Complaint No CO3468 [2014] NZREAA 102 (16 April 2014)

Last Updated: 3 January 2015

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

And

In the Matter of Complaint No: CO3468

In the Matter of The Licensee

Licence Number: XXXXXXXX

And

In the Matter of The Agency

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 16th day of April 2014

Complaints Assessment Committee: CAC20005

Chairperson: Chris Rogers Deputy Chairperson: Stuart Rose Panel Member: Sandy Gill

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). He holds a salesperson’s licence and at the time of the alleged conduct was working for the Agency.

1.2. The Complainant has complained to the Authority about the conduct of the Agency.

1.3. The Complainant maintains that the Licensee has failed to refund monies needlessly deducted from settlement funds paid to the Complainant by the Agency, after the sale of the Complainant’s property (the Property), in October 2009.

1.4. The Complainant maintains that having acknowledged the Complainant’s concerns, The Agency verbally agreed to facilitate the return of the disputed funds but have not made any efforts to do so.

1.5. The complaint was received by the Real Estate Agents Authority (the Authority) on 9 August 2013 and referred to a Complaints Assessment Committee (the Committee). The Committee considered the complaint on 25 November 2013 and determined to enquire into the complaint. The committee received and considered an investigation report on 28 March 2014.

2. Material Facts

2.1. The Complainant, in his capacity as director of the Vendor Company, listed the Property for sale with the Licensee and the Agency, in October 2009.

2.2. Sometime in October 2009, the Licensee drew a personal cheque for the amount of $2,576.09 in favour of the local territorial authority, in order to assist the Vendor Company in completing a building consent required to validate construction work completed at the Property.

2.3. On 16 October 2009 the Complainant, along with another director of the Vendor Company, authorised the Agency to deduct $2,576.09 from any settlement funds due to the Vendor Company upon the sale of the Property.

2.4. The Property was sold and on 23 October 2009 a settlement statement was generated by the Agency and forwarded to the Vendor Company. The settlement statement detailed the commission charged on the sale, the agreed deduction of $2,576.09 and the balance of deposit funds due to the Vendor Company.

2.5. On 10 April 2013 the Complainant notified The Agency of his concern over the wrongful retention of the funds deducted by the Agency (a separate franchise) in October 2009 and asked for assistance in recovering the funds from the Licensee.

3. Relevant Provisions

3.1. A complaint can only be inquired into by a committee if it relates to alleged unsatisfactory conduct

(section 72 of the Act) or alleged misconduct (section 73 of the Act).

Section 72 of the Act provides for “unsatisfactory conduct” and states as follows:

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;

(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.

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 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...

(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.

Section 172 Allegations about conduct before commencement of this section

1) A Complaints Assessment Committee may consider a complaint, and the Tribunal may hear a charge, against a Licensee or a former Licensee in respect of conduct alleged to have occurred before the commencement of this section but only if the Committee or the Tribunal is satisfied that, -

(a) at the time of the occurrence of the conduct, the Licensee or former Licensee was licensed or approved under the Real Estate Agents Act 1976 and could have been complained about or charged under that Act in respect of that conduct;

(b) the Licensee or former Licensee has not been dealt with under the Real Estate Agents Act

1976 in respect of that conduct

2) If, after investigating a complaint or hearing a charge of the kind referred to in subsection (1), the

Committee or Tribunal finds the Licensee or former Licensee guilty of unsatisfactory conduct, or

of misconduct in respect of conduct that occurred before the commencement of this section, the Committee or the Tribunal may not make, in respect of that person and in respect of that conduct, any order in the nature of a penalty that could not have been made against that person at the time when the conduct occurred.

4. Discussion

4.1. The Complainant maintains that prior to settlement of the Property sale, he discovered that the local territorial authority had already been paid for the building consent and the Licensee’s cheque was therefore not presented but returned to the Licensee.

4.2. The Licensee maintains that it was not until April 2013 that it was brought to his attention by the

Complainant that the cheque he issued in 2009 had not been cashed.

4.3. After examining his account details, the Licensee now concedes that the cheque in question was not presented and he acknowledges a debt to the Complainant of $2,576.09.

4.4. The committee has been provided with copies of correspondence between the Licensee and the Complainant where the Licensee acknowledges the debt but is endeavouring to offset the sum against a purported liability the Complainant has for rent arrears and furniture storage at an unrelated residential tenancy facilitated by the Licensee for the Complainant.

4.5. The owner of the residential property in question has confirmed the Licensee’s position and personal responsibility for the debt, although the Licensee appears to have no connection with the residence other than being the owner’s cousin.

4.6. The Complainant denies liability for the supposed rent arrears and storage costs and is therefore unwilling to enter into any agreement that offsets the $2,576.09 owed by the Licensee.

4.7. The principal officer of the Agency, which closed down in approximately 2010, denies any knowledge or record of the Property transaction in question.

4.8. It seems that the Licensee has acknowledged his personal debt to the Complainant and is in negotiations to; if not immediately return the money, at least credit the Complainant once agreement can be reached over the tenancy issues.

4.9. The Complainant clearly gave authority for the Agency to deduct the funds from the deposit at the time of the Property sale. There is no evidence to show that the Licensee’s conduct was anything but in accordance with the Vendor Company’s instructions.

4.10. The committee can find no compelling evidence of conduct on the part of the Licensee that would initiate further disciplinary enquiry.

4.11. The Agency was not involved in the original transaction and has investigated the Complainant’s

concerns with the Licensee in the interests of assisting a current employee.

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 is satisfied that the requirements of section 172 have been met in that, at the time of the alleged conduct, the Licensee was approved as a salesperson under the Real Estate Agents Act 1976 and that the matter has not been dealt with under that Act.

5.3. 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.

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: 16 April 2014