Complaint No CB7175216 [2013] NZREAA 82 (8 May 2013)

Last Updated: 20 April 2014

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

And

In the Matter of Complaint No: CB7175216

In the Matter of Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 8t h day of May 2013

Complaints Assessment Committee: CAC20008

Chairperson: Graham Rossiter

Deputy Chairperson: Ellen Ryan

Panel Member: Joan Harnett-Kindley

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 a Licensee. The Licensee is licensed under the Real Estate Agents Act 2008 (the Act) and holds a salesperson’s licence. He works for the Compny who trade as the Agency.

1.2 The complaint is that the Licensee arranged for certain repair work to be carried out to a leaking

‘skylight’ of a property, that the Agency was involved in selling, without the agreement or authority of the vendor-client. It is contended that this placed the vendor at risk of having to meet the cost of these repairs.

2. Material Facts

2.1 The Complainant is a beneficiary of an estate, which was a client of the Agency. A number of background matters are addressed in the complaint, which is directed partly against the salesperson referred to in this decision and also a colleague of his in the same firm. The complaint against the other licensee is dealt with in a separate decision.

2.2 The Licensee in this determination had particular dealings with the ultimate purchasers of the property. The Complainant says that the Licensee ‘acted on behalf of the purchaser without due respect for the interests of the client.’ Further, it is suggested that ‘false promises’ were made to the purchasers that repairs would be undertaken to the subject property at the client’s estate’s expense.

2.3 Focusing, as we must, on the essential gravamen of this matter, the essential facts can be briefly stated: there was an issue regarding a damaged skylight in this house. The Licensee had a telephone conversation with the Complainant, on behalf of the estate, as a result of which the Licensee believed that the estate would be meeting the cost of the required repairs. Arrangements were made for those repairs to be carried out and the Licensee sent the relative invoice to the client’s estate’s lawyer.

2.4 As stated above, the Complainant argues that the Licensee acted without the authority of the client and his action in this regard was, therefore, wrongful. It is the issues arising from this contention that the Complaints Assessment Committee (the Committee) has to address.

3. Relevant Provisions

3.1 The relevant law is the definition of ‘unsatisfactory conduct’ in section 72 of the Real Estate

Agents 2008.

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 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 In addition, consideration may need to be given to rule 5.1 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009. Rule 5.1 provides that a ‘licensee must exercise skill, care, competence and diligence at all times when carrying out real estate agency work.’

4. Discussion

4.1 The Licensee, in his response to the complaint says that in the relative telephone conversation with the Complainant, the latter ‘’empathised with the situation’’ and the Licensee’s understanding was that the issue of the repairs to the skylight was resolved, in that the required repairs would be carried out prior to settlement. The Licensee communicated this understanding to the purchasers.

4.2 In reply, the Complainant states that she agreed to a quote being obtained for the skylight repairs but nothing more than that. She did not agree to or commit the estate to meeting the cost of repairs.

4.3 In considering whether there has here been unsatisfactory conduct on the part of the Licensee for the purposes of section 72 of the Act, we ask ourselves the following questions; a) did the agent actually believe that he had authority to arrange the skylight repairs (the answer is clearly

‘’yes’’), and b) did he have a bona fide, arguably reasonable, basis to any such belief? The answer to the second question is probably also yes. It is likely the Complainant did express support for having repairs done to the skylight. The Committee accepts (and has no reason not to) that she did not actually authorise the repairs.

4.4 In the circumstances, there would appear, bluntly, to have been a misunderstanding. Standing back and looking, as we do, at the totality of what happened here, we conclude that a finding of unsatisfactory conduct, on the part of the Licensee, is not justified with respect to the Licensee arranging the repairs of the skylight and, initially at least, having the relative invoice sent to the estate’s lawyer. In this regard, we note that the Licensee, ‘’ultimately,’’ he says, did meet the cost of the repairs himself.

4.5 The arguments in this case as to whether there has been a breach of the Act are somewhat evenly balanced. The Committee would wish to inform the Licensee that he has avoided an adverse finding of unsatisfactory conduct by a rather fine margin. What this case does indicate is the importance of agents ensuring that they have clear and actual authority from clients before committing their clients to expense. A licensee who assumes there is authority to, for example, have work carried out on a property from a verbal conversation clearly does so at his risk.

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 to 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 unless an application for an order preventing publication has been made to the Real Estate Agents Disciplinary Tribunal (Tribunal). Such an application can only be made as part of an appeal to that Tribunal. In order to ensure publication of the decision does not take place it is important that you serve a copy of your application on the Authority. Publication of the decision will not take place until the Tribunal has made a decision on the application.

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

Graham Rossiter

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 8 May 2013