Complaint No C00745 [2013] NZREAA 85 (14 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: C00745

In the Matter of Licensee 1

Licence Number: XXXXXXXX

And

In the Matter of Complaint No: CB7008131

In the Matter of Agency

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 14th day of May 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 Complainants have complained to the Real Estate Agents Authority (the Authority) about the conduct of the Licensee and the Agent Licensee. The Licensee holds a salesperson’s licence and works for the Agent Licensee.

1.2 The Complainants maintain that the Licensee;

1. failed to provide a written appraisal and related sales evidence, when listing the Property for sale
   
2. influenced the Complainant’s decision to list by over estimating the prospective sale price for the Property
   

c) failed to seek approval for the content of a sales brochure after promising to do so

4. negatively influenced prospective purchasers of the Property by publishing a low and disputed capital value (CV) on a sales brochure
   
5. failed to present the Complainants with an offer made under the terms of the tender sales process.
   
6. obliged the Complainants to be present at open homes in order to show the tenanted portion of the Property to prospective purchasers.
   

1.3 The Complainants believe they have suffered real and significant financial losses as a result of the Licensee’s breach of various provisions of the Real Estate Agents Act 2008 (the Act).

1.4 The Complainant’s maintain that they have suffered considerable stress due to the Agent

Licensee’s protracted failure to resolve matters to their satisfaction.

1.5 The complaint was received by the Authority on 9 August 2012 and referred to a Complaints

Assessment Committee (the Committee). The Committee considered the complaint on 7

September 2012 and determined to enquire into the complaint. The Committee received and considered an investigation report on 28 March 2013.

2. Material Facts

2.1 The Licensee first listed the Property for sale on behalf of the Complainants on 11 June 2007.

The Property did not sell and was withdrawn from the market approximately 3 months later.

2.2 The Licensee approached the Complainants with a marketing opportunity and on 20 February

2011 the Property was featured in an American television series. The Property was presented by the Licensee and $1.5m was suggested as an approximate value.

2.3 On 27 June 2011 the Property was appraised for sale by a colleague of the Licensee. A

comparative market analysis was completed with an estimated value range of $1.2m to $1.4m.

2.4 On 20 October 2011 the Licensee met with the Complainants and listed the Property for sale by tender, closing 2 December 2011.

2.5 The Complainants commissioned a registered valuation which was completed on 4 November

2011. The indicated current market level was shown as $1.2m.

2.6 An offer of $1,077,777 was received at tender and declined by the Complainants.

2.7 On 23 January 2012 the Property was listed with different agency and sold for $1.1m on 5 March

2012.

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.

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 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.

3.4 Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009. (the Rules)

Rule 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.

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

the client’s instructions unless to do so would be contrary to law.

Rule 9.5 An appraisal of land or a business must be provided in writing to a client by a licensee; must realistically reflect current market conditions; and must be supported by comparable information on sales of similar land in similar locations or businesses.

Rule 9.7 A licensee must not mislead customers as to the price expectations of the client.

Rule 9.13 A licensee must submit to the client all offers concerning the sale, purchase, or other disposal of any land or business, provided that such offers are in writing.

4. Discussion

4.1 The Complainants maintain that when listing their Property for sale on 20 October 2011, the Licensee was in effect reappraising the Property and should have provided them with a written market analysis and relative sales evidence.

4.2 The Licensee maintains that the Complainants were in possession of a property appraisal recently carried out by another salesperson from the agency and at the time of listing the Complainants appeared satisfied that an appraisal had been completed as required by the Act. The appraisal indicated $1.2m to $1.4m as a prospective sale figure.

4.3 The property listing form provided to the Committee shows an appraisal figure of $1.5m and an estimate of commission payable based on that sum. The form also indicates ‘tender’ as the sales method and a search indicator range for internet based marketing, of $1.1m to $1.5m. The completed listing agreement was signed by both the Licensee and the Complainant.

4.4 The Licensee maintains that the figure of $1.5m was not so much an appraised sum but more an indication from the Complainants of their ideal selling price.

4.5 Whilst a new appraisal and sales evidence was not provided by the Licensee at the time of relisting the Property, the Committee believe that the position maintained by the Licensee is reasonable in the circumstances and the listing agreement was authorised by the Complainants after due consideration of the appraisal conducted by the agency just 4 months prior. The Committee has determined to exercise its discretion and take no further action on this aspect of the complaint.

4.6 The Complainants maintain that they were influenced to list the Property because the Licensee appraised the Property at $1.5m and that this figure subsequently proved to be an over estimation. The Complainants submit that a value of $1.5m was mentioned by the Licensee whilst filming in February 2011.

4.7 The Licensee maintains that the figure of $1.5m suggested in the American television show was a made up value and that all parties understood the programme to be just a story. Further, the Licensee does not believe the Complainants would have been particularly influenced by the TV program because in August 2010, well before the episode was filmed, the Complainants were indicating an expected sale value of $1.6m for their property.

4.8 The Licensee maintains that the figure of $1.5m was what the Complainants insisted on trying to achieve for the Property. The Licensee maintains that at the time of listing, lengthy discussions took place with regard to price indications for the Property based on the amount of work the Complainants had done to the Property and the appraisal that had been completed in June 2011

– the TV show and the price mentioned on it were not discussed.

4.9 The Complainants believe that the Licensee was in breach of her obligations to them when she failed to submit the sales brochure to them for proofing. The Complainants believe that the inclusion of the CV at $910,000 would not have been approved by them as it was under dispute at the time and would negatively impact on prospective purchasers.

4.10 The Licensee maintains that all advertising text was run past the Complainants first and that the brochure did not contain any additional wording requiring proofing. The CV was included on the second page amongst other acknowledged property details such as construction, chattels, rates and legal description. The Licensee does not believe that statements of fact would either inadvertently or otherwise, give an impression of a vendor’s price expectations.

4.11 The Licensee states that discussions took place regarding the unhelpful CV and the Complainants were encouraged to commission an independent registered valuation as an aid to disputing the CV and a sales tool to help educate prospective purchasers.

4.12 The Licensee’s rationale and conduct seem reasonable to the Committee.

4.13 The Complainants maintain that the Licensee failed to present them with an offer made under the terms of the tender sales process.

4.14 The Licensee maintains that at the closing of the prescribed tender marketing period, the Complainants were contacted by telephone and gave instructions to the Licensee to open and disclose the terms of the one offer in hand.

4.15 The Licensee maintains that the Complainants then declined the offer and stated that due to the unacceptable level of the offer and the fact that the second vendor was absent, there was no point in the Licensee bringing the documents to the Complainant.

4.16 The Act states that all offers on property must be in writing but it is silent on how agreements may be presented to property owners. Presentation by telephone whilst not always ideal does seem to be in the normal course of real estate work.

4.17 The Complainant maintains that by not having a second salesperson in attendance, the Licensee obliged the Complainants to be present at open homes in order to show the tenanted portion of the Property to prospective purchasers.

4.18 The Licensee maintains that there was never an intention to have two salespeople present at open homes and it came as a surprise that the Complainants offered to remain in the tenanted dwelling during the course of the open homes.

4.19 The Complainants do not believe that the Agent Licensee has made reasonable efforts to resolve the issues raised by the Complainants.

4.20 On 14 June 2012 the Complainants communicated their concerns about the conduct of the

Licensee to the Agent Licensee.

4.21 Reference has been made by the Agent Licensee to initially responding on 19 June 2012. The

Committee was not provided a copy of this correspondence by either party.

4.22 The Complainants sent further correspondence to the Agent Licensee who responded on 25

June 2012.

4.23 A complaint was made to the Authority on 29 July 2012.

4.24 The responses from the Agent Licensee do appear to attempt to answer and at times refute the

Complainant’s allegations, in reasonably comprehensive detail.

4.25 After reviewing all submissions and material evidence, the Committee can determine no evidence of unsatisfactory conduct or misconduct, on the part of the Licensee or the Agent Licensee.

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 complaints or any issue involved in the complaints.

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. 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: 14 May 2013