Complaint No CB7139657 [2013] NZREAA 34 (26 February 2013)

Last Updated: 16 February 2014

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

And

In the Matter of Complaint No: CB7139657

In the Matter of Licensee 1

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 26th day of February 2013

Complaints Assessment Committee: CAC20007

Chairperson: Ann Skelton Deputy Chairperson: Paul Biddington Panel Member: Joan Harnett-Kindley

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 The Complainants have 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), holds a salesperson license and works for the Agency.

1.2 The complaint relates to the conduct of the Licensee during the sale of the Complainants’ Property, more particularly, the pressure allegedly put on the Complainants by the Licensee to accept one of three offers.

1.3 The complaint was received by the Authority on 18 October 2012 and referred to a Complaints

Assessment Committee (the Committee). The Committee considered the complaint on 16

January 2013 and made a decision pursuant to s 89(2)(c) of the Act to take no further action with regard to the complaint.

2. Material Facts

2.1 On 11 July 2012 the Complainants listed the Property for sale with the Licensee. At the time of listing, the Licensee submitted that the Complainants stated that as the house was two-storey and as one of the Complainants was not well and struggled with the stairs, they had decided to sell the Property. The Licensee stated that at that time one of the Complainants indicated where a lift could be placed and that this may be an option for them.

2.2 During the marketing phase, the Complainants submit that they received advice from a plumber that the installation of a lift at the Property was a possibility which, coupled with the lower estimates of sale price indicated by the Licensee, pursuaded them to think about withdrawing the Property from the market and retaining it.

2.3 After a period of marketing, the Licensee had three parties who had expressed interest in making an offer on the Property. The negotiating price range on the Property had been advertised as between $400,000 and $460,000. According to the Licensee, it is the Agency’s policy that once there are a number of parties interested in a property, a date and time is nominated for all offers to be delivered to the Agency for consideration. In this case, all three parties were advised to provide signed written offers to the offices of the Agency by 4pm, 12

September 2012 and each signed a multi-offer form. It is also the Agency’s policy with regard to multi-offers that the Principal Officer will present the offers to the client. The Licensee arranged for the Principal Officer of the Agency, to present the offers to the Complainants at 4pm, 12

September 2012 at their offices.

2.4 Initially only the husband of the Complainants attended the office to view the offers on 12

September 2012. The three offers were given to him in individual sealed envelopes. The three offers were: Buyer 1 – $430,000; Buyer 2 – $460,000; Buyer 3 – $535,000. The Licensee had met with Buyer 1 to get that offer signed up; the Principal Officer had met with Buyer 2 to sign up that offer; and the offer from Buyer 3 had been forwarded to the Licensee via email and put into a sealed envelope. The Licensee submitted that this process was followed to ensure that the offers were kept confidential as between the buyers and also as between the Licensee and the

Principal Officer.

2.5 Given that Buyer 3’s offer was well above the advertised price range, the Licensee was instructed to confirm with Buyer 3’s solicitor that the amount was correct. This was confirmed as correct via email. The husband of the Complainants advised that his wife was outside waiting in the car and that he needed to discuss the offers with her. The Licensee offered to fetch her from the car. The Licensee submitted that he and the Principal Officer advised the husband that they could take the contracts and seek legal advice. The Licensee submitted that he offered to ring the Complainants’ solicitor to arrange a time to discuss the offer with him, but this was declined. It is the Agency’s policy to get a signed acknowledgment from either client or customer who chose to sign a contract without taking legal advice, stating that they have been given that opportunity to do so but wish to waive that right. A copy of the acknowledgment, dated 12

September 2012, signed by both Complainants, was provided to the Committee.

2.6 After discussing the offers, the Complainants indicated that they would sign the offer from Buyer

3 for $535,000. The Licensee confirmed that the husband did say that it was a hard decision to sell but given his wife’s health and the opportunity to purchase a section in a local subdivision, they had decided to sell.

2.7 The Complainants submitted that they felt pressured into signing the offer from Buyer 3 particularly as they submitted that the Licensee said that if they didn’t sign up the sale then, the offer could be withdrawn.

2.8 On 19 September 2012 the husband of the Complainants phoned the Licensee asking that the Licensee contact the purchasers to request that they agree not to proceed with the sale of the Property. The Licensee stated that the husband also offered to compensate the purchasers.

2.9 The Licensee contacted the purchasers and conveyed the husband’s request. The purchasers said that they were happy to extend the settlement date or rent the Property back to the Complainants, but wished to continue with the sale. The Licensee stated that when he phoned the husband with the purchasers’ reply, the husband stated he had been in contact with his solicitor and had decided to proceed with the contract.

3. Relevant Provisions

3.1 A complaint can only be made in relation to alleged unsatisfactory conduct (s 72 of the Act) or alleged misconduct (s 73 of the Act).

3.2 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.

3.3 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.

89 Power of Committee to determine complaint or allegation

(1) A Committee may make 1 or more of the determinations described in subsection (2) after both inquiring into a complaint or allegation and conducting a hearing with regard to that complaint or allegation.

(2) The determinations that the Committee may make are as follows:

(a) a determination that the complaint or allegation be considered by the

Disciplinary Tribunal;

(b) a determination that it has been proved, on the balance of probabilities, that the licensee has engaged in unsatisfactory conduct;

(c) a determination that the Committee take no further action with regard to the complaint or allegation or any issue involved in the complaint or allegation.

(3) Nothing in this section limits the power of the Committee to make, at any time, a decision under section 80 with regard to a complaint

4. Discussion

4.1 The Committee has considered the evidence before it and finds that, on the balance of probabilities, there is no evidence of undue pressure from the Licensee on the Complainants to sign the agreement. The Committee accepts that the sale and purchase of property can be stressful but accepts the Licensee’s version of events. The Committee notes that the Complainants signed the ‘waiver of legal advice’ acknowledgement form on the day of signing the sale and purchase agreement and accepts the Licensee’s evidence that the offer of obtaining legal advice was made to the Complainants. As to the Complainants’ submission that they felt pressured by the Licensee’s statement that the offer from Buyer 3 could be cancelled or withdrawn, given that it was substantially higher than the other two offers and that the amount had to be confirmed as correct with Buyer 3’s solicitor, if such a statement was made, the Committee do not see this as applying pressure, rather than stating the reality of the situation.

4.2 On that basis, the Committee do not find any evidence to support a finding of unsatisfactory conduct or misconduct on the part of the Licensee.

5. Decision

5.1 After conducting an inquiry into the complaint, pursuant to s 89(1) of the Real Estate Agents Act

2008 (the Act), the Committee held a hearing with regard to that complaint. In accordance with s 90(1) of the Act, the Committee conducted the hearing on the papers, and pursuant to s 90(2) the Committee’s determination was made on the basis of the written material before it.

5.2 The Committee has determined under s 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 s 78(h) of the Act is to publish its decisions.

6.2 Publication gives effect to the purpose of the Act by 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 their company, and any third parties in the publication of its decision.

6.4 The Authority will publish the Committee’s decision after the appeal period has ended. Any application for an order preventing publication must be made to the Disciplinary Tribunal.

7. Right of Appeal

7.1 A person affected by a determination of a Committee may appeal to the Disciplinary 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 lodging an appeal is available by referring to the Guide to Lodging an

Appeal at www.justice.govt.nz/tribunals.

Signed

Ann Skelton

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 26 February 2013