a prudent Licensee would ensure such arrangements are recorded in writing. The Committee noted that the Licensee has advised that he will not now be seeking advertising costs above $1,000.

5.4 The situation with the key for the Property appears to be a genuine misunderstanding on the Licensee’s part and perhaps poor communication on the Complainant’s part. The Committee noted that the key has been returned to the Complainant.

5.5 In the Committee’s view, the information that has been gathered in the investigation of the complaint does support the Complainant’s claim that the Licensee did encourage the Complainant to make her offer on Property 2 unconditional. This view is further supported by the Licensee’s out of the ordinary offer to pay half of the valuation costs for the Complainant. It seems likely that without the intervention of the mortgage broker, this would have eventuated. It is apparent that the anticipated ‘cash offer’ that the Licensee believed was coming in would have been too low to allow the Complainant to secure finance, resulting in her likely defaulting on that contract. It would seem from the information received that the Complainant is not experienced in Property transactions and felt under considerable pressure by both the situation, with her need to move to a larger Property,

and her belief that the Licensee encouraged her to go unconditional. She clearly relied on outside advice from her mortgage broker and the Licensee who she had engaged to sell her Property. The Committee has concluded, therefore, that the Licensee is in breach of:

• Rule 9.1: A Licensee must act in the best interests of a client and act in accordance with the

client’s instructions unless to do so would be contrary to law.

• Rule 9.2: A Licensee must not engage in any conduct that would put a prospective client, client,

or customer under undue or unfair pressure.”

5.6 Accordingly, the Committee has determined that under section 89(2)(b) of the Act that it has been proved, on the balance of probabilities, that Mr. Stewart Curson has engaged in unsatisfactory conduct.

6. Orders

6.1 The Committee will conduct a separate hearing on the papers to decide what orders, if any, should be made under section 93 of the Act.

Section 93 provides:

93 Power of Committee to make orders

(1) If a Committee makes a determination under section 89(2)(b), the Committee may do 1 or more of the following:

(a) make an order censuring or reprimanding the Licensee;

(b) order that all or some of the terms of an agreed settlement between the Licensee and the complainant are to have effect, by consent, as all or part of a final determination of the complaint;

(c) order that the Licensee apologise to the complainant;

(d) order that the Licensee undergo training or education;

(e) order the Licensee to reduce, cancel, or refund fees charged for work where that work is the subject of the complaint;

(f) order the Licensee:

(i) to rectify, at his or her or its own expense, any error or omission; or

(ii) where it is not practicable to rectify the error or omission, to take steps to provide, at his or her or its own expense, relief, in whole or in part, from the consequences of the error or omission;

(g) order the Licensee to pay to the Authority a fine not exceeding $10,000 in the case of an individual or $20,000 in the case of a company;

(h) order the Licensee, or the agent for whom the person complained about works, to

make his or her business available for inspection or take advice in relation to management from persons specified in the order;

(i) order the Licensee to pay the complainant any costs or expenses incurred in respect of the inquiry, investigation, or hearing by the Committee.

(2) An order under this section may be made on and subject to any terms and conditions that the Committee thinks fit.

6.2 The Committee requires the Case Manager to obtain a record of any previous disciplinary decision in respect of the Licensee under either the Real Estate Agents Act 1976 or the Act, if any such decision exists, and provide it to the Committee, the Licensee and the Complainant.

6.3 The Licensee and the Complainant may file submissions on what orders, if any should be made. The Complainant may file submissions within 10 working days from the date of the decision. These submissions, if any, will then be provided to the Licensee, with a timeframe for filing final submissions.

7. Publication

7.1 One of the Committee’s functions pursuant to section 78(h) of the Act is to publish its decisions.

7.2 The Committee has deferred making any decision on publication until its hearing to decide what orders, if any, should be made.

8. Right of Appeal

8.1 A person affected by a determination of a Complaints Assessment Committee may appeal by way of written notice to the Real Estate Agents Disciplinary Tribunal (the Tribunal) against a determination of the Committee and must do so within 20 working days from the date of the determination.

8.2 The Committee considers that the 20 working day appeal period does not commence until it has finally determined this complaint by deciding what orders should be made, if any.

8.3 Appeal is by way of written notice to the Tribunal. Further information on filing an appeal is available by referring to the Guide to Filing an Appeal at www.justice.govt.nz/tribunals.

Signed

Patrick Waite

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 2nd September 2013