Complaint No CO3402 [2014] NZREAA 22 (16 January 2014)

Last Updated: 18 September 2014

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

And

In the Matter of Complaint No: CO3402

In the Matter of Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 16th day of January 2014

Complaints Assessment Committee: CAC20002

Chairperson: Patrick Waite

Deputy Chairperson: Deirdre McNabb

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 The Real Estate Agents Authority (the Authority) received a complaint from the Complainant in regard to the Licensee. The Licensee holds an Agent licence and worked for the Agency at the time the property transaction which is the subject of this complaint occurred. She is now self- employed.

1.2 The Complainant complained to the Authority that the Licensee did not advise him to obtain a

LIM report before purchasing a property.

1.3 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 9

September 2013 and made a decision to inquire further.

1.4 The Committee invited the Licensee to provide a response to the complaint. This was received following which interviews were held with the Vendor, the Complainant and the Licensee. The Complainant provided further comments and information on 7 October 2013 in support of his complaint.

1.5 Having satisfied itself that it had completed its inquiry into the complaint, the matter was considered by the Committee on 11 December 2013.

1.6 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 The Complainant purchased a property through Selling Agent Licensee Mr. G who at the time was employed by Agency 2. Mr. G had introduced the Purchasers to the property and had a conjunctional agreement with the Licensee.

2.2 The Complainant chose not to require a Builder’s Report and a LIM report when he signed up to buy the property and signed a sale and purchase agreement subject to finance only. The Complainant has stated that when he went to see the property the Licensee was present and she recommended they not get a LIM report and Builders Report because it was a new house. He also says that Licensee Mr. G said the same thing. This point is in dispute with the Licensee saying that she had no communication with the Complainant in this regard and that she left all communications with the purchasers to Mr. G.

2.3 Following the purchase of the property the Complainant discovered that the property had not been issued with a Code of Compliance.

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

Rule 5 Standards of professional competence

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

Rule 6 Standards of professional conduct

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

6.4 A Licensee must not mislead a customer or client, nor provide false information, nor withhold information that should by law or in fairness be provided to a customer or client.

4. Discussion

4.1 Issue one: The Licensee should have found out about the house before she listed the property.

She should have also strongly recommended obtaining a LIM report.

4.2 The Vendor of the property, who lives in Australia, has advised that he hired a Builder to oversee the building of the house in 2007 including obtaining the required building consents. He was not aware that the building did not have a code of compliance as he had left that to the Builder to complete.

4.3 The Licensee listed the property for sale in August 2012 and had the listing agreement completed in person with the Vendor while she was in Australia where she also works part time as a real estate agent.

4.4 The Selling Agent was Mr. G from the Agency 2 who introduced the Purchasers to the property and did a conjunctional agreement with her.

4.5 The Licensee says that she met the Selling Agent and his Purchasers at the property once and she had provided Mr. G with a blank form of their sale and purchase agreement to complete.

She says that she had nothing to do with the offer being written up and she received this from Mr. G and presented it to the Vendor while the Licensee was in Australia again. The final initials were completed via email.

4.6 The Committee noted that there were no disclosures made in the Listing Agreement by the

Vendor in relation to resource consent or code of compliance.

4.7 The Vendor has stated in an interview with the Authority’s investigator on 1 October 2013 that he was not aware that the property did not have a code of compliance or that the resource consent wasn’t signed off as he had left that to his Builder to handle on his behalf.

4.8 The Complainant in an interview on 3 October 2013 acknowledges that that he didn’t require a Builders Report nor did he request a LIM report as he felt that it was easier to make an offer unconditional except for finance.

4.9 The reason for the Vendor not receiving a resource consent or code of compliance seems to have been because of an outstanding fee of $6,700 to the former Manukau City Council. In addition the Complainant discovered that the builder had not paid the bathroom people so he apparently had not obtained the appropriate contractor certificates. All council documents in relation to the code of compliance are in the Owner ’s name and the Builder and Engineer maintain that it was the Owner ’s job to obtain these. The Council has provided a list of work that needs to be completed before a code of compliance can be issued.

5. Decision

5.1 After conducting an inquiry into the complaints, pursuant to section 89(1) of the Real Estate Agents Act 2008 (the Act), the Committee held a hearing with regard to that complaints. 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 Whilst the Complainant maintains that the Licensee should have strongly recommended that he obtain a LIM report which would have disclosed the lack of a code of compliance for the property, the fact remains that it was he who chose not to require a Builders Report and a LIM report. It is not surprising that he appeared to assume that a relatively new house would have a code of compliance. In addition the Vendor did not disclose in the listing agreement that there were any defects or issues in relation to compliance and there was nothing it seems that alerted the Licensee and the Complainant to the deficiencies.

5.3 There is a dispute in relation to whether the Licensee at the time of the Complainant’s first visit to the property recommended that they not get a LIM and builder’s report because it was a new house. The Licensee denies this and said that she had no communication with the Complainant in this regard and that she left all communication with the Selling Agent Mr G. In the absence of any witnesses to what was said or not by the Licensee the Committee is not in a position to form a judgement on this point either way.

5.4 Accordingly the Committee has concluded that from the information provided it could not identify any grounds on which the Licensee’s conduct in relation to the complaint could be considered unsatisfactory or be judged as misconduct as these terms are defined in section 72 and section 73 of the Act. It 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.

6.1.1 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.

6.2 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.

6.3 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 w w w. just ice. g ov t. nz /t ribuna ls .

Signed

Patrick Waite

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 16th January 2014