Complaint No C00577 [2013] NZREAA 97 (30 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: C00577

In the Matter of Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 30th day of May 2013

Complaints Assessment Committee: CAC20004

Chairperson: Michael Vallant Deputy Chairperson: Paul Morton 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 (“the Authority”) about the conduct of the Licensee. The Licensee is licensed under the Real Estate Agents Act 2008 (“the Act”).

1.2 The complaint is that in 2009 (well before the Act came into force in November 2009) the Licensee issued the Complainant with an invoice for body corporate levies on a carpark lease dating back to the period from 1 May 2005 to 7 February 2007, totalling $1,316.19.

1.3 The Complainant had leased the carpark out to a tenant under a commercial lease under which the tenant was responsible for payment of the body corporate levy.

1.4 The lease however ended on 30 October 2008 and the Complainant was unable to recover costs from the tenant of the lease that ended in 2008.

1.5 For the reasons set out in this decision, the Committee has decided to dismiss the complaint.

2. Material Facts

2.1 The Complainant is the owner of a unit which has two car parks attached to it. The Complainant leased the car parks out under a commercial lease. Pursuant to that lease, the tenant of the car park was liable for the body corporate levy.

2.2 The unit and the car parks formed part of a body corporate managed in 2009 by the Company.

2.3 From time to time, the Complainant received invoices for body corporate fees which it assumed related to both car parks.

2.4 In 2009 however, the body corporate became aware that one of the car parks had incorrectly been identified as being owned by the Trust.

2.5 In April 2009, the Company (not, we note, the Licensee) invoiced the Complainant for the period between 1 May 2007 and 7 February 2009 for the carpark that had not previously been levied.

2.5 Unfortunately, the lease on the carpark in question had been terminated on 30 October 2008 and the Complainant was unable to recover the body corporate levy from the tenant.

2.6 The Complainant alleges that the Licensee has been negligent and should be responsible for the losses that the Complainant has suffered due to its inability to obtain reimbursement of the body corporate levy from the previous tenant.

2.7 The Licensee however, does not accept that it has been negligent and maintains that the Complainant has to pay the outstanding body corporate levy. The Complainant has refused to pay the levy and as a result is unable to attend and/or vote at body corporate meetings until it has paid the outstanding levy.

2.8 In an attempt to resolve the matter, the Complainant took the matter to the Disputes Tribunal in

2010. The Disputes Tribunal held that it did not have any jurisdiction in this matter and could not resolve the matter. At that time any disputes relating to the Unit Titles Act 1972 could only be dealt with by the High Court. The Complainant's view was that the costs would be prohibitive to take this matter to the High Court.

2.9 The Complainant has now applied to the Authority for resolution and redress of this matter.

3. Relevant Provisions

3.1 The Complaints Assessment Committee (“the Committee”) is of the view that the following sections of the Act apply to this matter:

3.2 Pursuant to section 4 of the Act, real estate agency work or agency work is defined as:

real estate agency work or agency work—

(a) means any work done or services provided, in trade, on behalf of another person for the purpose of bringing about a transaction; and

(b) includes any work done by a branch manager or salesperson under the direction of, or on behalf of an agent to enable the agent to do the work or provide the services described in paragraph (a); but

(c) does not include—

(i) the provision of general advice or materials to assist owners to locate and negotiate with potential buyers; or

(ii) the publication of newspapers, journals, magazines, or websites that include advertisements for the sale or other disposal of any land or business; or

(iii) the broadcasting of television or radio programmes that include advertisements for the sale or other disposal of any land or business; or

(iv) the lending of money on mortgage or otherwise; or

(v) the provision of investment advice; or

(vi) the provision of conveyancing services within the meaning of the Lawyers and

Conveyancers Act 2006

3.3 Pursuant to section 4 of the Act, transaction is defined as:

transaction means any 1 or more of the following:

(a) the sale, purchase, or other disposal or acquisition of a freehold estate or interest in land: (b) the grant, sale, purchase, or other disposal or acquisition of a leasehold estate or interest

in land (other than a tenancy to which the Residential Tenancies Act 1986 applies):

(c) the grant, sale, purchase, or other disposal or acquisition of a licence that is registrable under the Land Transfer Act 1952:

(d) the grant, sale, purchase, or other disposal or acquisition of an occupation right agreement within the meaning of the Retirement Villages Act 2003:

(e) the sale, purchase, or other disposal or acquisition of any business (either with or without any interest in land).

3.4 Pursuant to section 72 of the Act, unsatisfactory conduct is defined as:

For the purposes of this Act, a licensee is guilty of unsatisfactory conduct if the licens ee 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.

4. Discussion

4.1 There are two insuperable difficulties facing the Complainant. The first is that the Complainant has named the wrong company in the complaint. The company which issued the original invoice and which the Complainant ought to have named is not a licensee. The second is that the Committee has no jurisdiction in any event, because the conduct here is not “real estate agency work”.

4.2 Although the letter of complaint dated 5 February 2013 says the complaint is against the

Licensee, the complaint can only be against the company that issued the invoice.

4.3 There were two companies in existence at the time.

4.4 The April 2009 invoice was issued by the Second Company. It is not a licensee. The Committee has no jurisdiction to investigate its conduct under the Act. On that ground alone, the complaint must fail.

4.5 The second difficulty facing the Complainant is that, for the Committee to have jurisdiction, it must find that the work undertaken by a Licensee comes within the definition of real estate agency work. Essentially real estate agency work must be work that relates to the bringing about of a “transaction”.

4.6 A transaction is defined as the sale, purchase, or other disposal or acquisition of freehold estate or interest in land. It is clear from the facts that this case has nothing to do with the acquisition or disposal of land. The dispute between the parties on the facts of this case is about the management of land by a body corporate company.

4.7 There is nothing in the facts of this case that the Committee can identify which suggests that the actions of the company that issued the invoice had anything to do with real estate agency work or a transaction, as defined by the Act. Property management on behalf of a body corporate is similar to rental property management on behalf of a landlord. There are numerous Complaints Assessment Committee decisions which make it clear that Committees cannot scrutinise the conduct of licensees managing a rental property, since they do not come within the jurisdiction of the Act.

4.8 Even if the company that issued the invoice in this case was a licensee, it would have to be treated in the same manner as a licensee managing a rental property.

4.9 The Committee therefore has no jurisdiction to rule on this matter in any event, and the complaint must be dismissed.

4.10 In saying that, the Committee has some sympathy for the Complainant which must feel that it has no avenue for redress in this matter. The Committee notes that under the new Unit Titles Act

2010, matters such as this now fall within the jurisdiction of the Tenancy Tribunal, which may be

the appropriate forum in which the Complainant can seek redress.

5. Decision

5.1 The Committee met to consider the complaint and pursuant to section 79(2)(e) determined to inquire into it. Pursuant to section 80(2) the Committee has, at its discretion, decided to take no further action with regard to the complaint, because in the course of the investigation of the complaint, it appears to the Committee that, having regard to all the circumstances of the case, any further action is unnecessary or inappropriate.

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

Michael Vallant

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 30 May 2013