Complaint No CB6815405 [2013] NZREAA 67 (15 April 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: CB6815405 (1) Complaint No: CB6815432 (2)

In the Matter of Licensee 1

Licence Number: XXXXXXXX

Licensee 2

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 15th day of April 2013

Complaints Assessment Committee: CAC20002

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

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 who is licensed under the Real Estate Agents Act 2008 (the Act). He holds a salesperson’s license and is working for the Agency. The Complainant also complained about the conduct of Licensee 2 who also worked for the Agency.

1.2. The complaint is:

(1) Licensee 1 failed to act with care and competence with the advertising of the Complainant’s property and failed to adequately compensate the Complainant for the errors that occurred during the marketing of the property.

(2) Licensee 2 failed to adequately respond and address the concerns raised by the Complainant in order that his complaint was resolved in accordance with the Leaders Property Management Limited in house procedures.

1.3. The Complainant and the Licensees agreed to participate in ADR to resolve their complaint. On

18th September 2012 the mediator reported that while the parties had met, the complaint was

not settled at mediation. Issues pertaining to the Complainant’s concerns were discussed and the parties agreed that the case be returned to the Authority for determination.

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 and made a decision to enquire further.

1.5. The Committee invited the Licensees to provide a response to the complaint and these were received on 5 November 2012.

1.6. Having satisfied itself that it had completed its inquiry into the complaint, the matter was considered by the Committee on 26th March 2013. 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 listed his property with the Agency on a sole agency and paid $2,711.50 for a two week advertising programme. Marketing was to start on 7 April 2012 with advertisements in the newspaper followed by a second advertisement on 14 April 2012. The marketing cost included 2,000 flyers to be printed and distributed in the area. The marketing of the property was for a two week closed tender process.

2.2. Licensee 1 advertised the property on several websites and in the newspaper. There were some errors made in the newspaper advertisements which were attributable to the newspaper rather

than the licensee. The newspaper compensated for those errors by providing a further two advertisements at no cost to the Complainant. In addition Licensee 1 paid for three further advertisements and provided at his cost flyers for an additional marketing campaign.

2.3. The Complainant in his complaint has listed the following errors in the advertising over a period of six weeks:

• Week 1 Property description details wrong on the website for the agency and other online advertisement companies. It is described as 3 bedrooms and one lounge – the Complainant says there are 3 bedrooms, 2 lounges or 4 bedrooms. The Complainant says the misdescription devalues the property and reduces interest.

• The newspaper printed advertisement describes the property incorrectly – 3 bedrooms,

1 lounge.

• Week 2 the newspaper advertisement still incorrect

• Week 3, no open home or advertising, no offers received during tender.

• Week 4, advertisement in the newspaper cancelled in error, week lost in marketing effort. The Complainant warned Licensee 1 to ensure no further errors in marketing.

• Week 5, Advertisement in the newspaper listed open home viewing by appointment, minimal purchaser viewing as no open home time listed.

• Week 6 Advertisement in the newspaper again listed as 3 bedrooms, 1 lounge.

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 Licensee 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 6 Standards of professional conduct.

6.1. An agent must comply with the fiduciary obligations to his or her client arising as an agent

6.2. A licensee must act in good faith and deal fairly with all parties engaged in a transaction. Rule 9 Client care and dealing with customers.

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

instructions.

4. Discussion

4.1. The Complainant alleges that Licensee 1 failed to act with care and competence with the advertising of his property and failed to adequately compensate him for the errors in marketing the property.

4.2. Licensee 1 in response has stated:

• The Complainant signed the Agency Agreement with the advertising script on 1 April 2012. This script was used on the print marketing in the newspaper on 7 April 2012, and 14 April 2012, plus all the associated websites.

• The home was set up as a 3 bedroom property. He had repeatedly explained to the Complainant that their system and the newspaper only pick up 3 or 4 bedrooms. This was explained clearly to the Complainant in their face to face meetings. He had explained to the Complainant a number of times that neither the company nor he could misrepresent the property to the public.

• All the marketing paid for by the Complainant in the marketing plan was done absolutely correctly and signed off by him. He had used a standard Agency marketing schedule. He can confirm that the Premium Property Site and the V ideo Tour were not crossed out nor were they offered or included by him to the Complainant at any time.

• The advertising after 14 April 2012 was paid for by Licensee 1 only. The Complainant did not contribute anything further. It is Licensee 1’s position and that of the Agency that they will not be refunding any marketing costs after 14 April 2012.

4.3. Licensee 1 provided further information which indicated that as a result of errors in the advertising by the newspaper, the newspaper had provided a credit for two further advertisements of the property as compensation.

4.4. Licensee 1 also provided a spreadsheet which detailed the advertisements and marketing paid for by him and indicated: “I have gone out of my way with the Complainant given my friendship with him. The advertising errors with the newspaper were not paid for by the Complainant but by me. This is the first and only vendor that I have paid for marketing out of my own pocket. I have worked the property hard in the selling process to sell it, given plenty of feedback confirming that the Vendor’s price expectations were set too high – hence why didn’t it sell or any offers come in at all.”

4.5. In relation to Licensee 2 the Complainant alleges that he failed to adequately respond and address the concerns that he had raised in order that the complaint could be resolved in accordance with the ‘in-house’ procedures.

4.6. Licensee 2 in response has stated:

• The Complainant emailed him and in response to that email, “I immediately called Licensee 1 to meet and discuss this complaint. The details Licensee 1 supplied (agency agreement and marketing schedule attached) and the discussions we had, I was satisfied that he had acted in accordance with the agency agreement and marketing schedule as agreed and signed by the Complainant. I responded accordingly to the Complainant.”

• “The Complainant was not satisfied with my response and also asked to be released from the agency agreement. I responded that any cancellation would need to be done through Licensee 1 and to reach agreement with him”

• “The marketing of the property was a 2 week Closed Tender process. This was paid for by the Complainant, all other marketing thereafter was paid for by Licensee 1. I note the Agency Agreement contained details pertaining to the number of bedrooms and specifically an advertising script which the Complainant agreed to by signing.”

• “These points were clarified by Licensee 1 to the Complainant.’

• “I have no hesitation in confirming the good conduct of Licensee 1 in accordance with the signed Agency Agreement and Marketing Schedule. The meeting that I had with Licensee 1 also confirmed that.”

• “In accordance with the Agency “In-House Complaints and Disputes Resolution Procedures the following was carried out: Step 2 – response was in writing (email), step 3 – I gave a written proposal to the Complainant that any cancellation of agreement would have to be done through Licensee 1.”

• “My actions have been in accordance with our complaints process and in a manner as designed

to provide a simple and personalised process to resolve.”

4.7. In regard to the complaint about advertising the Complainant stated “I do not believe an agency should be allowed to portray that they have no liability for the faults of their sub contractors (i.e. newspapers and websites). If errors happen the Real estate company should admit full liability to the vendor, refund monies and deal with the issue with their sub contractors separately”. The Committee noted that the advertising budget paid for by the Complainant was for a two week marketing plan. The Licensee acknowledges that there had been errors in advertising in the newspaper which had been addressed. The result of this was that the Complainant received a further two free advertisements and Licensee 1 paid for a further three advertisements in the newspaper. In addition Licensee 1 paid for a further 2,000 flyers

promoting the Complainant’s property.

4.8. The other issue raised by the Complainant was about incorrect wording in one or more of the advertisements for his property in relation to the number of bedrooms at the property. The Committee reviewed the newspaper advertisements against the agency agreement which contained the text of the planned advertisement and are at a loss to understand the Complainant’s concern. The newspaper advertisements correctly described the property as having 3-/ 4 bedrooms, separate lounge etc. In addition the Committee reviewed the weekly reports of Open Home attendances and noted that despite some errors e.g. no time listed in the newspaper for the open home of 5 May 2012 there were in fact 7 groups who visited the property.

4.9. The Committee has concluded from the information before it that Licensee 1 has acted appropriately to address the concerns raised by the Complainant. Whilst the Committee can understand the frustration felt by the Complainant as to incorrect advertisements, it is the view of the Committee that the response from Licensee 1 was commendable. He has taken personal responsibility and addressed the issues with urgency and at his own personal cost. On the facts before it the Committee does not consider it would have been appropriate for Licensee 1 to refund the marketing budget as was the demand of the Complainant.

4.10. The Committee also considers the approach taken by the Agent Licensee to the concerns raised by the Complainant was appropriate in the circumstances.

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 have concluded that there is insufficient clear evidence for it to conclude that the Licensees 1 and 2 could be considered guilty of unsatisfactory conduct in terms of section 72 or misconduct in terms of section 73. Accordingly 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

Patrick Waite

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 15th April 2013