Complaint No CO4846 [2014] NZREAA 189 (25 June 2014)

Last Updated: 25 February 2015

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

And

In the Matter of Complaint No: CO4846

In the Matter of Licensee One

Licence Number: XXXXXXXX

Licensee Two

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 25th day of June 2014

Complaints Assessment Committee

CAC301

Deputy Chairperson: Patrick Waite

Panel Member: Rex Hadley

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 The Real Estate Agents Authority (the Authority) received a complaint on 25 February 2014 from the Complainant in regard to Licensee One and Licensee Two. Licensee One holds a salesperson’s licence and Licensee Two holds an agent licence. Both work for the Agency.

1.2 The complaint is that on Saturday 22 February 2014 at an auction of one of the Complainant’s properties (the Property) Licensee One entered the auction, approached prospective purchasers/bidders and was seen canvassing her own listings.

1.3 The Complainant is also a licensed salesperson for a different real estate firm than Licensees One and Two.

1.4 The Complainant has included a complaint against Licensee Two who is the supervising agent for

Licensee One.

1.5 The Authority referred the complaint to the Complaints Assessment Committee (the

Committee). Pursuant to section 79(1) of the Act, the Committee considered the complaint on 1

April 2014 and made a decision to enquire further.

1.6 The Committee invited the Licensees to provide a response to the complaint. The Complainant was provided with a copy of these responses and was invited to provide further comment, which was received by the Authority on 28 April 2014.

1.7 Having satisfied itself that it had completed its inquiry into the complaint, the matter was again considered by the Committee on 27 May 2014.

1.8 The hearing was conducted on the papers pursuant to section 90(2) of the Act and the

Committee made its determination on the basis of the written material before it.

2. Material Facts

2.1 Licensee One attended an auction which was being conducted by a competitor real estate firm.

The Complainant states that at a pause in the auction both she and the auctioneer left to speak with the vendors. During this time Licensee One was observed approaching a number of people who had attended the auction. It is alleged that Licensee One was carrying a pen and an agency note pad and she was observed advising people about other properties she had sold or which were coming onto the market.

2.2 The following day the Complainant spoke with her vendors who were angry about the conduct of the person they identified as Licensee One as they felt she was working their buyers at the expense of their advertising.

2.3 Whilst both the the Complainant and Licensee One agree that Licensee One attended an auction being run by the Complainant, had an agency notepad with her and made contact with other parties at the auction, it is disputed by the parties as to what the Licensee’s intentions were.

3. Relevant Provisions

3.1 The Committee examined the information supplied by the Complainant in his written complaint to determine whether section 72 or section 73 of the Real Estate Agents Act 2008 (the Act) applied i.e. was there evidence which would indicate that the Licensee could be considered guilty of unsatisfactory conduct section 72 or misconduct section 73.

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 of 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 wilful 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.

3.2 Real Estate Agents Act (Professional Conduct and Client Care) Rules 2009

The Real Estate Agents Act (Professional Conduct and Care) Rules (the Rules) set out the standard of conduct and client care that agents, branch managers and salespersons (licensees) are required to meet when carrying out real estate work and dealing with clients. Whilst these rules are not meant to be an exhaustive list, they set minimum standards that licensees must observe and a reference point for discipline.

In relation to this complaint the following rules may apply:

Rule 6 Standards of professional conduct

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

4. Discussion

4.1 Issue 1: Licensee One attended an auction being run by the Complainant and was seen approaching other persons at the auction. She did not work for the Complainant’s company and was not known to the vendors.

4.2 The day after the auction the Complainant spoke with her vendors who were angry about the conduct of Licensee One as they felt she was “working their buyers” at the expense of their advertising.

4.3 That evening the Complainant phoned Licensee One and left a message to call her. Licensee One has stated that during the subsequent telephone conversation with the Complainant, she told the Complainant:

a) The pen and paper were to write down the bidding, and the only persons she approached were her neighbours who she knew. The Committee noted however that this statement is inconsistent with a claim from the Complainant that both her husband and the previous owner, Mr. W, were approached. The Complainant has provided the Committee with a copy of a letter from Mr. W which confirms that a lady approached him during the auction and was telling him how well she had done in the area, she had 6 or 7 properties coming up for sale and she lived in the area. In clarification of her statement Licensee One explains that out of courtesy she had a conversation with the people next to her, who she found out later were the husband of the Complainant and his friend the previous owner.

b) She apologised to the Complainant, assured her that her actions were in no way malicious, it was a regrettable and steep learning curve for her and that she would take on board what she had been told.

4.4 In her response to the complaint Licensee One has stated:

a) She is a long term resident of the area, has been an area specialist for the last seven years, has an active interest in what is happening in the area and she takes every opportunity to view as many properties as logistically possible that come to the market locally. A number of the people at the auction to whom she had spoken were her neighbours and friends. In support Licensee One has provided a letter signed by the neighbours she approached during the auction.

b) The reason she attended the auction was to increase her knowledge of the auction process and particuarly to see how it proceeded in relation to an ‘as is where is’ property. She recorded the bids as she was interested in seeing how the bidding would progress. In support the Committee have been provided with a copy of the pad where she scrawled the bids.

c) After further bidding by other parties the person standing next to her stated ‘in her opinion there would be more ‘”as is where is” properties coming to the market’, and the Licensee confirmed her statement. As a courtesy the Licensee introduced herself to the lady who had been bidding, advising her she lived and worked locally. This lady asked the Licensee to contact her if other properties became available and requested her to take her contact details. Because of the situation that has arisen the Licensee has not had any further contact with the woman.

d) She has written a letter of apology to the vendors advising that it was not her intention to interfere with their auction.

4.5 Issue 2: The Licensee’s manager did not ensure the Licensee was adequately trained.

4.6 Licensee Two in response advises that she was unaware that Licensee One had attended an auction being run by the Complainant but believes her intentions were not malicious or designed to solicit business. Licensee One has been a licensee salesperson for her company for over five years. She has had multiple successful sales and uses the sales documentation and procedures provided by the company exceptionally well.

4.7 The Committee has been provided with details of training that Licensee One has undertaken over the period 2012 -2013.

4.8 Licensee Two has advised that she phoned the woman who was said to be the person Licensee One approached at the auction. This woman acknowledges that she gave Licensee One her telephone number and that she had asked her to call if any other properties came up. The woman confirmed to Licensee Two that whilst she knew that Licensee One was a real estate agent, Licensee One did not solicit for business nor interfere with the auction process.

4.9 Whilst Licensee One may have demonstrated a degree of naivity by being friendly and talkative at the auction, Licensee Two does not believe that she disrupted or interfered with the auction process for the vendors nor solicit business.

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, whilst acknowledging the Complainant’s concerns in regard to Licensee One’s behaviour at the auction, has concluded that on the balance of probability Licensee One has demonstrated a degree of naivity and poor judgment rather than a deliberate attempt to solicit business. The Committee understands that it is a relatively common practice for real estate agents to attend auctions held by competitor real estate firms.

5.3 The Committee noted that whilst Licensee One has undertaken and had documented training which would appear to be appropriate for the role of a salesperson working in residential sales including courses focussed on selling by auction, it would recommend that Licensee One continue to undertake ongoing education programmes including developing further her knowledge of selling by auction and the protocols around attending competitor auctions.

5.4 The Committee concluded that based on information provided by the Complainant there is insufficient evidence to form a view that the supervision of Licensee One and her training is inadequate.

5.5 Accordingly having reviewed all the information and evidence supplied by all parties the

Committee has determined that, based on information available to it, the Licensees have not

acted in breach of the Act or the Rules and has therefore determined under section 80(2) 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 Licensees 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.ju st ice. go vt .n z /t rib u nals .

Signed

Patrick Waite

Deputy Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 25th June 2014