Complaint No CB7161608 [2013] NZREAA 96 (29 May 2013)

Last Updated: 3 May 2014

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

And

In the Matter of Complaint No: CB7161608; CB7161671; CB7161734

In the Matter of Licensee 1

Licence Number: XXXXXXXX

Licensee 2

Licence Number: XXXXXXXX

Licensee 3

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 29th day of May 2013

Complaints Assessment Committee: CAC20004

Chairperson: Paul Morten Deputy Chairperson: Michael Vallant Panel Member: David Russell

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 The Complainant has complained to the Real Estate Agents Authority about the conduct of three licensees.

1.2 Licensee 1 is the first licensee about whom she complains. She is a salesperson licensed under the Real Estate Agents Act 2008. The second is Licensee 2 (also a salesperson). She first became involved in the property when the first licensee took a holiday (between 5 and 19 August 2012). The third licensee is a licensed agent.

1.3 The three licensees worked at the time for the Agency.

1.4 The Complainant retained the agency when listing her property for sale by negotiation.

1.5 Licensee 1 provided the Complainant with a market appraisal of $850,000-950,000. Offers presented were in the $700,000-755,000 range. The Complainant says that either the market appraisal was misleading; or the true value of the property was not clearly represented to the Purchasers. This is the first aspect of the complaint.

1.6 The Complainant accepted the fifth offer presented to her, at $755,000 (subsequently reduced to

$750,000), which was conditional on a LIM and valuation report. She complains that the Purchasers and several of their tradespeople entered the property with the licensees, without their permission. This is the second aspect of the complaint.

1.7 The Purchaser, a builder, identified drainage issues with the property. Licensee 2 and 3 advised the Complainant that the Purchasers would not be able to complete due diligence unless the Complainants paid for several specialist reports. The Complainant ended up completing much of the due diligence for the Purchasers, and reducing the sale price by $5000.

1.8 She complains that the Licensees harassed and pressured the Complainant and her partner during the sale, were biased, and provided personal opinions (outside their area of expertise) on engineering reports, which delayed the sale of the property. This is the third aspect of the complaint.

1.9 For the reasons set out in this decision, the Committee finds that the complainant has failed to establish that the conduct of any of the licensees breaches the provisions of section 72 of the Act. The complaint is dismissed.

2. Material Facts

2.1 Before listing the property with the Agency on 10 June 2012, the Complainant had marketed the property privately for $920,000.

2.2 The Complainant and her partner had built a house on another property, and were due to move in around July 2012.

2.3 Licensee 1’s appraisal attached a list of sales which covered a variety of lifestyle properties that had been sold in the area. The appraisal recorded that Licensee 1 had considered current market situations when suggesting the price range.

2.4 The Complainant’s lifestyle property had a minor dwelling on it. At the time of sale, local planning rules had changed, and minor dwellings could not be built 50 m away from a main dwelling: they could only be built a maximum of 6 m away. The minor dwelling could have been rented at $380 per week. The first licensee considered those factors helped support her market appraisal.

2.5 Following the listing of the property (on 10 June 2012), five offers were received, all of them

lower than Licensee 1’s appraisal range. They were between $700,000 and $755,000.

2.6 The Complainant counter offered $860,000 in respect of the third offer. There was no counter offer or acceptance. She did the same in respect of the fourth offer. It was not accepted. She accepted a fifth offer of $755,000.

2.7 The sale and purchase agreement was entered into on 8 or 9 August 2012. It was subject to a

LIM report and a valuation.

2.8 Unfortunately, almost 3 weeks went by before the contract finally went unconditional, due to technical issues that had to be resolved, following reports from an array of different experts. We describe just some of the issues and correspondence below.

2.9 On 12 August 2012, the buyers visited the property and expressed concern regarding foundation poles.

2.10 On 13 August 2012, Mr S, a valuer, inspected the property on behalf of the buyer. He noticed water discharge and was concerned about the integrity of foundation poles under the minor dwelling. He wanted structural engineering, geo-tech and drainage reports to be provided, without which he would not be able to complete his valuation.

2.11 On 13 August 2012, the Purchaser arranged for a site visit by an engineer, Mr P.

2.12 On 14 August 2012 information was passed from the seller to the Purchaser regarding a road slump. At that stage Licensee 2, who was assisting with the sale of the property while Licensee 1 was away, believed that the issues the Purchaser had identified related to Council management of water on the property.

2.13 On 15 August 2012, Licensee 2 was told by the Purchaser that the engineer had reported to him on 13 August 2012 that piles on the minor unit might be subject to down-slope creep; and that the discharge of stormwater onto the site was a serious issue which needed to be addressed. The Purchaser had been advised to contact a civil engineer or drainlayer to design a solution.

2.14 Licensee 2 pressed the Purchaser to ask the engineer about the site’s stability, but the engineer required further investigation and stability analysis, estimated to cost up to $2500 plus GST.

2.15 On 15 August 2012, the purchaser invited a drainage company to visit the site to assess and price the necessary remedial work. He had no authority from the complainant to do so.

2.16 Licensee 2 was provided with technical information from the Purchaser which she found challenging to understand. She sought assistance from Licensee 3, who she took on to the site to see the drainage issues first hand.

2.17 On 16 August 2012 the Complainant emailed a full copy of code of compliance certificates for the Property to the Agency. Licensee 2 emailed a report from the engineer, Mr P, to the Complainant. The Complainant (a former storm water officer) offered assistance to resolve drainage problems. She took photos of drainage on site, which she claimed all functioned.

2.18 On 16 August 2012, the buyer emailed the second licensee, and stated he wanted to buy the Property for $755,000, but could not, because the valuer had raised issues in his report, and because of them his bank would only advance mortgage funds once those issues were resolved. The issues were the structural stability of the minor dwelling; and the discharge of stormwater onto ground at the top of the property, instead of below the houses.

2.19 Licensee 2 emailed the Purchaser on 17 August 2012, following a meeting she had had with Licensee 3, and the Complainant. She indicated the sellers were willing to grant an interim extension of the valuation clause in the contract. She noted that the drainage plan tabled was expensive, and it was worthwhile investigating whether a reduction in what was proposed might enable deal to be struck.

2.20 On 17 August 2012, the Purchaser’s Bank confirmed that in terms of the valuation report, it required a structural engineering report on the minor dwelling and any work completed, if required; a geo-tech report and any work completed in terms of drainage issues; and that it wanted all storm water issues to be resolved.

2.21 On Friday 18 August 2012, Mr T, the original structural engineer for the minor dwelling on the Property, reported to the Purchaser regarding the pole platform subfloor of the minor unit. He considered that there was “accelerated soil creep” which needed to be arrested. He recommended certain drainage measures; planting; the installation of correct connectors between joists and bearers; and the installation of a system of tiebacks.

2.22 On 20 August 2012, the Purchaser’s Bank confirmed that the report from Mr T was sufficient, provided works were carried out according to his specifications. A geo-tech report with a stormwater solution and ultimately, production of a producer statement were still necessary. The Bank requested input from a civil engineer which could be incorporated into the geo-tech report.

2.23 On 20 August 2012, the Complainant emailed the first and second licensees that they had some

issues with Mr T’s report. They said that to help the Purchasers go unconditional on 24 August

2012, they were meeting a drainlayer on site to get a quote to undertake drainage works associated with the minor dwelling only; they wanted the Purchaser to undertake the bracing works under the minor dwelling himself, and engage the Complainant’s drainage contractor if the quote was acceptable; and they offered to reduce the sale price by $5000 as a contribution to having all these works completed.

2.24 In the email, they recorded that they had listed the property with a rental agency in case the

Purchasers could not go unconditional on Friday.

2.25 Licensee 1 replied, setting out the Bank’s technical report requirements. She stated that proceeding with the reports would be advantageous to the sellers, because the sellers would have the opportunity to share costs with the buyer, and the buyer remained interested in

purchasing the property.

2.26 The Complainant stated she needed more clarification from the Purchaser’s bank, and asked for a contact person with whom she could talk. Licensee 1 said she could not disclose that (for privacy reasons), but she would seek clarification. The Complainant responded that if no clarification was provided, the sellers would not go ahead with any works, as they had no guarantee what was going to be acceptable.

2.27 On the same day, at 5.20 p.m., Licensee 2 reported she had just come back from the Bank, who “gave a good level of comfort”, and that she would talk the sellers through putting this together, “for all to be protected”.

2.28 On 21 August 2012, the Complainant copied to Licensee 2 the original engineering geology report prepared by Mr P for the original developer. She advised that Mr P stated verbally that as long as the works were completed as per his original recommendations, then he would be satisfied. The only works that had not been completed were an extension of a culvert down into the gulley. She said she had engaged a registered drainlayer to undertake these works.

2.29 The second licensee replied and stated that the bank would need evidence “from independent experts” that what was proposed was adequate. She suggested Mr T put something in writing to confirm there was no need for a geotechnical report. She said she believed a civil engineer would need to say that reinstating drainage detailed on the original plan was adequate.

2.30 Later that day, Licensee 1 emailed the Purchasers again, and asked how they were getting on with obtaining something in writing from Mr T. She advised that the Purchasers now wanted to delay settlement for two weeks, to allow more time to get things done.

2.31 Later on 21 August 2012, the Complainant forwarded written information from Mr T to the Agency. She said she would be pricing stormwater requirements. She asked that all this information be forwarded to the bank and the valuer, for confirmation that they had all information that was needed.

2.32 Licensee 1 replied, saying she had just spoken with Mr T regarding the need to get a geotechnical report, and that he had told her that was not his call, though that was not stated in his written material. She said the bank was still insisting on obtaining a geotechnical report.

2.33 Later that day, Licensee 2 forwarded copies of relevant emails direct to the Purchaser’s Bank.

2.34 Numerous emails were exchanged between the licensees, the Purchasers, the Purchasers’ Bank, and various experts over the next few days. We do not attempt to describe them all.

2.35 On the evening of 21 August 2012, Licensee 1 advised the Complainants that the Bank still required a geotechnical report, and that no short cuts would be accepted. The Complainants debated the need for a geotechnical report. At 9.30 p.m. that night, Licensee 2 said that the agency’s recommendation was that the sellers have a geo-tech report done; have a structural engineering design completed for the bracing; and engage a civil engineer to draw up a design plan, following which a drainlayer could be engaged to perform against the civil engineer’s design.

2.36 On 22 August 2012, the bank confirmed with Licensee 2 that a geotechnical report was still required, information she faithfully passed to the complainants, the first licensee and the third licensee.

2.37 On 22 August 2012, the complainant obtained a report from Mr S, regarding stormwater issues on the property. Mr S was a social friend of the Complainants, and apparently carried out his inspection and prepared his report without charge.

2.38 There was debate between the Licensees and the sellers that day about the terms of Mr S’s technical report. Issues concerned whether it needed to be signed; and whether it needed recommendations.

2.39 At 6.20 p.m. that night, Licensee 1 reported to the other Licensees that given the seller’s impression there was nothing wrong with the drainage or soil composition, a round table meeting was needed to move the deal forward.

2.40 On 23 August 2012, at 7.36 a.m., Licensee 2 reported to the other Licensees that she had just spoken to the Purchaser. The Purchaser had received from the Complainant’s husband the report by Mr S, which she described as a joke and woefully inadequate. Unless they intended to remedy matters, the Purchaser indicated he would “move on”.

2.41 Later that day, Licensee 2 reported to the other Licensees that the Purchaser had talked to the Complainant’s husband, and the parties had now reached agreement on how to progress matters. Ultimately, the parties agreed to split the cost of the geo-tech report 50-50. The sellers agreed to extend the unconditional date and settlement date by a week.

2.42 On 31 August 2012, Licensee 2 was able to confirm that the Purchaser had agreed to variations to the contract with respect to price adjustment and his contribution to the geotechnical report; that the bank had passed the valuation; and that the Purchaser’s Bank was waiting on his lawyer to send the final version of the sale and purchase agreement to the Bank for their records, before the credit department could officially sign off on the deal.

2.43 The agreement was confirmed, and in due course in early September, the sale and purchase was finally settled.

3. Relevant Provisions

3.1 Section 72 of the Act defines what constitutes “unsatisfactory conduct”. It provides as follows:

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.

3.2 Relevant rules from the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009 (the Rules) are as follows:

5.1 A licensee must exercise skill, care, competence, and diligence at all times when carrying out real estate agency work.

5.2 A licensee must have a sound knowledge of the Act, regulations made pursuant to the Act, rules issued by the Authority (including these rules) and other legislation relevant to real estate agency work.

6.2 A licensee must act in good faith and deal fairly with all parties engaged in a transaction.

6.3 A licensee must not engage in any conduct likely to bring the industry into disrepute.

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.

9.2 A licensee must not engage in any conduct that would put a client, prospective client or customer under undue or unfair pressure.

9.4 A licensee must communicate regularly and in a timely manner and keep the client well informed of matters relevant to the client's interest.

Appraisals and pricing

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.

4. Discussion

4.1 The complainant bears the onus of establishing a complaint, on the balance of probabilities:

Hodgson v CAC & Arnold [2011] NZREADT 03.

WAS THE APPRAISAL MISLEADING?

4.2 The Complainant invites the Committee to conclude that because the fifth offer the Complainant and her husband accepted was for $755,000, that meant that Licensee 1’s market appraisal of between $850,000 and 950,000 was misleading; or alternatively it meant that the Licensees failed to represent the true value of the property to prospective purchasers. Neither conclusion is justifiable on the facts.

4.3 The Complainant presents no independent evidence to support her assertion that the appraisal did not realistically reflect current market conditions. There is no evidence that the “comparable information on sales of similar land in similar locations” that a licensee is obliged to provide in support of an appraisal was somehow erroneous.

4.4 The appraisal properly included a list of sales that covered a variety of lifestyle properties that

Licensee 1 said had sold in the area.

4.5 Licensee 1 has provided the Committee with a comprehensive submission explaining how she arrived at the appraisal, with supporting comparable values in the general area.

the value of such a property, as no two lifestyle properties are the same.

4.7 Licensee 1 suggests that the value of the minor dwelling, and its distance from the main dwelling, were factors that supported her appraisal range.

4.8 In the Committee’s view, the fact that there were no buyers in the market prepared to make an offer in the appraisal range indicated by Licensee 1 does not establish that the appraisal range was faulty.

4.9 The Committee notes that the Complainant and her husband were under considerable pressure to enter into the sale and purchase agreement in August 2012. They had listed the property in June. They were due to move into the new house they had built in July 2012. This was the fifth offer made on the property. Were it not for the need to effect a sale, the Complainant and her husband might have been able to test the market for a longer period of time, and it may well be that they would have achieved a better price.

4.10 Issues identified by the Purchaser, who was a builder, are likely to have complicated any further marketing of the property. Drainage problems, potential land stability difficulties, and the “down-hill creep” affecting the minor building were matters that the agency would have been obliged to disclose to prospective future purchasers.

4.11 As to the suggestion that Licensee 1, or indeed the Agency, failed to properly represent the true value of the property to Purchasers, that is an assertion made by the Complainant without any evidence other than the “fact” that the Complainant and her husband accepted an offer on the property that was $95,000 below the bottom end of the first licensee’s appraisal range.

4.12 More information than that is needed before the Committee would be prepared to make a serious finding that a Licensee had committed unsatisfactory conduct by intentionally underselling a property that they were marketing on behalf of the client.

4.13 This aspect of the complaint has not been proved, and is dismissed.

ACCESS TO THE PROPERTY WITHOUT APPROVAL

4.14 The Complainant says that the Purchaser invited a drainlayer to the property, without her permission, leading to a quotation by the drain-layer for $15,000 to remedy drainage issues that the Purchaser had identified.

4.15 An inspection by a Purchaser or consultants hired by a Purchaser should never be carried out

without an owner’s express permission.

4.16 The Complainant does not say that it was the Licensee that permitted the Purchaser and his drain layer to attend the Property.

4.17 There is no evidence that any of the Licensees breached their obligations under the Rules in this regard. There is no evidence linking this visit by the drain layer and the Purchaser to the licensees.

4.18 It follows that this aspect of the complaint has not been proved.

HARASSMENT AND PRESSURE DURING THE SALES PROCESS; BIAS AND INAPPROPRIATE PERSONAL OPINIONS EXPRESSED ON TECHNICAL REPORTS; THE PROVISION OF INFORMATION

TO THE PURCHASER’S BANK WITHOUT PERMISSION; FAILURE TO FORWARD MR S’S REPORT WHEN INSTRUCTED TO DO SO:

4.19 The Complainant says that she engaged her own engineer (Mr S) to make comments on the drainage issues raised by the Purchaser. Mr S identified one small drain that needed digging out. He believed there were no drainage issues on site. The Complainant submitted this report to Licensee 1, requesting that it be forwarded to the bank immediately so that matters could proceed.

4.20 The Complainant states that Licensee 1 told her that in her opinion the bank would not accept the report as it was inaccurate. She resisted forwarding the report to the Bank until the report was amended to include a closing statement, and a signature.

4.21 The Complainant says that Licensee 1 required the Complainant to instruct her contractor to undertake various changes, prior to the first licensee agreeing even to submit the report to her manager.

4.22 The Complainant says that the report was amended accordingly, but Licensee 1 still declined to forward it to the Bank. That was because Licensee 1’s Manager, the third licensee, had told her not to do so.

4.23 The Complainant states that when she contacted Licensee 3, he told her that he did not accept Mr S’s report, as he believed it was wrong, and that in the third licensee’s opinion there were substantial drainage issues on the site.

4.24 The Complainant says that she and her husband told Licensee that he had no expertise in civil engineering, and requested that he submit the report to the Bank and allow the Bank to advise whether the report was satisfactory. She says that led to a lengthy and heated discussion, and that Licensee 3 begrudgingly agreed to submit the report to the Bank, who then accepted it.

4.25 The Complainant says that she challenged the need for a geotechnical report, but that Licensee 2 emailed the Bank directly, without her permission, stating that she would ensure that the Complainant provided the bank with a geotechnical report.

4.26 The Complainant states that these delays forced the Complainant and her husband to deal direct with the Purchaser. When they told the Purchaser that they were not prepared to obtain a geotechnical report, they say that the Purchaser blackmailed them. He threatened to report them to the Local City Council, and to ensure that the minor dwelling was condemned.

4.27 Ultimately the parties agreed that they would share the cost of a geotechnical engineer, who reported that site stability had not changed from when the original geotechnical report had been carried out 13 years before.

4.28 The Complainant states that Licensee 2 would tell her of issues to the Property, and what information was needed to satisfy the Purchaser’s Bank, but that when she asked what information was needed, Licensee 2 would guess and the Complainant would respond with information from Council files, only to be told that that information was not satisfactory.

4.29 Licensee 1 says she was reluctant to pass on the engineer’s initial report, because it appeared that something had been missing. The report said there were “several recommendations”, but it mentioned only two particular “points”, rather than recommendations.

4.30 Licensee 2 says that the core issue was that although the property had a code of compliance certificate, what was on-site differed from the consent conditions in terms of on-site water/drainage management; and the minor dwelling required structural bracing. It was the valuer who refused to make a valuation until he obtained opinions from various different experts.

4.31 Licensee 2 says she could just have left the issues to the parties’ respective lawyers to resolve.

She says she chose to become heavily involved, once she became aware of the complexities, in order to give the Purchaser the confidence to proceed with the sale. Once she made that decision, considerable dedication was required on her part first to understand the situation, and then to assist the parties to negotiate their way through the issues that arose.

4.32 She denies that her involvement, or indeed the involvement by any of the Licensees, constituted “harassment” of the Complainant or her partner. She says that she thought the Complainant was in a financial bind, and couldn’t afford to let things “string out” much longer, in case she lost the sale. She says she and Licensee 3 had the same motive: they were simply trying to facilitate the sale, and to ensure that succeeded as best they could.

4.33 Licensee 3 says that when he first visited the property, just after it was listed, a number of his team commented on the volume of water that came from the road into an open drain, and was then piped under the driveway to discharge into the bush. There was a lot of surface water around both the main house and the minor dwelling.

4.34 He says his first meeting with the Complainant, on 17 August 2012, involved a wide ranging discussion on the issues it had been identified, and how to satisfy the valuer, so he could complete his valuation. He says the meeting was amicable, and at no time did the Licensees apply pressure to the Complainant.

4.35 He says he advised the Complainant that although liability for the code compliance certificate rested with the council, the cost and complexity of pursuing the council was not practical and was not a realistic solution to the issues the Complainant was facing. He pointed out to the Complainant that whether or not this particular Purchaser went ahead, the issues identified would remain, and would need to be resolved as they were a potential defect or risk to the property.

4.36 In relation to the engineer’s report, Licensee 3 states that in his view the report did not address all of the issues that had been raised. The report, in his view, commented on just one small element, and he considered that the conclusion that nothing needed to be done was unlikely to be well received by the Purchaser.

4.37 Licensee 3 says he was reluctant to send the report direct to the Bank, because he did not want the Bank to think it had been endorsed by the Agency. He says he was prepared to send it direct to the Purchaser, for the Purchaser to forward to the Bank.

4.38 He says he considered that the Licensees had a duty of care to make sure that potential issues in regard to the Property were understood and correctly addressed, particularly in light of recent decisions clearly identifying that Licensees must not rely on information supplied by clients where they have reason to believe there may be underlying defects.

4.39 He states that he never claimed to have an expert opinion in relation to the engineering issues, but makes the point that he has had considerable experience both as a real estate agent, and having completed to lifestyle subdivisions, and built three significant lifestyle properties where

there were extensive stormwater and engineering works to be undertaking. He says that means that he has more than a passing understanding of how these issues often need to be remedied.

4.40 He says that he suggested that one engineer be engaged to carry out a combination geotechnical, engineering and stormwater examination. That way, it would be clear what issues, if any, there were and what was needed to be done to remedy those issues. He says the complainant rejected that proposition.

4.41 The Licensee reiterates that it was the Purchaser and his valuer who raised concerns in regard to the Property, not the Licensees. A lot of the information that the Complainant felt fully satisfied these concerns was not acceptable to the Purchaser, and the Licensees were obliged to reflect that view in their discussions with the Complainant.

4.42 Mr S, has been interviewed by the Authority’s investigator. He said the Complainant, a social friend, invited him to inspect the property. In his opinion, there were a number of solutions available to resolve the water problem. He said he disagreed with the original drainage plan that had been approved by the Council. He thought his alternative plan would have been a better and expedient alternative.

4.43 He said that it made no difference to him whether he was a social friend of the complainant, or whether he was doing a report for no charge: the report gave his opinion as to the most practical solution to the water problem. He seemed quite happy with the suggestion that he changed the “semantics” of the report (to refer to “recommendations”), and for the need to attach a signature to the report.

4.44 We deal first with the allegations of harassment and pressure, and the failure to forward the report to the Bank when instructed to do so. The pressure that Rule 9.2 prohibits is “undue or unfair pressure”. It is implicit that pressure that is not undue or unfair it is permissible.

4.45 It is well known that the sale of a house rates high on the list of stressful activities that we undergo in life.

4.46 The Committee does not consider that the Complainant has established that the pressure that they were subjected to as a result of the discovery of drainage and structural issues could properly be described as pressure that was brought about by the Licensees.

4.47 But for the drainage and structural issues identified by the purchaser, the Committee considers it likely that there would have been an uneventful settlement. But once those issues arose, they had to be dealt with, or (as the Purchaser threatened) the contract would have been lost.

4.48 The Complainant and her partner had already built another property, and were due to move into it within a couple of months of listing their property for sale with the Agency. That self-imposed timeframe on its own must have increased the pressure on the Complainant considerably.

4.49 It is fair to assume that the reason why the Complainant and her partner accepted the offer of

$755,000 (well below the $920,000 that they had privately marketed the property at) was because they were committed to the sale going through, to relieve any financial pressure they were suffering from.

4.50 The Complainant must have been dismayed to find the sale put at risk by issues discovered by the Purchaser, particularly when the property had received a code compliance certificate from the controlling council.

4.51 Given the financial circumstances of the Purchaser, the Licensees elected to assist the Complainant as best they could to find a solution to the problems that had arisen. We do not consider the Licensees can be criticised for that.

4.52 The engineer, Mr S, does not appear to think that there was anything untoward in suggestions made by the Licensees that he edit his report, or that he sign it. The Committee does not think so either.

4.53 Licensee 3 says that he was prepared to pass the engineer’s report direct to the Purchaser, but was reluctant to pass it to the Purchaser’s Bank, because of concerns that that might be regarded as an endorsement of the report by the Agency. The Complainant, in her reply to the information provided to the Authority by the Licensees, does not dispute that.

4.54 Although the reluctance to pass on the report because of fears about perceived endorsement seems a little precious, we can understand that recent decisions under the new legislation may make licensees a little nervous about the performance of their new obligations under the Act and the Rules.

4.55 The report was amended. There seems to have been minimal delay. The Agency then forwarded the report to the Bank, which accepted it. We don’t know whether the report was accepted because of the amendments were made to it; or whether the Bank (and the valuer) would have accepted it regardless.

4.56 The Committee is not prepared to find that the initial reluctance to pass on the report, unaltered, constituted the imposition of undue or unfair pressure on the Complainants.

4.57 Harassment is commonly understood as behaviour that is intended to disturb or upset. Typically, it is repetitive. The Committee does not consider that the conduct of the Licensees in relation to that report, or throughout this transaction generally, somehow constitutes “harassment” of the Complainant and her partner.

4.58 We deal next with the allegation of bias and inappropriate opinions being expressed about professional reports. We do not consider that the complainant has established “bias” (inclination or prejudice for or against one person or group, especially in a way considered to be unfair) by the Licensees against the Complainant, and in favour of the Purchaser. These were issues raised by the valuer and by the Purchaser. The issues had to be worked through, otherwise the contract was going to fall over. We consider that the Licensees tried to work through these issues with the parties as best they could.

4.59 As to the “ inappropriateness” of opinions that were expressed about reports, the Licensees were there to advise the Complainant. Licensee 3 says he had more than passing familiarity with the issues that arose, because of previous commercial and residential transactions he had been involved in. Each of the Licensees, to a greater or lesser extent, appears to have tried to assist the Complainant to satisfy the concerns of the Purchaser by providing balanced and acceptable professional reports. The Committee does not consider that the Complainant has established that that advice was “ inappropriate” or otherwise a breach of the Rules, or section 72 of the Act.

4.60 Finally, we address the allegation that the Licensees provided information direct to the Bank “without permission”. That relates to the suggestion that Licensee 2 told the Bank that a geotechnical report would be provided.

4.61 Context is critical here. The valuer wanted a geotechnical report. The Bank wanted a geotechnical report. The Licensees tried to get Mr T to say that no geotechnical report was required. He refused to do so. The Bank consistently insisted that a geotechnical report was required. See the review in paragraphs 2.22, 2.29, 2.32, and 2.35 above.

4.62 In light of the Bank’s recalcitrant position about requiring a geotechnical report (at least until it got the report) we do not accept that the Licensees provided information to the Bank without authority.

4.63 Standing back, we ask ourselves whether the conduct of the Licensees, either individually or as a whole, somehow falls foul of the “unsatisfactory conduct” provisions contained in section 72 of the Act. We have carefully considered all the information supplied to us. In the Committee’s view, no unsatisfactory conduct has been identified.

4.64 The complaint is therefore dismissed.

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

Paul Morten

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 29 May 2013