Complaint No CO4791 [2014] NZREAA 229 (4 August 2014)

Last Updated: 4 March 2015

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

And

In the Matter of Complaint No: CO4791

In the Matter of The Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 4th day of August 2014

Complaints Assessment Committee: CAC301

Chairperson: Deirdre McNabb 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 24 February 2014 from the Complainants in regard to the Licensee. The Licensee holds an agent licence and works for the Agency.

1.2 The complaint relates to an undertaking that the Complainants believed they had received from the Licensee that he would ensure that the outstanding rent that was owed by the Tenant under its lease of the Complainants’ building would be paid.

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 on

17 April 2014 and made a decision to enquire further.

1.4 The Committee invited the Licensee to provide a response to the complaint. This was received on 25 April 2014 and was followed up by an interview by telephone with the Licensee on 7 May

2014 by the Authority’s investigator. Complainant One on behalf of the Complainants provided further comment to their complaint and to the Licensee’s response in an email dated 21 May

2014.

1.5 Having satisfied itself that it had completed its inquiry into the complaint, the matter was considered by the Committee on 17 June 2014.

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 Complainants’ Property which had been leased by the Tenant required earthquake repairs.

The Tenant had been given notice in July 2013 and although the lease expired in September

2013 the Complainants allowed him to continue to lease the premises until he found alternative premises. It is clear however that they wanted the Tenant, who was behind in his rent and overhead payments, to move out.

2.2 In mid October 2013 the Complainants were approached by the Licensee who said that he had suitable premises for the tenant but as it would not be ready until early November 2013 he requested the Complainants to allow the tenant to remain in their building while the other property was readied for him to move his business into.

2.3 The Complainants allege that in order to persuade them to allow the tenant to stay in their building the Licensee made assurances over the phone that he would get the rent paid up to date in 3 days. It appears that there was $12,000 outstanding at that time. The Complainants allege that the Licensee personally guaranted that it would be paid.

2.4 The Complainants have since met with the Licensee and the Tenant to try to sort out the arears but according to the Complainants there is still $10,969.18 outstanding in rent although the

tenant maintains that that there is no debt and he is, in fact, in credit.

3. Relevant Provisions

3.1 The Committee examined the information supplied by the Complainants in their written complaint to determine whether S72 or S73 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 (S72) or misconduct (S73).

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

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

transaction.

Rule 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 At the core of the complaint is whether or not the Licensee guaranteed to the Complainants that the tenant’s rent would be paid in full. The Complainants have been unable to produce any evidence to corroborate their allegations.

4.2 The Licensee in his response has explained that he had offered to try to assist both parties reach an agreement on the amount owed but as this became too difficult he withdrew from the process and he certainly nevered offered to be guarantor of the outstanding rent.

4.3 The Licensee’s position is supported by the Tenant who in an interview on 8 May 2014 with the Authority’s investigator stated “The Licensee was never a guarantor for my rent. Why would he guarantee a debt when the debt wasn’t sorted and why would he do it anyway? There was a dispute over the rent and I was eventually evicted. The Licensee came in the middle of the rent dispute between myself and the Complainants and did his best to assist us to agree on the correct amount owing.” “The Licensee did absolutely nothing wrong and he certainly never guaranteed the rent. It’s ludicrous. Why would he guarantee around $10,000 it never happened.”

4.4 Aside from the credibility of the allegation the Committee considered whether the Licensee’s actions constitute Real Estate Agency work. The phrase “real estate agency work” is defined in Section 4 of the Act as “any work done or services provided, in trade, on behalf of another person for the purpose of bringing about a transaction.”

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 Having reviewed all the information and evidence supplied by all parties the Committee has determined that, based on information available to it, there is insuffiient evidence to support the allegation that the Licensee guaranted that the rent would be paid. Accordingly the Committee has concluded that the Licensee had 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 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.ju st ice. go vt .n z /t rib u nals .

Signed

Patrick Waite

Deputy Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 4 August 2014