Complaint No CB7035329 [2013] NZREAA 45 (18 March 2013)

Last Updated: 2 March 2014

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

And

In the Matter of Complaint No: CB7035329

In the Matter of Licensee 1

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 18th day of March 2013

Complaints Assessment Committee: CAC20005

Chairperson: Chris Rogers Deputy Chairperson: Stuart Rose Panel Member: Denise Bovaird

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 The Complainant complained to the Real Estate Agents Authority (the Authority) about the conduct of the agent licensee. The agent licensee is the principal of the Agency.

1.2 The complaint (CB6838121) was received by the Real Estate Agents Authority (the Authority) on

30 May 2012 and referred to a Complaints Assessment Committee (the Committee). The Committee considered the complaint on 24 August 2012 and determined to enquire into the complaint.

1.3 The Complainant believed that salespeople under the supervision of the agent licensee were complicit in assisting a purchaser to deceive the Complainant with regards to the purchaser’s identity and true motivation for entering into a sale and purchase agreement with the Complainant.

1.4 The Committee also determined under section 78(b) to initiate an inquiry into the conduct of the Licensee being one of the salespeople named in complaint. The committee received and considered an investigation report on 24 January 2013.

1.5 The complaint alleged that the Licensee withheld information that in fairness should have been disclosed to the Complainant.

2. Material Facts

2.1 The Complainant listed the Property for sale with the Agency on 23 July 2010 with an asking price of $585,000.

2.2 The asking price was based on an appraised market value of between $550,000 and $575,000 provided by a salesperson working for the Agency on 19 July 2010.

2.3 Within 1 week of listing the Property and according to the Complainant, prior to any marketing, an offer to purchase the Property was presented to the Complainant by the listing salesperson.

2.4 The offer was for $425,000 and from a party the Complainant identified as a property trader. The

Complainant declined to negotiate with the potential purchaser.

2.5 After the original listing salesperson ceased employment with the Agency, the Licensee contacted the Complainant and listed the Property for sale by tender, closing 16 September

2010.

2.6 On the tender closing date 4 offers were presented to the Complainant. They were:

$425,000 from the original property trader,

$435,000, $450,000 and $475,000 from other parties.

The Complainant countersigned the highest offer and an agreement was reached at $485,000 with settlement set for 30 November 2010.

2.7 On 18 September 2010 a notice, from the solicitor acting for the purchaser, was delivered to the solicitor acting for the Complainant advising that the purchaser had assigned its rights under the sale and purchase agreement to the property trader.

2.8 The transaction settled on the due date and the Property was subsequently sold to another party by the property trader for $525,000.

3. Relevant Provisions

3.1 A complaint can only be made in relation to alleged unsatisfactory conduct (section 72 of the

Act) or alleged misconduct (section 73 of the Act).

3.2 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. 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 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.

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

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.

4. Discussion

4.1 The Complainant maintains that the Licensee was aware of what he calls the ‘back door’ means by which a property trader, with whom the Complainant did not wish to deal, ended up purchasing the Property.

4.2 The Licensee maintains that at no time did the Complainant make it clear he did not want to deal with the property trader or his company.

4.3 The Licensee was aware of the first offer from the property trader and maintains that he discussed the matter with the Complainant.

4.4 The Property was marketed by way of a tender and attracted 4 offers.

4.5 The Licensee maintains that the property trader referred a buyer to him who, after offering the top price at tender and negotiating over the following 2 weeks, turned out to be purchaser of the Property.

4.6 The Complainant’s solicitor was advised of the assignment of rights to the property trading company 2 days after the agreement was entered into and no concerns were raised by either the solicitor or the Complainant.

4.7 The Licensee maintains that he was told by the property trader that the buyer being referred to him was a friend looking for an apartment to renovate – information he passed on to the Complainant.

4.8 The Licensee maintains he was unaware of any assignment of rights or resale of the Property until the matter was raised by the Complainant in his letter of concern to the Agency.

4.9 The Committee has been provided with letters of feedback written by the Licensee during the course of the tender marketing campaign, along with copies of the final sales agreement. There seems to have been a thorough and ultimately successful sale program carried out by the Agency and no evidence to indicate that the Complainant’s best interests were not taken into account.

4.10 The Committee can find no evidence of conduct on the part of the Licensee that would breach the threshold of unsatisfactory conduct or misconduct and dismiss the complaint accordingly.

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 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

Chris Rogers

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 18 March 2013