Wilson - Complaint No C00442 [2013] NZREAA 336 (13 November 2013)

Last Updated: 19 October 2014

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

And

In the Matter of Complaint No: C00442

In the Matter of Hazel Wilson

Licence Number: 1001240

And

Licensee 2
Licence Number: XXXXXXX

Decision of Complaints Assessment Committee

_{Dated this 13}th _{day of November 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 Real Estate Agents Authority (the Authority) received a complaint from the Complainant in regard to Ms. Hazel Wilson (Licensee 1), and Licensee 2. Licensee 1 holds a salespersons licence and are works for Total Realty Limited, Christchurch (the Agency). Licensee 2 holds an agents license and trades as Total Realty Ltd.

1.2 The complaint is about the conduct of the Licensees in relation to the purchase of a property by the Complainant at the Property.

1.3 The Complaint is that:

• The Complainant was not given the Pre-Contract Disclosure Statement at the time of signing the sale and purchase agreement.

• The Property was advertised as a fixed term tenancy ending 12 February 2013, however

the Complainant was advised after confirmation of the contract that the Tenant was on a periodical tenancy from that date.

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 7

June 2013 and made a decision to inquire further.

1.5 The Committee invited the Licensees to provide a response to the complaint, which was received. In addition a number of people who were involved in the Property including the Vendor and the Property Manager have been interviewed or have responded with information.

1.6 Having satisfied itself that it had completed its inquiry into the complaint, the matter was considered by the Committee on 24 September 2013.

1.7 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 viewed and made an offer on 21 December 2012 for a property.

2.2 Licensee 1 advised the Complainant that the Property had a fixed term tenancy that was due to expire on 12 February 2013. The rental was fixed at $330 per week.

2.3 The Complainant was not provided with a Pre-Contract Disclosure statement at the time of signing the sale and purchase agreement. The statement however was provided to the Complainant on 7 January 2013 prior to the contract becoming unconditional on 21 January

2013.

2.4 Upon confirming the special conditions of the contract, the Complainant discovered that the

been offered a periodical tenancy. This meant the Complainant was required to give the sitting Tenant 42 days notice to vacate from 13 February 2013 (i.e. by 27 March 2013) and not have the property vacant on 12 February 2013 as the Complainant had believed. The Tenant gave notice and vacated the property on 16 March 2013.

3. Relevant Provisions

3.1 The Committee examined the information supplied by the Complainant in his 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 Licensees could be considered guilty of unsatisfactory conduct ( section 72) or misconduct (section 73).

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.

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 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.

3.2 Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009

Rule 5 Standards of professional competence

5.1 A Licensee must exercise skill, care, competence, and diligence at all times when carrying out real estate agency work.

Rule 6 Standards of professional conduct

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

6.3 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.

4. Discussion

4.1 Issue one: Licensee 1 did not provide a Pre-Contract Disclosure Statement as required by the

Unit Titles Act 2010

4.2 The property was listed for sale on 10 December 2012 with an agreement with the Vendor that there would be no viewing until after the Christmas holidays.

4.3 Licensee 1 advised in her response to the complaint that she had spoken to the Chairman of the Body Corporate prior to Christmas and due to the holiday period was not able to obtain a Pre- Contract Disclosure Statement until 7 January 2013.

4.4 The Complainant became aware that the Property was for sale through his Mother who worked at Total Realty Limited as their Office Administrator. He was very keen to view the Property prior to it being properly marketed after Christmas. Through his Mother he pressed Licensee 1 to allow him to view the Property prior to Christmas and eventually she agreed. After inspecting the Property he wrote up his own conditional offer on a Sale and Purchase Agreement form on

21 December 2012.

4.5 A Pre-Contract Disclosure Statement was received by the Complainant’s Solicitor on 8 January

2013.

4.6 The Complainant has stated that his first knowledge of the fact that a Pre-Contract Disclosure was required was when he was notified by his Solicitor. Licensee 1 however has stated in response that the Complainant was told that the statement would not be available until 7

January 2013 as this was the first day back at work. “As the contract was conditional and the conditions would not start until 7 January it was agreed that they proceed under the conditions.”

4.7 The Office Manager at the Agency, Ms. R, in an interview on 20 August 2013 stated “I overheard a conversation where Licensee 1 told the Complainant’s Mother that one of the reasons there was no viewings was because the Pre-Contract Disclosure was not ready until the New Year. I also heard a conversation where the Complainants Mother spoke to Licensee 1 and said she had spoken to the Solicitor, and the Solicitor said it was ok to do the viewing and that they would sort out the document in the New Year. I am categorically clear that Licensee 1 said that the Pre Contract Disclosure was not available until the New Year.”

4.8 Licensee 2 has provided the Authority with notes that she made at the time as she had been alerted by the Office Manager of the pressure that the Complainant was putting on the Office Administrator (Complainant’s Mother) to organize a viewing of the Property that his Mother had told him about. Licensee 2 noted that the Office Manager heard the Complainant’s Mother say to Licensee 1 that her son wanted to go regardless and that he would speak to his Solicitor (her daughter in law) before proceeding and explain that this particular document (the Pre-Contract Disclosure Statement) was not available until the first working day – 7 January 2013.

4.9 The Complainant’s Mother in an interview on 20 August 2013 advised that whilst she was aware

about that. However she denies that she spoke to her daughter in law (her son’s Solicitor) about the Pre-Contract Disclosure Statement and that she had told Licensee 1 that it was ok to sort it out in the New Year.

4.10 Issue two: Licensee 1 told the Complainant that the tenancy was a fixed term until the 12

February 2013 when in fact a periodical tenancy had been put in place.

4.11 The Complainant has stated that at no time in any advertising material or discussions with the Licensee was there any indication it was anything but a fixed term rental with vacant possession after 12 February 2013. Rent was set at $330 per week.

4.12 As soon as the contract was confirmed he requested that Licensee 1 give 21 days notice to the Tenant immediately. After confirming the contract and paying the deposit he was advised that the Tenant was actually on a periodic tenancy and that he was now required to give 42 days notice from 13 February 2013.

4.13 The Licensee in response has stated:

• She did advise the Complainant that the tenancy was a fixed term that was due to expire

soon and that the Tenant was keen to stay on.

• She put the Complainant in touch with the Property Manager.

• Licensee 1 was told by the Owner that the Tenant was on a fixed term tenancy, and that these details were put into the sale and purchase agreement. The Complainant had stated that he was keen to keep the Tenant on.

• She had not been told by the Vendor or Property Manager that the Tenant had been offered and accepted a periodical tenancy.

4.14 The Property Manager Mr. J has confirmed that:

• In early December 2012 the renewal came up for consideration

• On 8 December 2012 a letter was sent to the Tenant offering a renewal on the basis of a

periodic tenancy as the Property was on the market.

• At the time the property sale was confirmed in mid-January 2013 the tenancy renewal process was well underway.

• Mr. J had not told Licensee 1 that a periodic tenancy had been offered.

4.15 The Vendor instructed the Property Manager to offer the Tenant a periodical tenancy at the expiry of their fixed term tenancy two days after signing the Listing Agreement with Licensee 1. In an email dated 21 January 2013 the Vendor instructed the Property Manager to give the Tenant notice.

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 It is clear from the evidence and statements provided by all parties that the Complainant was introduced to the Property by his Mother who works at the Agency. Statements made by office staff indicate that the Complainant was ‘very pushy’ in terms of wanting to view the Property

prior to it coming on the market. The Office Manager, Ms. R, has stated that the Complainant’s Mother was advised that her son could not view the Property until after the New Year as the Pre-Contract disclosure was not available. Ms. R reported on a conversation she had overheard between Licensee 1 and the Complainant’s Mother where Licensee 1 was told the Solicitor for the Complainant had advised to organize a viewing and they would worry about the Pre- Contract disclosure at a later point.

5.3 The Committee whilst noting that the Complainant maintains he was not aware that a disclosure statement was required, found that his evidence was in conflict with the witness Ms. R and the file notes provided by Licensee 2.

5.4 The Committee accepts assurance from the Licensee that she was aware of the requirement to have a Pre-Contract Disclosure Statement available and that she had made considerable effort to obtain one prior to Christmas. The Licensee clearly was placed under pressure by the Complainant, with the concurrence of the Vendor, to allow viewing prior to Christmas. The Complainant’s Mother acknowledges that she was aware that Licensee 1 was having difficulty getting the Pre-Contract Disclosure Statement.

5.5 The Committee recognises that Licensee 1 was placed in a difficult situation in that, whilst needing to obtain a Pre-Contract Disclosure Statement prior to a sale and purchase agreement signed, she had a responsibility to her Vendor to achieve a sale.

5.6 Whilst less than desirable the Committee accepts the assurance from the Licensees that they acted in the best interests of the Vendor however the reality is that a Pre-Contract Disclosure statement was required before the Property was introduced to a Potential Buyer.

5.7 In regard to the change in the term of the tenancy, it is clear to the Committee that there was considerable confusion and lack of communication between the Vendor, Property Manager and the Licensees. Licensee 1, incorrectly as it turned out, relied on information supplied by the Vendor at the time of listing. There is no evidence to show that the Vendor or the property management company had at any time advised the Licensees that the fixed term tenancy was going to convert to a periodical tenancy.

5.8 In conclusion the Committee has found that there is no evidence provided which would justify a finding of unsatisfactory conduct against Licensee 2. The Committee has accordingly determined under section 89(2)(c) to take no further action against Licensee 2.

5.9 However, in relation to the complaint against Licensee 1 the Committee has concluded, that in not ensuring that a Pre-Contract Disclosure statement was provided before a sale and purchase agreement was negotiated, and ensuring that the details of the tenancy arrangements were correct when completing the sales and purchase agreement, she has fallen short of the expectations of a Licensee and is in breach of Rule 5.1.

5.10 Accordingly the Committee has determined under section 89(2)(b) of the Act that is has been proved, on the balance of probabilities, that Ms. Hazel Wilson 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 with a finding of No Further Action 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 No Further Action determination.

8.2 A person affected by a determination of a Complaints Assessment Committee with a finding of Unsatisfactory Conduct 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 final determination.

8.3 The Committee has yet to finally determine this complaint because the parties are being given an opportunity to make submissions on orders before the Committee determines what orders should be made, if any.

8.4 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.

8.5 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. g ovt. nz/tr ibuna ls .

Signed

Patrick Waite

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 13 November2013